Nokia has cut its forecast for the second time in three weeks.
The handset leader says it can't confirm its guidance for the fourth quarter and predicts a decline in market volumes of at least 5% in 2009.
"The mobile device market slowdown has continued more rapidly than previously expected," it said in a statement.
It added that the impact of the economic slump had been "more pronounced" in emerging markets such as India and China.
Nokia predicted that the network business would also contract by at least 5% in 2009, although it expected Nokia Siemens Networks to hold market share.
On the upside, the company said handset market share would increase, and expects margins in its devices division "in the teens".
CFO Rick Simonson said Nokia would cut the cost of goods sold, as well as opex and capex. "We expect these strong actions to offset, in part, the negative impact of slowing sales," he said.
Some analysts said Nokia should have gone further. 'We're surprised they didn't cut (its forecast) more for 2009,' Charter Equity Research analyst Ed Snyder told Reuters. 'I don't think we'll see February 1 without another cut.'
Separately, Gartner said the smartphone market grew by just 11.5% in Q3 - the slowest since it began tracking the industry. 36.5 million units shipped during the quarter.
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