Microsoft fingered for Nokia's bleak future
Shares fall on ratings downgrade
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Nokia shares are down slightly today on news that ratings agency Fitch has downgraded the company's lending rating from BBB+ to BBB-.
Fitch reckons the situation is bad and getting worse for the once-mighty Finnish firm.
The rating agency also set the outlook for Nokia to negative. The rating impacts Nokia's long-term bonds - usually the cheapest way for big firms to borrow money. The rating means investors like pension funds will not be allowed to buy the debt.
Stuart Reid, Senior Director in Fitch's TMT team in London, said: "The pace of deterioration has picked-up since Nokia decided to switch to an alternative operating system and it appears consumers are deserting these legacy handsets for cheaper Android (Google's operating system) versions or high-end Android or Apple smart phones."
The agency said it was worried by the long wait for "a tested new product portfolio based on the Windows operating system... only expected to be in place well into 2012."
Fitch said it recognised Nokia's strong cash reserves but warned: "Mature companies in fast-moving sectors can feel threatened to rapidly spend accumulated cash in a number of ways when faced with step changes in market-share dynamics."
It said Nokia could only expect a rating improvement with positive market reaction to Windows-products and improvements in underlying margins which were down to 6.8 per cent in the first quarter from 8.6 per cent last year. ®
COMMENTS
Business as Usual for Microsoft then?
Embrace = Elop moves to Nokia
Extend = MS Signs deal with Nokia
Extinguish = MS grabs everything it can from the doomed ship Nokia.
Next Step?
Elop moves back to MS as Balmers replacment in 6-9 months.
Hardly surprising
What else would anyone expect?
Nokia is as good as dead. They are hinging their future on an OS that has demonstrably failed in the market place time and time again. Even if MS' OS was any good, it's still not the "right" OS - nobody is interested in it any more; the only platforms of any interest is Apple's and Google's. RIM seem to be hanging on in there, but they have a special niche in the market anyway, so they are probably the exception.
A few years ago, Jo Punter was probably not too bothered about what OS their phone was running. Now though, everyone knows about iOS and everyone knows about Android. MS and Nokia have no chance whatsoever.
MS will eventually give up and go and rape some other industry. Nokia? They may as well shut up shop now and all go home. I bet all their engineers are taking a VERY keen interest in the job market at the moment.
Microockia is doomed
All MS wants is for Nokia to go down the drain so they can get their hands on Nokia's mobile patents to use as ammo in their war against the rest of the mobile/handheld/embedded industry.
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