Nokia makes investors nervous

(Telephony) Nokia saw its shares fall today by as much as 9% following the company's announcement of slower-than-expected handset sales.

Nokia, the world's largest handset maker, had consistently reported stellar growth figures while rivals Motorola and Ericsson have struggled. Nokia said it sold more than 128 million handsets during the quarter, up 64% from last year, but analysts had expected sales closer to 140 million.

"The rumor is that Europe is saturated," said Paul Dittner, handset analyst with Dataquest. "The real slowdown is the replacement market … Some people are waiting for some of the new data phones to hit the market and for data to be useful."

Nokia also indicated that early estimates put year-end 2000 handset sales from all handset manufacturers globally at 405 million. Industry analysts had expected around 420 million.

"It's within 5% of what we expected it to be," said Dittner. "We'll have to wait and see, and we won't know where the market is really headed until a few weeks."

Motorola will announce its fourth-quarter results by the close of the market on Wednesday. Analysts are braced for the worst as Motorola consistently provides lower guidance.