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Nokia reported results today that sent its shares sliding, as a hefty charge at infrastructure joint venture Nokia Siemens pushed the Finnish giant into a loss of €0.15 per share. Nokia suffered a writedown of €908m on NSN, which had a poorer than expected Q3.

Other negative factors were hints of component shortages in the current Q4, and a slip in market share at the high end (unsurprising, given that Nokia has only recently refreshed its smartphone range with the N97 and N900). In general, though, the phones business contained many positive signs for the future and analyst consensus was that Nokia had managed the recession better than expected, leveraging its scale and efficiencies to keep market share strong and control costs effectively. Nokia also improved its forecast for the total handset market, which it now expects to decline by 7% in the year, rather than 10%. It expects to increase its market share in all phone categories in Q4.

The shock loss of €559m ($836m) also reflected the pressure on average selling prices and the contraction of the overall handset market this year. A year ago, just pre-crash, Nokia made a profit of €1.09bn.

Nokia now expects total wireless industry revenue to drop 5% instead of 10% this year, but it expects worse market share in equipment for NSN. "We continue to support Nokia Siemens Networks actions to improve its performance," said CEO Olli-Pekka Kallasvuo. The firm also wrote down the value from its acquisition of Navteq.

Sales fell 20% to €9.81bn, worse than analyst consensus forecasts of €9.94bn. Phone volumes fell 8%, average selling prices stayed at €62 for the second consecutive quarter and market share also was steady at 38%. Nokia's adjusted operating margin on devices, at 11.4%, was stronger than the 10.8% predicted by analysts though worse than the 18.4% recorded a year earlier.

Kallasvuo said in a statement that device volumes would have been better were it not for component shortages, but expressed disappointment in smartphones, where volumes fell from 16.9m units in Q2 to 16.4m units as the market waited for new Nokia models. Most of the blame rested with erosion of the legacy N Series and E Series portfolios. Nokia is now betting on new device formats like the newly released Booklet 3G netbook, as well as web services.

But Nokia, despite its grand plans in new businesses, remains, for now, dependent on its core business in handsets, and on shipping vast volumes of units in every target market and price range. Its failure to make such a splash in high end smartphones as elsewhere has hit its margins and average selling prices during the downturn, since outside the top end, price wars have been intense.

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