Sector Snap: Cell phone chip stocks decline

Nokia cited the economic slowdown and volatility in currency exchange rates, saying it now expects industry mobile device volumes of about 330 million in the period, making a total of 1.24 billion for the year. Previously, it had predicted 1.26 billion units for the year.

And looking ahead, Nokia gave a preliminary prediction that industry mobile device volumes will fall compared with 2008 volumes due to the economy.

Nokia's revised industry outlook could spell trouble for the companies that make the chips that go into cell phones, as lower demand for cell phones would mean decreased demand for the chips that go inside them.

Shares of Qualcomm Inc. fell 82 cents, or 2.4 percent, to $34, while shares of Texas Instruments Inc. fell 55 cents, or 3.2 percent, to $16.84.

Meanwhile, shares of RF Micro Devices Inc. fell 14 cents, or 9 percent, to $1.42.

Nokia's predictions come on the heels of numerous announcements of lowered outlooks and job cuts across the tech industry, as companies indicate they are not immune to the economic crisis.

Oppenheimer analyst Ittai Kidron wrote in a note he is reducing estimates for Qualcomm, RF Micro and other suppliers based on Nokia's "dispiriting" warning.

"We expect lower industry volume to impact the entire supply chain and that it could pressure pricing and margins," Kidron wrote.

Nokia's American Depositary Shares fell $1.22, or 8.6 percent, to $12.93.