Nokia released a statement Tuesday warning net sales for its devices and services unit will be “substantially” lower than the previous estimate of €6.1 billion to €6.6 billion ($8.8 billion to $9.5 billion). The shortfall was blamed on lower average selling prices and decreased volumes of handset sales.
Nokia’s warning comes as the company increasingly finds itself losing market share to Apple’s iOS-based smartphones and models based on Google’s Android OS. Android overtook Symbian, Nokia’s OS, as the most popular smartphone platform in the fourth quarter of 2010, according to researcher Canalys.
In response, Nokia joined forces with Microsoft in February. Nokia plans to make Microsoft’s Windows Phone 7, a.k.a. Mango, its primary smartphone platform. In the meantime, smartphones running Symbian are increasingly unpopular. The close ties between the companies sparked rumors of a takeover in mid-May, but Nokia has denied such a plan is in place.