Nokia's share price had plummeted by 18 per cent at the close of US trading on Tuesday after the company cancelled its financial forecasts for the rest of 2011.
The troubled handset maker announced that sales will fall substantially below the predicted €6.1bn to €6.6bn owing to increased competition and lower profits on devices.
The share price continued to tumble on Wednesday morning, as investor panic appeared to have set in. Nokia's share price has dropped over 70 per cent since mid-2006.
Nokia has struggled to make the transition from the feature phone to smartphone market and the situation is not going to improve any time soon, according to Francisco Jeronimo, research manager for European mobile devices at IDC.
"There are widespread concerns about the performance of Nokia, and competition from Apple, HTC and Samsung is very high," he told V3.co.uk.
"Samsung has overtaken Nokia as the market leader in western Europe, and this is because the Korean firm is able to understand market trends and implement them faster."
Jeronimo argued that choosing Android as an operating platform would not have prevented Nokia's slump.
"Picking Android would have boosted sales in the short term as users are flocking to the Google operating system at the moment," he said.
"However, choosing Microsoft's Windows Phone 7 platform could work out for Nokia in the long term as we forecast this to be the second biggest platform by 2015."
Despite the projected success of the Windows Phone operating system, Jeronimo noted that it will be very difficult for Nokia to climb back to the top.
"[Nokia chief executive Stephen] Elop has the big challenge as he needs to change the internal culture at Nokia," he said.
"Although the firm has been the market leader for a number of years, it has always been shrinking. Getting back to the top is not impossible, but will be very challenging.
"One manufacturer can change the whole mobile market from year to year and, if Nokia does not work quickly, it could end up being another Sony Ericsson."
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