8 ms·

Moody's downgrades Nokia to near-junk status

58 points by chrisaycock 15y ago

DanBC 15y ago
Source article (http://www.moodys.com/research/Moodys-downgrades-Nokia-to-Baa3P-3-outlook-negative--PR_243207 http://www.moodys.com/research/Moodys-downgrades-Nokia-to-Ba...)
radicaldreamer 15y ago
I think that Microsoft will probably end up buying Nokia outright at some point if this slide continues, especially if Google gets serious about making it's own hardware via it's Motorola Mobility acquisition.
- dirkdk 15y ago
  No, my money is on Microsoft buying RIM/Blackberry. Those guys are gone in 3 months. After that acquisition Nokia will not be possible anymore because of anti-competition regulations.
  - rbanffy 15y ago
    In the end, it will come down to which patents are more useful for Microsoft to help slow Android and Linux down. The one with the nastiest stuff will win.
- rbanffy 15y ago
  I think this was the plan from the start and I said so from the moment Elop was hired. note: the downvotes are so predictable on threads like this...
  - cooldeal 15y ago
    >I think this was the plan from the start and I said so from the moment Elop was hired Who's plan? Care to elaborate?
    - rbanffy 15y ago
      Elop was hired from Microsoft where he was the head of the Office division. At Nokia he bet the company on the success of WP7, something every specialist in the market considered insane. Microsoft's money will not last long enough. To be sincere, I imagined the plan was to make WP7 a success with Nokia's help (after all, they know how to sell phones to telcos, if not to end users). Plan B was to acquire Nokia's patent portfolio. I never had much faith in plan A.
      - JonoW 15y ago
        Do you really think the Nokia board hired Elop without thinking about a partnership with MS?
        rbanffy 15y ago
        It's called a "bacon and eggs partnership". Microsoft is the chicken, Nokia is the pig.
- mason55 15y ago
  There are already rumblings of Google selling off the Mobility hardware
  - fjarlq 15y ago
    There are also rumblings that those rumblings are nothing more than rumblings... http://www.digitimes.com/news/a20120413PD205.html http://www.digitimes.com/news/a20120413PD205.html
cowkingdeluxe 15y ago
Why should any credence be given to Moody's when they were the same group of people who were rating subprime mortgages as AAA. In my mind, they lost their credibility as a ratings agency.
- rollypolly 15y ago
  You're right, it's also like kicking Nokia while it's down. It's really sad.
  - rbanffy 15y ago
    Remember Nokia did it to itself. They could fix MeeGo, they could have gone with Android and, instead, they bet their future on an OS that had shown very little hope of growth. They could also have left the smartphone market and focused on high-function S40 dumbphones and base a way up from there.
    - recoiledsnake 15y ago
      Fix MeeGo? They failed at it, that's why they had to switch. There was no way that the Symbian sales could be replaced. Android? HTCs profit's are falling at an alarming clip, Motorola was in losses and got taken over inspite of the flagship Droid, LG reported a loss of $250 million for 2011. Nokia isn't going anywhere, it was expected that the transition would be very tough, if things get really dire, expect a bailout/takeover from Microsoft.
      - rbanffy 15y ago
        > if things get really dire, expect a bailout/takeover from Microsoft. I suspect this was the plan.
      - sciurus 15y ago
        True, MeeGo failed. I assume this was due to mismanagement and political problems at Nokia and Intel, since Nokia's phone based on MeeGo/Harmattan [0] was well received [1]. [0] http://en.wikipedia.org/wiki/Nokia_N9#MeeGo http://en.wikipedia.org/wiki/Nokia_N9#MeeGo [1] http://www.engadget.com/2011/10/22/nokia-n9-review/ http://www.engadget.com/2011/10/22/nokia-n9-review/
web_chops 15y ago
I think the mobile landscape is going to look pretty barren in a few more years. Just like the desktops, we seem to near the consolidation of mobile OS market with weaker sides getting eliminated rapidly.
peterwwillis 15y ago
So should this stop someone from taking a job at Nokia?
- chrisaycock 15y ago
  A credit rating is a likelihood of default. In other words, Moody's believes that Nokia has a non-negligible chance of declaring bankruptcy. These ratings are intended for investors. Moody's isn't passing judgement on Nokia as an employer, though you may take into consideration the probability of getting laid-off in the next 12 months.
jagjit 15y ago
This downgrade is just based on Nokia's current performance which is going to continue to be bad for a couple of quarters. But their balance sheet is solid and looks like the Nokia Lumia 900 phones are getting very good reviews and selling well: http://www.amazon.com/Best-Sellers-Cell-Phones-Accessories-Service-Plans/zgbs/wireless/2407747011/ http://www.amazon.com/Best-Sellers-Cell-Phones-Accessories-S... I played with my wife's lumia 710 and it beats iphone in ease of use. If these phones sell well, which they seem to be doing, developers and apps will come too.
- gjulianm 15y ago
  Totally agree. Way too much people thinks changes happen instantly. Nokia did not adapt to the iPhone-Android boom, and it's paying it now. Any movement they do now will be reflected in performance in the next quarters, as that lack of adaptation is reflecting now in their performance. I think Nokia will improve significantly in terms of revenue. The new Lumias are pretty good and are selling really well. Also, don't forget that behind this stands Microsoft, which still has an enormous dominance in the enterprise business, and who could push Windows Phone as the perfect complement for all the enterprise software it is already selling (Office, Outlook, Exchange, Lync, Windows, Windows Server...)
- alsocasey 15y ago
  I have a 710 and for 250$ (in Canada, off contract) it's an outstanding performer.
polynomial 15y ago
1. Never fight a land war in Asia. 2. Never enter into a mobile partnership with Microsoft. http://www.asymco.com/2011/02/11/in-memoriam-microsofts-previous-strategic-mobile-partners/ http://www.asymco.com/2011/02/11/in-memoriam-microsofts-prev...
- Zhenya 15y ago
  3. Never invade Russia in the winter?
loverobots 15y ago
Moody's is a joke. When they screw up they claim "free speech" so they can away with it. How's the phone for those HN-ers that have it? That is the only thing that matters. Uncle Ballmer is loaded, he can bankroll this thing for quite a while, make no mistake about it. 1 Million phones X $100 price drop = $100 million, or almost chump change for http://finance.yahoo.com/q/ks?s=MSFT+Key+Statistics http://finance.yahoo.com/q/ks?s=MSFT+Key+Statistics . Microsoft can take a special charge of $1 billion for a year or two to bail Nokia out or to lower the price so people are enticed. Will the investors say anything when you are minting over $20 Billion a year? I doubt it. Declare Microsoft dead at your own peril. The world is moving to doing a lot of stuff in their phones and Microsoft is not about to roll over in their turf http://en.wikipedia.org/wiki/Windows_Mobile http://en.wikipedia.org/wiki/Windows_Mobile
stewie2 15y ago
RIM should be junkier

58 points by chrisaycock 15y ago

DanBC 15y ago

Source article (http://www.moodys.com/research/Moodys-downgrades-Nokia-to-Baa3P-3-outlook-negative--PR_243207 http://www.moodys.com/research/Moodys-downgrades-Nokia-to-Ba...)

radicaldreamer 15y ago

I think that Microsoft will probably end up buying Nokia outright at some point if this slide continues, especially if Google gets serious about making it's own hardware via it's Motorola Mobility acquisition.

dirkdk 15y ago
No, my money is on Microsoft buying RIM/Blackberry. Those guys are gone in 3 months. After that acquisition Nokia will not be possible anymore because of anti-competition regulations.
- rbanffy 15y ago
  In the end, it will come down to which patents are more useful for Microsoft to help slow Android and Linux down. The one with the nastiest stuff will win.
rbanffy 15y ago
I think this was the plan from the start and I said so from the moment Elop was hired. note: the downvotes are so predictable on threads like this...
- cooldeal 15y ago
  >I think this was the plan from the start and I said so from the moment Elop was hired Who's plan? Care to elaborate?
  - rbanffy 15y ago
    Elop was hired from Microsoft where he was the head of the Office division. At Nokia he bet the company on the success of WP7, something every specialist in the market considered insane. Microsoft's money will not last long enough. To be sincere, I imagined the plan was to make WP7 a success with Nokia's help (after all, they know how to sell phones to telcos, if not to end users). Plan B was to acquire Nokia's patent portfolio. I never had much faith in plan A.
    - JonoW 15y ago
      Do you really think the Nokia board hired Elop without thinking about a partnership with MS?
      - rbanffy 15y ago
        It's called a "bacon and eggs partnership". Microsoft is the chicken, Nokia is the pig.
mason55 15y ago
There are already rumblings of Google selling off the Mobility hardware
- fjarlq 15y ago
  There are also rumblings that those rumblings are nothing more than rumblings... http://www.digitimes.com/news/a20120413PD205.html http://www.digitimes.com/news/a20120413PD205.html

cowkingdeluxe 15y ago

Why should any credence be given to Moody's when they were the same group of people who were rating subprime mortgages as AAA. In my mind, they lost their credibility as a ratings agency.

rollypolly 15y ago
You're right, it's also like kicking Nokia while it's down. It's really sad.
- rbanffy 15y ago
  Remember Nokia did it to itself. They could fix MeeGo, they could have gone with Android and, instead, they bet their future on an OS that had shown very little hope of growth. They could also have left the smartphone market and focused on high-function S40 dumbphones and base a way up from there.
  - recoiledsnake 15y ago
    Fix MeeGo? They failed at it, that's why they had to switch. There was no way that the Symbian sales could be replaced. Android? HTCs profit's are falling at an alarming clip, Motorola was in losses and got taken over inspite of the flagship Droid, LG reported a loss of $250 million for 2011. Nokia isn't going anywhere, it was expected that the transition would be very tough, if things get really dire, expect a bailout/takeover from Microsoft.
    - rbanffy 15y ago
      > if things get really dire, expect a bailout/takeover from Microsoft. I suspect this was the plan.
    - sciurus 15y ago
      True, MeeGo failed. I assume this was due to mismanagement and political problems at Nokia and Intel, since Nokia's phone based on MeeGo/Harmattan [0] was well received [1]. [0] http://en.wikipedia.org/wiki/Nokia_N9#MeeGo http://en.wikipedia.org/wiki/Nokia_N9#MeeGo [1] http://www.engadget.com/2011/10/22/nokia-n9-review/ http://www.engadget.com/2011/10/22/nokia-n9-review/

web_chops 15y ago

I think the mobile landscape is going to look pretty barren in a few more years. Just like the desktops, we seem to near the consolidation of mobile OS market with weaker sides getting eliminated rapidly.

peterwwillis 15y ago

So should this stop someone from taking a job at Nokia?

chrisaycock 15y ago
A credit rating is a likelihood of default. In other words, Moody's believes that Nokia has a non-negligible chance of declaring bankruptcy. These ratings are intended for investors. Moody's isn't passing judgement on Nokia as an employer, though you may take into consideration the probability of getting laid-off in the next 12 months.

jagjit 15y ago

This downgrade is just based on Nokia's current performance which is going to continue to be bad for a couple of quarters. But their balance sheet is solid and looks like the Nokia Lumia 900 phones are getting very good reviews and selling well: http://www.amazon.com/Best-Sellers-Cell-Phones-Accessories-Service-Plans/zgbs/wireless/2407747011/ http://www.amazon.com/Best-Sellers-Cell-Phones-Accessories-S... I played with my wife's lumia 710 and it beats iphone in ease of use. If these phones sell well, which they seem to be doing, developers and apps will come too.

gjulianm 15y ago
Totally agree. Way too much people thinks changes happen instantly. Nokia did not adapt to the iPhone-Android boom, and it's paying it now. Any movement they do now will be reflected in performance in the next quarters, as that lack of adaptation is reflecting now in their performance. I think Nokia will improve significantly in terms of revenue. The new Lumias are pretty good and are selling really well. Also, don't forget that behind this stands Microsoft, which still has an enormous dominance in the enterprise business, and who could push Windows Phone as the perfect complement for all the enterprise software it is already selling (Office, Outlook, Exchange, Lync, Windows, Windows Server...)
alsocasey 15y ago
I have a 710 and for 250$ (in Canada, off contract) it's an outstanding performer.

polynomial 15y ago

1. Never fight a land war in Asia. 2. Never enter into a mobile partnership with Microsoft. http://www.asymco.com/2011/02/11/in-memoriam-microsofts-previous-strategic-mobile-partners/ http://www.asymco.com/2011/02/11/in-memoriam-microsofts-prev...

Zhenya 15y ago
3. Never invade Russia in the winter?

loverobots 15y ago

Moody's is a joke. When they screw up they claim "free speech" so they can away with it. How's the phone for those HN-ers that have it? That is the only thing that matters. Uncle Ballmer is loaded, he can bankroll this thing for quite a while, make no mistake about it. 1 Million phones X $100 price drop = $100 million, or almost chump change for http://finance.yahoo.com/q/ks?s=MSFT+Key+Statistics http://finance.yahoo.com/q/ks?s=MSFT+Key+Statistics . Microsoft can take a special charge of $1 billion for a year or two to bail Nokia out or to lower the price so people are enticed. Will the investors say anything when you are minting over $20 Billion a year? I doubt it. Declare Microsoft dead at your own peril. The world is moving to doing a lot of stuff in their phones and Microsoft is not about to roll over in their turf http://en.wikipedia.org/wiki/Windows_Mobile http://en.wikipedia.org/wiki/Windows_Mobile

stewie2 15y ago

RIM should be junkier