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.
Whenever I look at a story about Moody's, S&P and so on, there's almost always two types of comments: people who are threatened by their decisions (and discredit them) and people who feel vindicated (and think the decision is great). I don't know what to believe, but I would hope that these entities are less subordinate these days.
For me, I think the ratings agencies are useless because most of their ratings are stating the obvious after the fact. What use would a weather man be who tells you that it rained yesterday, but that the weather conditions tomorrow are still under review at the present time.
If you were a public servant in charge of investing the local government's funds, and your instructions were "invest the funds in moderately risky investments"... What does "moderately risky" mean? It's certainly not Treasury bonds. You think, say, investing in basket of stocks in the NASDAQ is moderately risky, but are you really sure that's what your superiors want, are you really that sure of your opinion to bet your job on it? Or would you invest in asset X because Moody said it was moderately risky?
Did everyone know Nokia is junk before Moody downgraded it? The after-the-fact rating at least ensures everyone who matters knows it.
FTFA: "You could argue that Moody's was one of the ratings agencies that consistently passed off sub-prime debt as investment grade material in the noughties and that it may well be wrong – indeed, Nokia's share price rose slightly on Monday. But more than a few analysts are now seriously concerned about Nokia's future, with the company losing both staff and customers, and in an alliance with Microsoft to push an unpopular mobile operating system."
Moody's along with S&P and the other ratings scam-artists are, in this case, just adding formality to what was already known - Nokia had a big red target painted on it as soon as Android gained any popularity.
What's surprising is the complete and utter inability for Nokia to respond. The death knell, at least for me, was hearing Elop set fire to the existing Symbian property and supply lines... equivalent to detonating your own ammo/fuel dump while being sieged - lots of flash and bang, but no future.
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.
I agree. From a developers perspective they are a nightmare. Log onto their portal and there's more than 8 SDKs available for download without a clear message which are for what phone market or even still sold.
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.
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].
I have a N9 at work. It is nice. But with no ecosystem it nothing more than a feature phone. And whilst it is reasonable to focus on feature phones they aren't the future. Even in third world countries. They buy a feature phone whilst dreaming of an iPhone.
I don't think the iPhone experience is right for a limited function device. For those, a display and keys may be a better solution. It's also cheaper and the battery life is much better.
I think tons of people in developing nations will want something more, like payments. I suspect many would jump at the chance to do those things on an iPhone.
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.
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...)
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.
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.
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.
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.
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.
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.
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 . 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
