Nokia to launch new smartphones next month

According to information obtained by Helsingin Sanomat, Nokia and Microsoft will organise a joint press conference in New York on September 5th

Stephen Elop

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The Finnish mobile telephone manufacturer Nokia and the American software company Microsoft will organise a joint press conference in New York on September 5th.
      According to information obtained by Helsingin Sanomat, the conference will concentrate on the launch of Microsoft’s renewed Windows Phone operating system and some new Nokia smartphones that utilise it.
      The name of the operating system is Windows Phone 8. Nokia’s directors have given assurances on several occasions in different contexts that Windows Phone 8 will spell a significant reform compared with the operating system currently in use.
     
According to the British news agency Reuters, Nokia CEO Stephen Elop said in Oslo on Wednesday that phones based on the new operating system would be launched soon.
      On Wednesday the company’s share price went up on the New York Stock Exchange by six per cent, reaching 2.60 dollars or 2.20 euros.
      The timing of the announcement can be considered crucial from the point of view that according to advance information, Nokia’s rival Apple should make an announcement regarding its latest version of the iPhone in mid-September.
      The technology research company Gartner estimated on Tuesday that consumers have postponed the upgrading of their handsets this summer while waiting for the launch of the new models.
     
The new operating system is significant for Nokia because the demand for its Lumia smartphones currently on the market has been a disappointment.
      Sales since the launch in November 2011 have been around 7 million units.
      This has been one of the reasons why the company’s stock price has fallen a dinning 45 per cent from the figure at the beginning of the year.
      That said, in recent times Nokia’s share price has gone through some major fluctuations.
      In the last month, the price per share has gone up by more than 30 per cent, whereas in a three-month period it has cheapened by nearly 12%.
      Strong share price fluctuations are typical for companies in crisis, the future of which is all but clear to the investors.
     
The new Windows phones will hardly be likely to have a dramatic impact on Nokia’s result in the current quarter. The account books for Q3 will be closed at the end of September.
      Instead, they may beef up Nokia’s pre-Christmas sales. This is traditionally when the demand for mobile phones is at its highest.
      At the end of July, Nokia estimated in its Q2 interim report that in July-September the mobile handset unit’s losses may be higher than in the preceding quarter.
      This signals that Nokia has not set high hopes on the new Windows phones’ chances of turning around the result at least during the ongoing quarter.
      However, in Nokia’s profitability prediction the range given is exceptionally large: four percentage points.
      In the second quarter, Nokia’s mobile phone unit’s operating loss without non-recurring items was EUR 365 million.
      At the beginning of August the investment bank Goldman Sachs estimated that Nokia’s business activities would not turn profitable before 2014.
     
On Wednesday, the credit assessment company Standard & Poor’s downgraded Nokia’s credit rating by one notch.
      In the company’s view, Nokia’s long-term liquidity has been compromised owing to the weaker than expected business development.
      According to Nokia Executive Vice President and CFO Timo Ihamuotila the weakening of the credit rating will have limited effects.
      “As we continue our transition, we are applying a strong focus on cash conservation while simultaneously reducing our operating costs and making our operating model stronger and more agile”, Ihamuotila says in a Nokia press release.


Previously in HS International Edition:
  Nokia eliminating up to 10,000 jobs in cost-cutting move (14.6.2012)
  Nokia selling Qt business (10.8.2012)
  For Oulu, Nokia´s years of growth are over (8.8.2012)

See also:
  Buyout rumour leads to surge in Nokia stock price (2.8.2012)

Links:
  Nokia press release

Helsingin Sanomat