Nokia debt rating downgraded, future not looking so hot
 

http://www.intomobile.com/2010/11/18...ooking-so-hot/

Nokia's debt rating has been downgraded by Fitch. Never heard of Fitch before so not sure how adverse this is to Nokia's general standing. The ratings agencies I am familiar with and I believe the most significant are Moody's and Standard and Poors.

However, it does show that things at Nokia are not all nice are rosey despite the huge sales but I think we guessed that from the management changes.

The linked article seems unduely negative though. I think Nokia will be fine even if its Nokia device is a commercial failure. Just that it would probably never be the big dog again in the high end sector which is where the big profit is.

Re: Nokia debt rating downgraded, future not looking so hot
 

so some unknown rating agency has downgraded nokias credit rating.

where's the catch?

and things definetly aren't rosy with nokia, one could easily see it from financial figures also.... so still:

where's the catch?

Re: Nokia debt rating downgraded, future not looking so hot
 

Nothing really serious here. This rating agencies where the same who didn't see the crisis come. Well done!

Re: Nokia debt rating downgraded, future not looking so hot
 

Maybe this article got them thinking:
http://online.wsj.com/article/SB1000...ch_LEFTTopNews
Har har

Re: Nokia debt rating downgraded, future not looking so hot
 

Who knows what the real sitsuation after all is. In near future we all will be much wiser. For example:
http://www.unwiredview.com/2010/11/0...panys-history/

I will just wait and see what kind of selling they get from N8 (probably q4 results in january). After that I might have to buy some tar and feater and start finding some bloggers.

I´m thinking that it would be good to have some kind of rating table for news/blog websites where people could vote and collect the most biggest failures in analyzing markets. Some kind of modern pillory.

And Bundyo, once again brilliant article/blog. Meego Nokia alone. Hmmm...someone has missed shait load of information or didn't do homework.

Re: Nokia debt rating downgraded, future not looking so hot
 

Usually Nokia make great hardware (my parter's xpress 5800 seems to be indestructible).

My N900 feels very solid and has been dropped or knocked a few times and seems compeletely undamaged - even the usb port is still solid (we won't mention other n900s with detachable usb ports).

Unfortunately Nokia's software strategy is a shambles.

Maemo is now a stable platform and was ripe for further development but unfortunately was not "cool enough" so Nokia decided to discontinue it and started Meego instead.

The n900 was the perfect starting point to start a new line of smartphones and let's face it people have done some very clever things with it.

Nokia could have easily released a new model this year - e.g. a multi-touch keyboardless model.

The n900 and maemo platform could have been a very slick line of devices and Nokia would have the ability to challange Apple, Google and Microsoft.

If Nokia did things properly more Developers would have stood by maemo and a larger mainstream app catalogue for everyone to play with - if Nokia took maemo mainstream - but they did'nt.

Nobody is going to wait too long for Meego - the market is passing Nokia by. Meego is Nokia's last chance to put things right and even then maybe too late.

As it stands Nokia will soon become just another budget handset maker.

Meego has the potential to offer something really special in the smartphone market - real innovation - e.g. proper multitasking and an open platform where anyone can write their own apps.

Re: Nokia debt rating downgraded, future not looking so hot
 

Fitch is not an unknown rating agency. It is one of the big 3, along with Moody's and S&P. Typically when one downgrades, the other two start looking more closely at the company as well and in many cases end up downgrading the credit rating. So it is a reasonably big deal for Nokia as it just means that their costs have just increased, which is especially going to hurt given the low margin business model Nokia seems to be running. Makes it even more important for them to get their top end phone strategy right.

Re: Nokia debt rating downgraded, future not looking so hot
 

Did any ratings agency see the financial crisis coming (ie downgraded company and financial institutions well before the crisis hit?)

Someone should start a ratings agency rating agency.

Re: Nokia debt rating downgraded, future not looking so hot
 

Quite a lot of sense in your post. But as a decade long Nokia fan I hope you are wrong, though current signs point much more towards you being right than wrong.

Re: Nokia debt rating downgraded, future not looking so hot
 

Probably not but that does not automatically mean they all fail for doing so. They may not score 10 out of 10 for predicting the future but if you are downgraded then there must be a good present reason for it. Of course Meego could become as huge as Android and Nokia's rating goes up to A+ and I am sure we all hope that but fact is current and past trends do not point in that direction.

Re: Nokia debt rating downgraded, future not looking so hot
 

Meego != Nokia

Re: Nokia debt rating downgraded, future not looking so hot
 

I really hope I'm wrong too!

I was a SE fan for many years - the phone and software did exactly what I wanted.

My partner bought the Nokia Xpress 5800 and when I saw it I thought it was pretty good. Then my daughter got a Nokia 5300(?) because her LG phone kept destroying the contents of her SD card.

I nearly bought an Android phone last year and even considered the iPhone (what the f*** was I thinking?!).

Then I heard about the n900 and eventually got one and enjoy every minute of it.

It really showed what a company and open source software could do and I assumed this was a hint of Nokia's future and became a fan.

As I've said in previous posts this year I was hoping a european company like Nokia would be serious competition to the likes of Microsoft and Apple and I would have been kind of proud about that.

I think Meego's hope is to be something different from the current trend of dumbing down the smartphone experience.

This is probably Nokia's best strategy - offer something different from everyone else and become a differentier in the market rather than a "me too" manufacturer.

Re: Nokia debt rating downgraded, future not looking so hot
 

Effectively it is for the moment.

Nokia and volunteers are working together to port Meego to the n900 as a "reference" design and ARM-based devices.

Nokia's n900 "successor" will be running Meego in some form.

Apart from Intel only Nokia are working on a handset version of Meego. Nokia have actual handsets in the market Intel do not.

Meego on touch devices are based on Intel x86 version of Meego.

Re: Nokia debt rating downgraded, future not looking so hot
 

Their sole reason for existing is to research these risks. So a big fail to them all.

Some possible reasons:

• Nokia didn't pay them this year's subscription fee for the "A-" rating.
• Some people in Fitch have huge short positions on Nokia
• MS "commissioned" Fitch to update Nokia's rating

Re: Nokia debt rating downgraded, future not looking so hot
 

Fitch ain't a nobody, and people in the know should be worried.

The banking world is all about speculation, belief in and the image of something. If belief fails then people go elsewhere and if the image Nokia is putting out is one of a failing company, then people look elsewhere. We are not talking customers, we are talking the banking world, investors and share holders. That means problems and a black cloud forms. Companies can't continue on in that state and this should start people on the Nokia board to worry. If the other biggies take note and adjust, then you have serious issues.

Though reading this board you can see people immediatly thinking of conspiracy theories, rather than the 'fat, bloated, badly run, crap phone producer struggling after 3 years of bad phones on a global market it can't seem to understand, finally reaching the stuggling point. No it must be bribery by the competition, that is the real reason.

Re: Nokia debt rating downgraded, future not looking so hot
 

Not good news, but has very little practical value as long as Nokia has billions in cash and continues to make profit (I.e no serious loan needs).

Re: Nokia debt rating downgraded, future not looking so hot
 

Lol okay if that's what you want to believe.

Out of curiousity what would it take for you to be concerned about Nokia's position though?

By the way I don't think anyone (apart from a couple of pastors maybe) predicted the economic crash so rather than saying all governments and companies that failed to do so are failures maybe, just maybe, it was difficult to predict. May be that the financial institutions were doing a very good job of hiding their true position but unlike enron they did not do so in an illegal way.

Re: Nokia debt rating downgraded, future not looking so hot
 

Did we see developers flocking to Maemo (even before January)? No. IMHO, the Qt strategy is a better one than "Avkon on S60, GTK+ on Maemo".

With very few apps. Or, they could release a phone with similar hardware, but with an existing app eco-system, that paves the way to Qt (and Maemo/Meego apps).

Sales of Symbian^3 phones are *great* for users who are looking forward to Meego, it increases the target market for the platform (Qt). Application purchases/downloads on Ovi are even better.

See e.g. the wordpress app ...

You seem to have missed all the complaints about features not in PR1.2, PR1.3 etc. Or, is Maemo good enough as it is?

Developers would have been stuck porting apps from other platforms, including Nokia platforms, and most likely have become frustrated with effectively having to maintain two versions.

Developers, or users? Developers don't need to wait, they can port their Avkon apps to Qt on Symbian, and get Maemo for very little extra work, and be ready for Meego at launch.

No, those are the Android vendors, they have very little they can differentiate on, except low-margin hardware differences.

Most users aren't *that* interested in wring their own apps, so you need developers. Qt (and Nokia Qt SDK, Qt Quick etc.) lowers the barrier to entry further than GTK+/hildon would have been able to, provides a migration path from Symbian, gives developers confidence that their investment in the platform is worthwhile etc.

Re: Nokia debt rating downgraded, future not looking so hot
 

Unfortunately. Even after the recent catastrophic failure governments have still yielded to lobbyists NOT to reintroduce the complete separation of retail and "investment" (ie speculative) banking.

It should only be of concern if real investors are worried. Unfortunately in the current broken financial system most price changes are driven by speculators.

Shouldn't worry a company if they have cash and no need to borrow. Unfortunately executives may be worried about their share options and may be driven to do things to "please" the markets (financial not consumer) instead of doing things for the longterm good of the company.


Since I have no stake in Nokia I have no need for concern with regards to them. However if they don't change their obsession with product segmentation (ie the deliberate selective crippling of dozens of similar mediocre models to fit in with their idea of different user profiles) then their future will not be bright.

They were supposed to be the best of the best, that's why they command huge salaries and even huger bonuses. If they weren't able to predict the crisis then they should've repaid back their salaries and bonuses along with interest. And after the financial meltdown when they were under intense pressure to have their salaries reduced and bonuses dropped they sickeningly whined "but we are the best people for the job and if we don't get paid enough we'll go somewhere else" WTF!!??!! They're lucky to be getting a salary and not a jail sentence.

Re: Nokia debt rating downgraded, future not looking so hot
 

"would continue only using software called Qt (pronounced "cute") to create apps for its phones."

I thought it was pronounced "cutie",like Q-t

Re: Nokia debt rating downgraded, future not looking so hot
 

Downgrade is more linked to the Siemens Nokia side of things, where they are looking to bring in additional investors, as they still do not have critical mass in the global market. However they are winning a lot of LTE infra contracts of late, and these wins will show through on the bottom line in a few years. This stuff is long term business.

The handset business makes money, and has cash. Nokia have had no significant products for whole of 2010 up to now. With latest products Q4 should improve thier position which is indicated by the acceleration of downlaods on OVI. I'm starting to see people with N8s, none of whom I would call technical, and all of whom love the device.

Nokia as a whole are very protective of their dividend (yes remember those) and will divert profits to keep these up, stock price is holding.

If you like worry beads, Motorola and Sony are more interesting.

Re: Nokia debt rating downgraded, future not looking so hot
 

why havent I heard about it then? moodys and s&p have been mentioned in almost every book about financial stuff but this is the fist time I hear about fitch. And I read Economist weekly...

Re: Nokia debt rating downgraded, future not looking so hot
 

ironic. The reason why they didn't predict crisis also means rating agencies ability to predict something unexpectable is near zero. So if something unexpectable (for better or worse) happends, agencys prediction is worthless.

And life is unexp... life?

Re: Nokia debt rating downgraded, future not looking so hot
 

Ha ha ha.... maybe you are reading the wrong books :D Anyway, Fitch is pretty big and most banks use a combination of valuation models which take inputs from all the three rating agencies to work up the risk of default. I know because I do work in a Bank, though the first time I heard of Fitch was when I was doing my MBA.

Anyways, since this thread is becoming another thread disecting Nokia's problem, I will give another theory. In the 90s, mobile phone was a hardware business. Then came the internet revolution and you saw loads of new companies such as Google becoming big. Over the years Nokia had become pretty good at the hardware bit but since they never particularly needed to be any good at software, that side languished. Then another thing happened... the likes of Google, Facebook etc. started attracting the biggest brains in the business. Compared to working in California or in your own home country, which a geographically spread cosmopolitan company like Google offered, it became increasingly hard for Nokia to get great (and I mean great, not good) developers to relocate to Espoo in a cold country where no one spoke their language. Now Finland maybe great but it certainly can't claim to attract the best and the brightest by any stretch of imagination. Thus Nokia of today is suffering from lack of the kind of top talent that is driving the likes of Google, Apple etc. and thus it may never be able to catchup with them unless it opens many more deveopment centres all over the world such as US, UK, China, India etc. and changes its Finland centric approach

Re: Nokia debt rating downgraded, future not looking so hot
 

@Arbitrabbit good point. I think it is almost universally agreed Nokia's problem has been on the software and services side. I knew that most of the best apps originate in the US but never considered that even for non-US developer moving to US to further career is a much more attractive option than moving to Finland and that Nokia may not have development offices in other countries.

Re: Nokia debt rating downgraded, future not looking so hot
 

Yup, I site the example of my favourite Finnish developer who also eventually moved to US. His name is Linus Torvalds :D

Re: Nokia debt rating downgraded, future not looking so hot
 

ironically, Linus uses an andriod phone I believe..

And yes, Fitch is one of the big ones. I have NFI what books or economic literature you are reading if you dont know about it.

A "small" ratings agency will be Egan Jones... (who DID see the GFC coming, and downgraded ratings well in advance, google their reports during the GFC).

Key ppl on the ground in big ratings agencies saw it coming, but seeing it coming and actually pushing the upper management to change ratings is a different story. Anybody who has working in banking or even in a large corporation will understand how corporate inertia, vested interests and not wanting to rock the boat at work.

That being said, ratings agencies like any big corporation are a bit of a joke. Regardless, ratings have impact because these guys are still "official" and parties have to act on their ratings.

Re: Nokia debt rating downgraded, future not looking so hot
 

Has he ever commented on Maemo and/or MeeGo?

Re: Nokia debt rating downgraded, future not looking so hot
 

To quote Linus:

Coming back to the topic of Nokia's woes, I firmly believe that Espoo does have a big part to play in it. I have a few friends who work in Nokia and they were all very excited when they joined the company. We were all recent engineering grads and some of us went to US, some UK and a few joined Nokia. Just imagine their plight after working in the company for a few years when they realised that they could't move anywhere else. I mean working in a country where almost half the valuation of the stock market is due to a single company does limit your options quite severely when it comes to changing jobs. So once couple of them got out, they never ever wanted to go back and work in Finland again.

Second credit-rating downgrade worry.
 

Adding to this thread.
http://talk.maemo.org/showthread.php?t=65876

Another credit rating agency (that only businessmen of heard of) has issued a warning against Nokia.

http://www.theregister.co.uk/2011/02...ating_warning/

I am bias but thought people might like to know.

Re: Second credit-rating downgrade worry.
 

Are these the same credit rating agencies that gave the banks AAA ratings before they went tits up? :/

Re: Second credit-rating downgrade worry.
 

As usual reading the actual Nokia statement puts things into perspective.

http://investors.nokia.com/phoenix.z...665&highlight=

"The year-on-year gross margin decline was primarily due to material cost erosion being less - driven by both shortages of certain components and the appreciation of certain currencies against the Euro - than general product price erosion, as well as a negative impact from foreign exchange hedging."

Also Net cash grew from 3Billion in 2009 to 6.9B Euros at the end of 2010, They will also return over a billion euros to share holders via the dividend payment this year.

And remember they grew unit vol as well as Average selling Price. Elop is not playing the market share game and focusing on cashflow and margins, while he regroups the product portfolio.

Credit agencies are linked to the investment banks, who want to close their short positions ahead of feb 11th ;)

Re: Nokia debt rating downgraded, future not looking so hot
 

The thread "Second credit-rating downgrade worry." (3 posts) has been merged into this thread.