HELSINKI, FINLAND: The world's top cellphone maker Nokia reported on Thursday a sharp fall of around 90 per cent in January-March profits as the worldwide economic downturn sapped demand for new phones.

The mobile phone maker said net profit was only euro122 million ($161 million) compared to euro1.2 billion in the same period last year.

Nokia reported first-quarter earnings per share falling to 0.03 euros from 0.32 euros, missing the average forecast of 0.06 euros in a Reuters poll, but within the wide range of estimates.

The cellphone market is facing its toughest year ever in 2009, with Nokia repeating its forecast for the market volumes to fall around 10 percent.

Nokia's handset sales plunged 33 per cent in January through March to $8.17 billion.

Nokia Chief Executive Olli-Pekka Kallasvuo said inventories of unsold cellphones had decreased substantially in the quarter.

"(This) has also resulted in the demand picture becoming more predictable as we enter the second quarter," he said. To cope with slowing demand Nokia has focused on cost cuts in early 2009, slashing jobs across its operations while also halting the use of subcontractors in phone manufacturing.