Mobile phone giant Nokia posted positive results for the first quarter of 2008, but said that it expects continuing downward price pressure in developed markets to have a negative effect on its revenues for the coming year. The value of Nokia shares dropped up to 7.5 per cent on the news.

Though below analyst expectations, Nokia's revenues rose 28 per cent to €12.7bn euros (£10.2bn). Net income rose to €1.2bn euros (£962m) from €979m euros (£785m) in the first quarter of 2007.

Nokia shipped 115.5m devices, up 27 per cent on the first quarter of 2007 but 13 per cent down on the fourth quarter of 2007.

An average selling price of €79 euros (£63), down from €89 euros (£71) per device a year earlier was instrumental in helping the company grow its dominant market share from 36 to 39 per cent in the same period.

The company is set to close its factory in Germany by the end of June and transfer production to a new, lower cost manufacturing operation in Romania. Nokia says the closure will save €81m euros (£65m), while cutting jobs at the loss-making Nokia Siemens Networks division will save a further €100m euros (£80m).