Sales in Nokia's core mobile phone business dropped in the first quarter as competition intensified in the global handset market, particularly from Asian vendors.
Phone sales dipped to €5.58 billion (US$ 7.44 billion as of March 31, the last day in the quarter being reported) from €5.87 billion in the same period a year earlier
Overall net sales increased by 4 percent, however, to €9.86 billion, driven by demand for Nokia's multimedia devices, enterprise systems and networking equipment.
Net profit for the quarter declined 7 percent to €979 million, from €1.05 billion the year before, due largely to the drop in phone sales and restructuring charges of €69 million.
The Finnish manufacturer saw the average selling price for its mobile devices continue to fall, reaching €89 in the first quarter, compared to €103 in the same period a year earlier. Nokia attributed the price drop to a higher sales of less expensive entry-level devices in emerging markets, where the company has been gaining market share.
Mobile phone sales were down in all regions except for Asia-Pacific. Sales were down "significantly" in North America, Nokia said.
In its growth multimedia segment, Nokia shipped close to 8 million of its Nseries devices, including the new N95.
The company said it expects mobile device volumes to rise slightly in the second quarter.