Nokia, the world's largest mobile phone maker, on Thursday said its pre-tax profit for the first quarter 2010 was nearly nine times as high as the year-earlier figure, but said it had experienced "tough competition" for its more advanced devices.

The Finnish-based company posted pre-tax earnings - excluding special items - of 488 million euros (651 million dollars), compared to 55 million euros in the same period of 2009.

Analysts had forecasted higher sales and pre-tax earnings and the share tumbled some 11 per cent after the report was published.

Fourth-quarter sales increased 3 per cent year-on-year to 9.5 billion euros but declined 21 per cent compared to the preceding quarter, the group said.

The company sold 107.8 million units during the quarter, up 16 per cent year-on-year but down 15 per cent compared to the fourth quarter of 2009.

"We continue to face tough competition with respect to the high end of our mobile device portfolio," chief executive Olli-Pekka Kallasvuo said in a comment.

Nokia estimated that it had 33 per cent of the global handset market share in the quarter, slightly up year-on-year and down compared to its 35-per-cent share in the final quarter of 2009.

In its outlook, Nokia projected that the global handset market for 2010 would rise by 10 per cent compared to 2009, and that its share of the market would remain level.

The average selling price (ASP) of Nokia's handsets in the quarter was 62 euros, down from 64 euros in the fourth quarter of 2009.

The group's network business reported a 9-per-cent drop in first- quarter net sales year-on-year to 2.7 billion euros over "challenging competitive factors and market conditions."


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