Nokia's new Lumia Windows Phone 8 smartphones failed to be the game-changer the financial industry was hoping for, with brokers at Deutsche Bank and Societe Generale downgrading the shares from hold to sell.
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"Nokia's new Windows 8 devices will unlikely alter its muted smartphone market share trajectory in an ever more competitive smartphone market," Deutsche Bank analysts said.
The German bank now expects Nokia shares to fall after the company had seen the price of its stock jump 50 per cent since a low point in July. The bank has cuts its target price on Nokia stock to €1.60 from €1.70, alongside its rating downgrade.
Kai Korschelt, an analyst with the bank, issued a research note, stating: "We believe Nokia will struggle to regain sufficient market share with Windows 8 devices to offset increasing pressure on its mobile phone business from low-cost Android devices in 2013," according to Reuters.
Analysts and investors expressed disappointment that Nokia did not reveal pricing or release date information for the Lumia 920 and 820. Rumours suggest that the devices will go on sale in November in Europe and the United States. Nokia's shares fell 13 per cent last Wednesday after the new devices were announced before regaining some ground later in the week.
The French-based bank Societe Generale also registered its lack of enthusiasm for the two new Lumia handsets, with brokers claiming that many specification details had been leaked and there was little new information to excite investors.
In an effort to counteract comments that Nokia had missed a chance to revive its flagging fortunes, the company's senior vice president of smart devices, Jo Harlow, said that this launch of the 920 and 820 was a step in a journey.
"This characterisation that it is the last step is not reality," Harlow told the Daily Telegraph.. "These are two devices; they're not all the devices that we'll base on Windows Phone 8. This is our strategy and it's a journey; there's not one moment in time that defines everything."
Harlow stressed that Nokia was able to enhance the overall Windows Phone platform and still provide differentiated products, citing NFC and improved mapping as benefits of working with Microsoft.
"It's always a decision should this be in the platform or should it be unique to us," she said. "It's always in our interest to grow the platform, and if we have tonnes of differentiations it makes us slower when Microsoft gives us the software to implement."
Sentiment towards Nokia was also damaged by news that the company was cutting the price of its mid-range Lumia 800 Windows Phone by around 15 per cent, as well as making smaller reductions on other Windows-based handsets. The company defended its actions, claiming that such steps were a normal part of its business.
Research firm CCS Insight, which tracks market prices, confirmed the price cuts and said they were necessary to keep momentum behind current Lumia 800 and 900 devices. Thiis especially true now that new handsets have been announced using the latest Windows Phone 8 software, since the older Lumia models will not be fully upgraded to Windows Phone 8 because of hardware limitations.
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