Shares in Nokia have plunged by almost 15% as the economic downturn hit demand for handsets.
The Finnish mobile phone maker saw its profit fall two-thirds to 380 million euros in the June quarter, and admitted it would not meet its goal of increasing market share amid intense competition.
Informa analyst David McQueen says Nokia is finding it particularly hard at the top end of the market against models like Apple's iPhone and Research In Motion's BlackBerry.
Separately, Sony Ericcson posted a pre-tax loss of 282 million euros and warned the rest of the year would remain difficult.
