As Apple and Google go to battle armed with iPhones and Android phones respectively, the mobile handset landscape is looking increasingly tough for traditional manufacturers.
Nokia has reported a severe drop in profits, publishing a 40% slump in the second quarter of 2010 compared with the previous year.
The firm announced profits of 227m euros (£191m) for the three months ending in June, a figure that pales in to insignificance compared to Apple's recently posted quarterly profits of $3.25bn (£2.1bn).
Nokia actually reported a 1% increase in overall revenues to 10m euros, helped by an 8% rise in the volume of mobile device sales, but profit margins have been hit as the company is forced to cut its prices to compete.
Hopes for a stronger end to 2010 for Nokia are pinned on the success of new handsets, such as the Nokia N8 due to launch this summer.
More after the break
Sony Ericsson, another heritage handset manufacturer that has had to fight the newly emerged multimedia mobile powers, posted a pre-tax profit of 31m euros for Q2 ($39.7m; £26m).
However the firm lost 283m euros this time last year and has spent the past two years cutting costs and shedding staff.