Financial services giant

UBS

slashed its 2009 outlook for mobile devices and now expects a decline in shipments due to macroeconomic headwinds.

Citing global weakness and current macroeconomic conditions, analysts at UBS said they now expect a 9% decline in shipments of mobile devices in 2009, compared to previous expectations of a 3% increase. It expects the current downturn to be more severe than in 2001 and 2002.

UBS said the slowdown of the device market has started "in earnest," driven by a lengthening European replacement cycle. "Our fear is that inventory build-up is likely to negatively impact

the average selling price into the latter stages of

the fourth quarter and into

the first quarter of 2009."

Accordingly, UBS said there are short-term concerns for

Nokia

(NOK) - Get Report

, the world's largest handset maker. The firm cut the price target for Nokia shares trading on Helsinki's exchange to 11 euros from 14.50 euros. UBS also removed Nokia from its global top picks list in devices due to short-term downside risks.

"Nokia has several headwinds affecting short-term performance including the yen strengthening (20% of costs), potential demand shock in some emerging markets, increased competition from multiple sources and a potential industry inventory overhang," UBS analyst Gareth Jenkins wrote.

UBS also lowered its estimates for

Research in Motion

(RIMM)

to "reflect slowing market and replacements. We do not expect RIM to be immune from the weakening economy." The firm cut its price target for RIM to $50 from $71 a share.

UBS' Analyst Maynard Um argues that while consumers are unlikely to ditch cell phone use, they may be more cautious about adding incremental monthly data fees, which could slow sales. "Early adopters of Bold and Storm should help near-term, but we remain cautious as to sustainability of momentum," Um wrote. "We expect replacement cycles to continue to lengthen."

Um also cut his fiscal 2009 revenue target to $10.74 billion from $10.78 billion and reduced his earnings estimates for the year to $3.47 from $3.49. On average, analysts expect RIM to notch a full-year profit of $3.57 a share on revenue of $11.04 billion, according to Thomson First Call.

Looking further ahead to 2010, Um cut his revenue estimate to $13.3 billion from $13.62 and earnings to $4.08 from $4.16 a share. For 2011, he expects revenue of $16.89 billion and earnings of $5.42 a share. That compares to Wall Street's expectations of a profit for RIM in 2010 of $4.70 a share on revenue of $15.63 billion, and earnings of $5.62 a share on revenue of $18.4 billion in 2011.

UBS did add that despite the weakness noted in its forecast, there are areas of strength. The firm said that subsidies carriers pay to handset makers have been reasonably stable. Additionally, smart-phone growth remains "robust" and that "long-term fundamentals of some emerging markets still show good subscriber growth."

In trading Thursday, Nokia shares were rising 3% to $13.10. Meanwhile, RIM shares were falling 5.4% to $40.88. Among other handset makers,

Motorola

(MOT)

was adding 2% to $4.03 and

Qualcomm

(QCOM) - Get Report

was up 0.7% to $32.81.