By Anhar Khanbhai

Nokia’s troubles continue as the Finnish company struggles to keep up with Apple and Android in the smartphone race.

The company has announced its first-quarter results for its mobile phone and smart device unit will fall short of expectations, largely due to the weakness in emerging markets.

In a statement, Nokia said the Lumia launch has had a positive start, but it wasn't enough to save the quarter due to "competitive industry dynamics" in emerging markets, such as India, China, Africa and the Middle East.

The company launched the Lumia on Easter Sunday – where most stores were closed. After the launch, it was discovered that a software issue is plaguing a number of new Lumia 900 smartphones, rendering them incapable of connecting to the internet.

However, CEO Stepehen Elop said 2 million Lumia devices had been sold but still wasn’t enough to bolster the profit outlook.

“Our disappointing devices and services first-quarter 2012 financial results and outlook for the second-quarter 2012 illustrates that our business continues to be in the midst of transition,” Elop said.

“Within our smart devices business unit, we have established early momentum with Lumia, and we are increasing our investments in Lumia to achieve market success.”

The Nokia profit warning comes just as investors were becoming upbeat about the Lumia launch, consequently, Nokia’s shares were hammered in premarket trading, falling 17%.

The fallen mobile phone giant said operating margins in the first quarter were "approximately negative 3%", far worse than previous guidance of "around break-even", and it expects a similar slide in the next quarter.