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.

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...

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?

Ha ha ha.... maybe you are reading the wrong books 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

@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.

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

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.

Has he ever commented on Maemo and/or MeeGo?

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.

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.