We’ve already heard predictions that Nokia bound for doom in 2013 but today there’s even worse news for the Finnish phone manufacturer, and the news comes from the top. Today Nokia has announced that its second-quarter earnings fell a whopping 66% in the face of the recession.

Despite a poorly planned N97 and the continued explosion of the iPhone user base, the loss report is still a shock. A 66% earnings loss is more than just recession-grade economics, though the global economy certainly amplified things. Nokia also reported a sales decline of some 25% and a shipment decline of 15%. The company also recanted their goal to gain market share this year.

Nokia’s CEO, Olli-Pekka Kallasvuo, said his company “put in a solid performance in what was another tough quarter.” I’m not sure how tumbling earnings look “solid,” even in a bad market. And how long can they continue to make that same, solid performance? As mentioned above, some analysts are saying Apple, of all companies, will catch Nokia as early as 2011 with a 33% market share. By 2013 these same market research types believe Nokia’s share will have dropped to half their current, from 40% to a meager 20%.

I doubt things are quite that bad, but they’re getting close. Make no mistake, Nokia is bleeding – slowly for now – and if they don’t revise their product strategy and start delivering decent phones for every market (yes that includes the US) it’s just a matter of time. Meanwhile, nothing can sate Apple’s hunger, and when the iPhone finally breaks from AT&T exclusivity, the stateside smartphone market is going to be a mess.

What could help Nokia win back some much-needed market share? Do they need a touchscreen, or just a smarter-than-iPhone smartphone with a decent app catalog? Sound off in the comments.