Nokia production in Asia

The era of manufacturing mobile phone handsets in Europe is about come to an end, after Nokia said it would shift production to Asia. The Finnish company plans to cut 4000 jobs at its three plants in Finland, Hungary and Mexico and will stop assembling mobile phones at them by the end of the year.

Nokia is the last big phone manufacturer to move its production operations to the Far East.

Samsung, LG and Apple, whose iphones are manufactured by Foxconn in Shenzhen, China, already get their handsets from the region.

The job cuts come on top of nearly 10,000 announced last year, as the beleaguered mobile phone group battles to regain its place in an increasingly competitive marketplace. The company closed a factory in Romania last year at a cost of 2200 jobs and shed another 2300 jobs by shutting down a plant in Germany in 2008.

Nokia is struggling to compete

with Apple’s iphone, handsets running Google’s Android operating system and low-end Asian manufacturers. Its worldwide market share has fallen below 30 per cent, down from 40 per cent in 2008.

Last month, it reported smartphone sales had fallen by 21 per cent in the past three months of 2011, contributing to a post-tax loss of NZ$1.7 billion for that period.

‘‘There will be no assembling of mobile phones in our plants in Europe after this,’’ Nokia spokesman James Etheridge said.

Most of Nokia’s component suppliers are based in Asia and the company said the move would enable it to introduce innovations more rapidly and ‘‘ultimately be more competitive’’.

Gartner analyst Carolina Milanesi said that the cost savings would allow the Finnish company to improve its currently thin margins.

‘‘The reality is that keeping this kind of manufacturing in Europe is more costly. Asia is still much, much cheaper,’’ she said.

The changes will not affect Nokia’s research and design laboratories, which employ more than 3500 people.