By Telecom Lead Team: Standard & Poor has cut Nokia’s NIK1V.HE credit rating
to BBB- from BBB giving the Finnish mobile device manufacturer a further shock.
The agency also said on Friday a further downgrade is
possible, which means Nokia could dip to BB+ which is considered a speculative
grade.
Nokia has been undergoing turbulence over the past several
months, due to tough competition from leading smartphone vendors like Apple and
several low-cost device makers in Asia. The company’s partnership with
Microsoft could, according to S&P, help the company maintain the
competitive lead over the medium term.
In a significant outcome of the Nokia-Microsoft partnership,
last year Nokia abandoned its own Symbian software and chose Windows Mobile as
the platform for its Lumia smartphones.
“However, we are uncertain about the extent to which
revenue growth from higher-priced Lumia smartphones can offset a potentially
rapid decline in revenues from smartphones based on the Symbian operating
system,” S&P said.
Another downgrade was possible in the next two years, the
agency said, if Nokia’s margins remain in the low-to-mid single digit range or
its net cash position decreases to 2 billion euros from 5.6 billion at the end
of 2011, Reuters reported.
Meanwhile Nokia announced it is fixing Lumia 800 battery issues.
There have been complaints about the
smartphone that runs Microsoft’s Windows Phone 7.5 Mango operating system that
its battery life falls well short of the advertised 8 hours–even when in sleep
mode. The company has released a new firmware build, 1600.2487.8107.12070/PR1.2,
to fix that and other issues, according to InformationWeek.