Standard & Poor's Ratings Services has cut its rating on Nokia to the lowest rung of investment-grade territory, states a Dow Jones report.
While S&P says that Nokia's Lumia Windows Phone is revitalising the company's competitiveness, defending its share of the smartphone market will be challenging and it is unsure if Nokia can counterbalance falling revenues from plunging Symbian handset sales.
S&P believes Nokia's close relationship with Microsoft could strengthen the handset vendor's competitive position, but the prospects of Nokia's Symbian OS combating the appeal of Apple's iOS and Google's Android look grim.
"As a result, we believe Nokia's market share could slide further from the 12.6 per cent share it held in the fourth quarter following a decline from 28.1 per cent in the fourth quarter of 2010," the ratings agency told AFP.
S&P now rates Nokia at triple-B-minus, leaving it a notch above junk grade.
In response, Nokia stressed that the ratings agency had highlighted its conservative financial policy, strong balance sheet and very robust liquidity position," and insisted: "S&P's rating action will not have a material impact on our current financing costs," said the handset vendor.
This lowering by S&P seemed to leave investors unconcerned, with the shares moving up slightly by 0.36 per cent on the Helsinki stock exchange--on a market down 0.05 per cent.
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