Updated from 9:56 a.m. EST

Crushed by a worldwide consumer spending slowdown,


(NOK) - Get Report

missed fourth-quarter numbers and says mobile phone sales for the industry will fall 10% this year.

The Finnish phone giant posted adjusted earnings of 26 Euro cents (33 cents) a share, below the 28 Euro cents (36 cents) analysts had been looking for. Sales for the quarter ended last month were 12.7 billion Euros ($16.4 billion), down 19% from year-ago levels of 15.7 billion Euros ($20.2 billion). Analysts' estimates called for 13.1 billion Euros ($16.9 billion).

Nokia shipped 113 million phones in the fourth quarter, below the lowered target of 115 and a rare 4% sequential decline in what is typically the strongest sales period of the year.

The No. 1 mobile phone shop says it lost a percentage point of market share, which reduced its slice to 37%. The company's outlook on worldwide phone sales turned dimmer. Nokia now says 2009 mobile phone sales will drop 10% below 2008 levels. Previously, Nokia had forecast a 5% slip.

Adjusting to the weakening global economy, Nokia says it will compete aggressively in a "robust" pricing environment, and also cut its annual dividend to 52 cents from 78 cents.

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Nokia's results were even weaker than analysts had expected, though there have been ample signs that the widening recession put a freeze on consumer technology spending.

Certain clues of a coming cool-down came from



paltry sales of 19 million phones in the fourth quarter -- a quarter below already weak third-quarter levels. Adding to the gloom last week,

Sony Ericsson


to a fourth-quarter loss on a 23% drop in sales from a year ago.

Nokia was particularly weak in the popular smartphone segment, caught somewhat flat-footed as it prepares to launch its first


(AAPL) - Get Report

iPhone-inspired touchscreen phone. Rival

Research In Motion


has been selling a touchscreen phone since November.

On a conference call with analysts, Nokia CEO Olli Pekka Kallasvuo noted the disappointment, but said he was "confident our smartphone portfolio is headed in the right direction."

Nokia shares were falling $1.39, or 10.1%, to $12.32 in recent trading Thursday.