Think back to a few years ago and very few of us countenanced the idea of having a phone that wasn’t made by Nokia. However, since the dawn of the smartphone era the company’s profile and sales figures have suffered, falling behind rivals such as Apple, RIM and HTC, culminating in today’s quarterly results which show that Nokia’s profits have slumped by 40% since this time last year.

A Guardian report on the matter notes that although net sales were 1% higher at just over €10bn, the profitability of its handset and service division slipped as the company cut the prices of its higher-end phones to make them more attractive to consumers.

The average selling price of a Nokia handset dropped to €61, from €62 in the previous quarter. For smartphones, average prices fell 8% quarter-on-quarter to €143, and are down 21% over the last year.

For several years the company has been searching for its iPhone killer, with a growing suspicion out there that the failure to even come close that will see chief executive Olli-Pekka Kallasvuo removed from his position with the company badly in need of fresh blood.

Defending his position in an appearance on CNBC, Kallasvuo said the company needs to move on one way or another and that things still aren’t that bad, especially when you take into account that Nokia makes roughly four out of every 10 phones sold worldwide

Apparently, the company is only aiming to maintain its share of the mobile device market this year. “The global handset market has continued to grow at a healthy pace, led by some of the less mature markets where Nokia is strong,” he said.

The company is now pinning its fortunes on the new Nokia N8 smartphone, although its release has already been delayed until later in the year. You’d have to suspect that things will only get worse before they get better though.