This uncertainty has forced the company to lower its forecast from an increase of 15% in sales for the first year quarter to be flat or somewhat lower than last year.
The company had initially predicted income to be around zero due to mobile phone marketing expenditure and 3G investment costs. The company is now also suffering from the weaker economy in the US, lack of mobile phone sales and diminished investment by phone companies. A downturn in the US market reflects significantly on Ericsson, as it generates 12% of total sales within the US, its biggest market.
The rest of the market’s shares also fell as the news filtered through to the stock exchange with Alactel, Nokia and Siemens all falling in value.
