Nokia has continued the market gloom with fourth-quarter performance behind expectations, following a set of more positive results from some of the big players across the technology sector.

Net income at the mobile phone maker fell to €576m (£543.2m) from €1.84bn (£1.73bn) reported in the prior year. Revenue slid by 20 per cent to €12.7bn (£11.9bn). Analysts had expected profit to reach €975m (£920.3m) on sales of €13.1bn (£12.3bn).

The company is engaged in a cost-cutting exercise to help weather the difficult market conditions and the drop in customer demand, and to enable continued investment in products and services, according to chief executive Olli-Pekka Kallasvuo.

"In recent weeks, the macro-economic environment has deteriorated rapidly, with even weaker consumer confidence, unprecedented currency volatility and credit tightness continuing to impact the mobile communications industry," he said.

"We are taking action to reduce overall costs, but it is important for Nokia to continue investing at the proper pace in future growth.

"We believe Nokia has a tremendous opportunity to capture value as the internet services market evolves and grows. Being a catalyst for change has been our heritage and it will be our future."

The company expects industry mobile device volumes to decline 10 per cent in 2009 in comparison to 2008 levels, with the most noticeable impact in the first half of the year. Previous estimates by the Finnish company had predicted a five per cent decline.

Nokia was not the only victim of the shrinking mobile phone market, with Motorola, Sony Ericsson and LG Electronics all reporting grim sales figures.

IBM, Apple and Autonomy have all reported strong financial results this week.