UPDATE 4-Infineon warns on profit as Nokia project delayed

(Adds analyst comments on iPhone, updates shares)

By Georgina Prodhan, European Technology Correspondent

FRANKFURT, May 29 (Reuters) - Chipmaker Infineon (IFXGn.DE) warned on wireless profits and sales, saying a project to supply Nokia (NOK1V.HE) had been delayed, casting further uncertainty over the handset sector and sending Infineon shares lower.

A spokesman said Infineon had also received lower orders than expected for an unnamed project to supply HSDPA chips for high-speed Internet phones, leading analysts to speculate Apple's (AAPL.O) new iPhone would launch at lower volumes.

Infineon, whose chief executive said this week he would step down early over differences on strategy, said on Thursday it now expected a bigger operating loss and flat sales at its communications unit this quarter compared with last quarter.

The world's fourth-biggest wireless chipmaker had previously forecast a narrower operating loss and higher sales at the unit, which brings in about a third of sales at Infineon's core businesses, excluding memory-chip subsidiary Qimonda QI.N.

The warning follows a cautious outlook from chipmaker Texas Instruments (TXN.N) last month, which cited caution among a broad customer base and weak demand for high-end cellphones.

It also comes a day after research firm Gartner said cellphone sales in western Europe fell sharply in January-March.

Infineon's delayed supply deal with Nokia is for single chips for ultra-low-cost phones aimed at developing markets.

Nokia said its development of these phones was on target and it would not be affected by Infineon's announcement because it had multiple suppliers for the project.

Shares in Infineon tumbled 10.1 percent to 5.62 euros by 1058 GMT, by far the leading decliner in a flat German DAX index .GDAXI.

"This was actually already foreseeable after Texas Instruments' results," said analyst Heino Ruland of FrankfurtFinanz. "Now they don't want to throw any dirt at the new CEO and so they're getting the news out beforehand."

Pohjola Bank analyst Hannu Rauhala said: "This does not increase at all confidence in cellphone market development."

IPHONE LAUNCH

Analysts speculated that the unnamed HSDPA customer that had placed lower orders was Apple, which is expected to announce its new 3G iPhone early next month, since that would have been Infineon's most significant ramp-up of HSDPA chips this quarter.