The world’s largest mobile phone manufacturer reported an incredible profit loss. The company’s net income fell 90% during the first quarter of 2009 because of competition and the recession.

According to reports, Nokia’s profit plunged to $122 million euro from 1.22 billion during the same period a year ago. Analysts predicted Nokia would bring in 306 million euros. Sales fell as well to 9.27 billion down from 12.66 billion in Q1 during 2008.

Nokia executives say that the global economic crisis and tougher competition from rivals kept sales and profits down.

During recent events in Iran, Nokia Siemens Network was reported to have equipped the Iranian government with mobile phone monitoring equipment. In consequence, Nokia’s image has been seriously damaged. Perhaps this will have consequences on the profits for the next quarter.