Nokia, the world’s biggest mobile phone maker, admitted yesterday that it was being undercut by rivals trying to gain share in a weak global market, sending its shares down nearly 10 per cent.

The Finnish giant gave warning that its third-quarter market share would drop below the 40 per cent achieved in the second period – missing a target it had set itself in July.

Nokia blamed aggressive pricing by rivals, such as Samsung and Motorola, which have been trying to maintain sales in slowing economies. In an effort to maintain margins it left its prices higher at the expense of market share.

Rick Simonson, Nokia’s chief financial officer, said: “In certain markets and in certain areas, including in some of the low end, we are meeting certain aggressive pricing that we believe may not be sustainable.”

The shares fell €1.50, or 9.6 per cent, to €14.20 as a result of the unsched-uled statement, which was accompanied by a warning that the value of the handset market would be “impacted by the weaker consumer confidence in multiple markets”.

Although Nokia predicted that the number of phones sold will be up 10 per cent on last year’s 1.14 billion, pressure on the average selling price means that there will not be a similar increase in the value of the industry.

However, Nokia will begin its fightback on October 1 with the launch of its music download service, Comes With Music, and, separately, its television-capable N96 handset, which has 16 gigabytes of storage and a 2.8inch screen. Both services will debut in the UK.

Comes With Music will give customers who buy a preset phone the ability to download any of 2.1 million tracks owned by Universal, Sony and Warner Music, with EMI expected to follow soon. Nokia will introduce the service in Britain. The price has not been decided.

The company believes that consumers will pay an upfront sum for a phone that will be able to download an unlimited number of the 2.1 million songs, on a 12-month contract.

Simon Ainslie, Nokia’s UK managing director, said: “Research we have carried out suggests that consumers would be willing to pay anywhere between £100 and £300 for access to all those songs.”

Nokia’s warning comes as Samsung, the No 2 manufacturer, indicated that it lost ground in the second quarter, while third-ranked Motorola, which is trying to spin off its handset arm, is gaining share. More details are expected when Nokia reports its third-quarter results on October 16.

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