Nokia, the world's largest producer of mobile telephones, on Thursday reported a sharp fall in its third quarter profits after making price cuts in a bid to win back market share.

The Finnish group's results contrasted sharply with those of Sony Ericsson, the Japanese-Swedish joint venture, which on Thursday reported a rise in third quarter pre-tax profits of 249 per cent to €136m ($167m) on sales up 29 per cent at €1.678bn. Net income rose 45 per cent to €90m.