Nokia's bonds now downgraded to junk status
Both Moody’s and S&P now officially downgraded Nokia’s bonds to junk. Nokia keeps struggling as it loses its no. 1 position in terms of units sold to Samsung and their plan to return to the top with the Lumia range is still only a dream.
The sound of the inevitable?
Since my post in June last year Sony Ericsson and Motorola were acquired making the victims list total 14 companies, with Nokia, LG and RIM having joined the “endangered species list”. If the pattern repeats, then RIM and Nokia are in early phases of what promises to be an extended period of pain followed by an exit.
Regardless of their actual financial performance, all these companies have been, to a varying degree, struggling to keep up with the innovation pace and business performance of Apple for over three years. As of today though, I find it difficult to imagine that Nokia will get acquired anytime soon. On the other hand, I can totally see that happening to RIM. Provided that there’s someone who would actually want to buy it. Remember what eventually happened to Palm?
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Nokia is losing it - everywhere
Nokia’s brand value, which normally allows for price premiums regardless of functional value, is clearly evaporating in its last bastions.
Nokia’s financial results as well as a drop in units sold and plummeting brand value indicate that despite their notoriously repeated claims, it is no longer true that Nokia’s position in developing markets (as opposed to developed markets) is still strong. In reality, Nokia is getting weaker every day. And Lumia 900 is unlikely to change it either. Elop may need to start drafting another burning platform memo…
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