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Nokia suffers Asian flu in America

NEC says it and other handset makers have taken away North American market share from Nokia.

Leading handset maker Nokia has been hurt by an "Asian invasion" of North America, in which more of its customers are switching to more advanced phones from Asian manufacturers, an NEC executive said Thursday.

While admitting to slipping share in North America, Nokia on Thursday estimated it sells 31 percent of the world's cell phones, still a healthy margin over its nearest competitor.

But it is having problems in North America, where revenue handset sales was down in comparison with the previous quarter mainly because of price reductions made recently to stop sliding sales and the tumbling value of the U.S. dollar, Nokia executives said during a quarterly financial conference call. North American sales now represent 15 percent of Nokia's overall handset sales.

Adrienne Campbell, NEC manager of marketing communications, said NEC and other Asian handset makers have absorbed the North America customers that Nokia has lost in the past three months by "out-teching" Nokia with clam shell-style phones with advanced multimedia features such as polyphonic ring tones.

"The Asian invasion is what took market share away from Nokia," she said.

Aside from North America, Nokia said it's suffering "significant" losses of market share in Europe, mainly due to dramatic price cuts it initiated there.

Also Thursday, Nokia lowered its forecast for the third quarter, once again blaming price cuts on its handsets. It's now predicting a third-quarter profit of 12 cents per share and $8.2 billion in sales, both short of analyst expectations. Nokia also on Thursday reported sales for the first quarter decreased by 13 percent from a year ago.