For the second time in three weeks Nokia, the world’s largest mobile phone maker, downgraded its fourth quarter forecast, saying the effects of the global recession are more pronounced than it first thought.

The Finnish giant said it expects fourth quarter handset volumes to fall below its previous downgraded estimate of 330 million units, which will push its full-year volumes below its previous estimate of 1.24 billion units. (Nokia Lowers Horizon)

Because of the slowdown in consumer spending, the company said at an event in New York, operators and retailers will lower their inventories which will result in lower sales volumes for phone makers in the first half of 2009. (Nokia Surrenders in Japan)

The company expects mobile device volumes in 2009 to decline 5 percent or more from 2008 levels. Despite the gloomy forecast, the company expects its overall handset market share to increase in 2009.

But not everyone agrees.

“The economy is not the only negative influence Nokia is facing. There is also strong competition from formidable players such as RIM and Apple,” said Shahid Khan, a partner with IBB Consulting. “Nokia still has the advantage of a wider geography that the others. But RIM is starting to extend its market well beyond just North America and Europe.”

RIM’s recent entries, the BlackBerry Bold and the Storm, are at least as compelling as Nokia’s recent entrants, he said. The company recently announced the N97, its high-end phone (see photo).

Nokia said it will be able to adjust to the changing economics of the market because of its business model and manufacturing efficiencies.

“Nokia's highly variable, low fixed cost business model allows us to scale to a declining market,” Nokia CFO, Rick Simonson said in a statement.  “We are also acting on all fronts to reduce our costs. We expect these strong actions to offset, in part, the negative impact of slowing sales.”

The company said it plans to increase its share in adjacent markets such as software and services. The company continues to integrate applications such as navigation, email, IM, and other location based services in its devices.