HELSINKI (Reuters) - Nokia's chairman said the board fully supported management's current strategy, while small shareholders in the world's top cellphone maker criticised management at the annual meeting.
Nokia has started to build a new business by offering Internet services ranging from music downloads to e-mail, but these have gained little traction so far.
"We support management in this," Chairman Jorma Ollila told shareholders on Thursday.
Nokia has 82.7 million users for its Internet services, and aims to generate revenues of 2 billion euros ($2.68 billion) from services in 2011. Most of this will be paid by phone business, which has to pay for installing services into phones.
"It's a bit like a dog eating its own tail," said John Strand, chief executive of telecoms consultancy Strand Consult.
Chief Executive Olli-Pekka Kallasvuo, who has been with the company more than half of his life, has been under increasing criticism from analysts and shareholders as Nokia's share price has missed the market's recovery.
At the end of his speech he thanked shareholders for continuing support, and sighed deeply.
"The numbers are shocking; the sales fall, the operating profit crash. I wouldn't say operating profit was catastrophic, but the direction clearly was," shareholder Pekka Jaakkola said at the meeting.
Nokia's revenues fell 19 percent last year, while operating profit dropped 76 percent. The value of company's brand -- one of its key assets -- dropped 58 percent in just one year, according to a global study by Millward Brown.
The company will also be one of the few to miss profit growth in 2010, the year of economic recovery, and software problems continue to haunt its smartphones.
"In a few years our shares' value has dropped 60 percent, our pain threshold has been breached," said shareholder Kari Vainio.
Last month, Nokia delayed the rollout of phones using Symbian 3, its software platform revamp seen as a first step to making its smartphones competitive again, triggering a sell-off in its shares.
Kallasvuo said Nokia expected its new generation of devices to significantly close the gap with the competition in high-end smartphones.
Nokia has not been able to make a serious challenge to Apple's iPhone in the three years since it was introduced. Its last hit smartphone model, the N95, was unveiled in 2006, the year Kallasvuo, a long-time company lawyer, took over at the helm of the Finnish company.
Nokia's board chose Jorma Ollila, its long-time chief executive, to continue as its chairman.
Nokia shares closed 1.6 percent lower in Helsinki, lagging a 1 percent softer European technology shares index. In New York Nokia ADRs were 2 percent lower at 1730 GMT.
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Reporting by Tarmo Virki; Editing by Dan Lalor and Jon Loades-Carter