Nokia shares are down slightly today on news that ratings agency Fitch has downgraded the company's lending rating from BBB+ to BBB-.
Fitch reckons the situation is bad and getting worse for the once-mighty Finnish firm.
The rating agency also set the outlook for Nokia to negative. The rating impacts Nokia's long-term bonds - usually the cheapest way for big firms to borrow money. The rating means investors like pension funds will not be allowed to buy the debt.
Stuart Reid, Senior Director in Fitch's TMT team in London, said: "The pace of deterioration has picked-up since Nokia decided to switch to an alternative operating system and it appears consumers are deserting these legacy handsets for cheaper Android (Google's operating system) versions or high-end Android or Apple smart phones."
The agency said it was worried by the long wait for "a tested new product portfolio based on the Windows operating system... only expected to be in place well into 2012."
Fitch said it recognised Nokia's strong cash reserves but warned: "Mature companies in fast-moving sectors can feel threatened to rapidly spend accumulated cash in a number of ways when faced with step changes in market-share dynamics."
It said Nokia could only expect a rating improvement with positive market reaction to Windows-products and improvements in underlying margins which were down to 6.8 per cent in the first quarter from 8.6 per cent last year. ®