Analysts on Wednesday predicted more gloom ahead for Nokia and the struggling phone maker was forced to deny talk it would sell its core business to Microsoft Corp.
A day after the latest in a string of profit warnings from what was once the industry No. 1, the stock fell as much as 10 percent to a 13-year low, compounding Tuesday’s 18 percent fall, before recovering sharply to close just 0.8 percent lower at 4.71 euros on talk of the buyout.
The recovery took place in heavy late trading and was sparked by a Web site report that said its software partner, Microsoft, would buy its phone business for US$19 billion.
Photo: Reuters
Nokia called the report “100 percent baseless.” CEO Stephen Elop, a former Microsoft executive, later told US financial news channel CNBC that “those rumors are baseless, there are no conversations” with Microsoft.
Microsoft declined to comment.
Nokia said on Tuesday mobile phone sales in the second quarter would be substantially below a previous forecast and abandoned its full-year outlook, blaming difficult conditions in China and Europe.
Part of the predicted decline was expected as Nokia is moving to Microsoft’s Windows software from its own Symbian platform, a plan set three months ago by Elop. However, customers are fleeing faster than expected.
In a sign of worse to come, mobile operators in Europe told Reuters that Nokia’s new Symbian phones — a stopgap until the end of the year — were of little interest.
European operators are seen as crucial to the success of devices in the region because of the subsidies they provide.
Last quarter, Nokia made 29 percent of its devices and services sales in Europe, a year-on-year decline of 5 percent.
Nokia has begun shipping its new Symbian phones, the business-focused E6 and multimedia X7, but most European operators contacted by Reuters had no plans to offer them.
“Nokia is some way behind, I’m afraid, in terms of the smartphone user experience,” a spokesman for one British operator who asked not to be named said.
Gartner analyst Carolina Milanesi said Nokia’s problem, particularly in operator-controlled Europe, was that it needed to reduce prices considerably to stay competitive.
“Operators are not going to be prepared to subsidize handsets where they don’t see demand,” Milanesi said.
A spokeswoman for Telekom Austria, which is offering the E7 in all the countries in which it operates, but not the X7, said: “In general, Nokia handsets in the ultra-low cost area are still interesting devices for our customers, but in the smartphone space we can ignore them for the moment.”
In Britain, Vodafone will offer the E6, and Hutchison Whampoa’s 3, the country’s smallest operator, will offer the X7. T-Mobile and Orange have no plans to offer either.
A spokeswoman for Deutsche Telekom in Germany said its T-Mobile unit would be launching the X7 in four weeks’ time, but not the E6.
Like T-Mobile in the UK, she welcomed the advent of Android-based smartphones from Chinese vendors such as ZTE (中興), which makes phones for operators to put their own brand on, as well as ZTE-branded phones.
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