Nokia Says It Stands 110% Behind Windows Phone


Stephen Elop, CEO of beleaguered Finnish cell-phone maker Nokia (NYS: NOK) , emphatically stated there would be no question of having Nokia switch smartphone operating systems.

"I don't think about rewinding the clock and thinking about competing elsewhere. ... In today's war [between] Android, Apple, and Windows, we are very clear. We are fighting that with the Windows Phone," he told a group of reporters staking him out in Oslo.

Those are brave words, indeed. So far, the Microsoft (NAS: MSFT) mobile OS has not made a dent in Apple's (NAS: AAPL) and Google's (NAS: GOOG) dominance of the worldwide smartphone OS market. And, so far, Nokia's first Windows Phone models running version 7.5 of the OS have not elicited much excitement in either Europe or the United States.

But Elop's never-say-die remarks are based on the expected upcoming release of Nokia's Windows Phone 8 handset. Elop wouldn't give a specific date for any such launch, but he didn't say no to a date in September. The only thing reporters could get out of him was that the release would be "relatively near term."

Better never than late?
There has been some wondering about why Nokia did not go with the successful Android OS rather than Windows Phone OS to replace the company's homegrown but increasingly unpopular Symbian OS. Symbian has dropped from a 22% market share of all mobile phones a year ago to less than 6% in the quarter just ended, according to Gartner, a technology research firm. Total Windows Phone share was 2.7% in that quarter.

Meanwhile, Standard & Poor's has done a bit of piling on, dropping Nokia's credit rating even deeper into the nether regions of junk bond status. The latest downgrade from S&P brought Nokia to BB-, down from BB+. This was the second downgrade from S&P since April. Nokia has also taken downgrade hits from Moody's -- three since April -- and one from Fitch four months ago.

And there may be more.

"The negative outlook reflects the possibility of another downgrade if Nokia fails to stabilize its margins and significantly cut its cash losses," S&P said.

Nokia shook off the ratings agency's remark. The negative effect of S&P's action was "limited," CFO Timo Ihamuotila said. "As we continue our transition, we are applying a strong focus on cash conservation while simultaneously reducing our operating costs."

Nokia's supposed September release of its Windows Phone 8 handset may occur at the company's trade show in Helsinki on Sept. 5 and 6.

Apple, meanwhile, is expected to announce its latest iPhone on Sept. 12. As the company that basically wrote the smartphone OS rulebook, its iPhone is still the device that all other phones aspire to be like. To get the full scoop on one of the preeminent names in technology today, grab your copy of the Fool's new premium report on Apple. It comes with a full year of updates, as well as an overview of the must-know opportunities and threats for every Apple investor.

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