Fitch Ratings has lowered Nokia’s credit ratings, citing that the Finish market leaders face increased competition within the smartphone market. The global rating agency said that they are concerned with the growth of the smartphone market which has now become highly competitive with the likes of Apple’s iPhone and RIM’s Blackberry. Fitch has cut Nokia’s long-term debt from A to A-, four levels above junk, or non-investment grade.
The ratings company said that Nokia signaled margins in its devices business and is unlikely to regain levels reached previously. Fitch also said that the company faces “significant challenges” at Nokia Siemens Networks, Nokia’s joint venture with Siemens AG.
Bloomberg – Nokia had its first loss in the third quarter since it adopted a quarterly reporting system in 1996, primarily on a charge related to Nokia Siemens Networks. The company lost market share in smart phones in the quarter, while Apple’s iPhone gained. Nokia’s main business of mid and low-end handsets, which accounts for 55 percent of devices revenue, is also being eroded by Chinese and emerging market rivals.