Nov. 18 (Bloomberg) -- Nokia Oyj, the world’s biggest maker of mobile phones, was downgraded one notch to “BBB+” with a negative outlook by Fitch Ratings on market-share losses and margin pressure.
“The company’s core handsets position is facing increasing competition in both the smartphone segment in mature western markets as well as lower-end markets like China and India which have traditionally been strengths,” Stuart Reid and other Fitch analysts wrote in a report. “Margins may come under further pressure as it tries to defend market position.”
Nokia’s market share has declined in the past year as it struggled to refresh its smartphone models to match offerings by Apple Inc. and manufacturers using Google Inc.’s Android. Growth in Chinese unbranded handsets helped lower the company’s overall global share to 28.2 percent in the third quarter, according to Gartner Inc.
“It will take time for management to stabilize these operating trends,” the Fitch analysts wrote, adding that Nokia’s metrics are “currently strong” for the rating. “BBB+” is the eighth highest of 10 investment-grade ratings at Fitch.
Moody’s, which has given Nokia an “A2” rating, placed the company on negative outlook on Oct. 26. Standard & Poor’s, which rates it “A,” lowered the outlook to negative on June 22.
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