Nokia's credibility has come under further attack with its credit rating being cut to two steps above junk by Moody's Investors Service, which cited "a severe weakening" of the Finnish handset vendor's market position.
Commenting on the fall in ratings, down from triple-A to Baa2, Moody's analyst Wolfgang Draack said in a statement downgrade reflects a severe weakening of Nokia's business position from one of clear leadership in the past.
"This deterioration has been caused by a loss of competitiveness of Nokia's Symbian-based smartphone portfolio and the transition of its operating systems to the Windows Phone platform, which we expect to take until the second half 2012 to fully complete," he said.
The downgrade is the second by Moody's in four months. Fitch Ratings downgraded Nokia to BBB- in June, the final investment grade before junk, and in March Standard & Poor's downgraded Nokia to an upper medium grade at A-.
In response to this downgrade, Nokia spokesman Doug Dawson told Bloomberg: "Moody's rating action will not have a material impact on our current financing costs," adding that Nokia CEO Stephen Elop has a target of increasing the company's net cash and other liquid assets by the end of the year from €3.9 billion at the end of the second quarter.
Separately, wireless technology and licensing firm InterDigitial accused Nokia, along with Huawei and ZTE, of infringing seven of its technology patents. The US-based company, which has hinted it might be for sale, has requested the US International Trade Commission stop the three companies from importing handsets, tablets and other wireless devices in the US that infringe on its patents.
InterDigital told CNET that despite "good faith" attempts to license its patents to Nokia, Huawei, and ZTE, the company has not come to an acceptable resolution. "Nokia will take whatever steps are needed to protect its rights," Nokia spokesman Tomi Kuuppelomaki told Dow Jones Newswires in response to InterDigital's complaint.
For more:
- see this Bloomberg article
- see this WSJ article (sub. req.)
- see this Reuters article
- see this CNET article
- see this Dow Jones Newswires article (sub. req.)
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