Nokia share price slumps on poor infrastructure margins

While announcing a series of new products and services at its Capital Markets jamboree, Nokia sneaked out a warning that its telecoms equipment business--Nokia Siemens Networks--would not generate a double digit operating margin until the end of 2009.

The company's shares lost four percent on this news and it underlines again the difficulties many of the long-established infrastructure developers are encountering, not helped by the entry of Asian manufacturers keen to grab market share at almost any price. Last year Nokia said that NSN would have a 10 percent plus operating margin by the first quarter of 2008, a number that will now obviously not be achieved.

Regardless of NSN's poor performance--which will rejuvenate rumours of its sale, Nokia unveiled plans to attack the heartland of the iPhone by having its own touchscreen phone ready by next year, together with a 'free' music download service in partnership with Universal Music.  

The deal with Universal will enable consumers--starting from the second half of 2008, to download music under the offer--to be called "Comes with Music," to receive free material from Universal's entire back catalogue for 12 months and to be able to keep all the music.

However, Nokia would not confirm whether a one-off fee would be payable to offset the cost of acquiring the rights to Universal's music, which will be protected by DRM software, and will not be playable on any other device.

More on this story from: The Times