The stock market is bracing itself for more bad news this afternoon when US mobile phone maker Motorola reports fourth quarter results.
Finnish handset maker Nokia yesterday sent shock waves through the technology and telecoms sector with below par sales figures, and analysts fear that Motorola will add to the gloom.
Motorola has already primed the markets for bad news by issuing a profit warning in December, saying that earnings would be 40% lower.
"People should not expect any further surprises, but it depends what Motorola says about the overall outlook for the mobile phone market," said Susan Anthony, telecoms analyst at Credit Lyonnais.
Motorola has joined the growing ranks of US technology and telecoms firms who have been hit by falling consumer confidence and saturated markets. Microsoft and Intel are among the big players who have warned that forthcoming profit figures will not be up to scratch.
Nokia's shares tumbled up to 17% after the company said that it had sold 128m handsets last year, below analysts' estimates of 140m.
The market leader's announcement came after Orange, BT Cellnet, Vodafone and One2One posted record UK Christmas sales, buoying investor sentiment in a sector which has been hit by concerns over mounting debts.
However, some industry observers were surprised by the reaction to Nokia's news, saying it should have boosted investor confidence ahead of Motorola's announcement.
Last year's sales total was a 64% increase on the year before, and Motorola's figures will be nowhere near as impressive.
Ms Anthony added: "Nokia are completely bewildered by the reaction. Nokia is a company that clearly understands this industry better than anyone else It is clear that there is still a lot of nervousness in the market."
Nokia said there were about 700m mobile phone users worldwide, and the total will top 1bn in the first half of next year.
