Nokia stock plunges over no Windows upgrade for Lumia 900

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This Feb. 8, 2012, file photo shows the Nokia offices in Salo, Finland. Shares in beleaguered telecom giant Nokia plunged to a 16-year low on Monday, June 25, 2012, after Microsoft said its Windows 8 upgrade would not work on Nokia's new flagship smartphone, the Lumia 900 model. AP PHOTO/LEHTIKUVA, JUSSI NUKARI

HELSINKI—Shares in beleaguered telecom giant Nokia plunged to a 16-year low on Monday after Microsoft said its Windows 8 upgrade would not work on Nokia’s new flagship smartphone, the Lumia 900 model.

Nokia’s share price shed 10 percent on Monday, to 1.73 euros, its lowest point since August 1996 when it hit 1.71 euros.

At the beginning of this year, a share in the company cost 4.0 euros.

Microsoft last week gave developers a sneak peek at its Windows Phone 8 software, expected to be launched later this year, but said “it will not run on existing hardware.”

“Customers will not be able to upgrade their Lumia 900s to Microsoft’s Windows 8,” Lauren Pluchino, a Nokia spokeswoman, told AFP on Monday.

Nokia launched the Lumia 900 earlier this year after undergoing a major restructuring, phasing out its Symbian line of smartphones in favor of a partnership with Microsoft.

The strategy has been part of the Finnish company’s attempts to survive on a rapidly changing landscape, with stiff competition from RiM’s Blackberry, Apple’s iPhone and handsets running Google’s Android platform.

But Nokia, which only recently lost the world No. 1 ranking it had held for 14 years, announced two weeks ago massive new spending cuts and 10,000 more layoffs would be needed, in addition to the some 12,000 layoffs already announced in the past year and a half.

Observers speculated Nokia would suffer short-term damage over the upgrade issue.

“Today’s drop in stock price is probably a consequence of several factors, but the upgrade issue is definitely one factor,” Ari Hakkarainen, an analyst at Andalys Oy, told AFP.

“The upgrade issue might have a negative impact on the company’s sales,” Rikka Tuominen, an analyst at Nordea, echoed.

They said the upgrade problem was symptomatic of Nokia’s inability to operate independently.

“People did not quite understand a year and a half ago what a partnership with Microsoft would mean. Now Microsoft calls the shots and Nokia simply follows,” Hakkarainen said.

Tuominen said Nokia was now reacting rather than acting independently, and “this recent news about upgrading problems indicates that the company’s partnership with Microsoft has its problems.”

Nokia has made no announcement about future phone launches and “expects to be selling and supporting phones on Windows Phone 7.5 for a long time,” the company said in a statement on Monday.

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  • Julius Buma-at

    If only Nokia just sticks with their Meego OS for their smartphones, I think it would have a chance to race with Android OS and IOS.

  • http://twitter.com/RyanE01 RyanE01

    Nokia should stop promoting its Lumia series with WP7.5 and instead release smartphones with Win8 immediately and get ahead of the competition. I guess Microsoft’s vast knowledge at software development and its vision on Win8 platform for all gadgets from laptops, ultrabooks, tablets to smartphones will spell the big difference in the long run.

  • Bulagas

    stupid microsoft and nokia…. if you went with android you’d probably be able to upgrade Lumia 900……………………

    stupid…. believing in elop an industrial spy saboteur

  • ice15

    There was a commentary at The Business Times yesterday titled:

    Is Nokia’s Stephen Elop Microsoft’s Trojan horse?

    The commentary mentioned that MAYBE, once Nokia’s stock prices reach their lowest price ever, Microsoft can easily buy it and have its own Phone hardware manufacturer…

    Nokia keeps on promoting its WP7 devices while Samsung and HTC did not release a new WPhone in the past 6 months… Did Samsung and HTC know something that was not informed to Nokia? Seems strange since Nokia is Microsoft’s partner…

    According to The Verge Microsoft paid Nokia $250M (per quarter) as “platform support payment” for 2011 alone. This may be the reason why Nokia chose Windows over Android.

    Was choosing Windows Phone over Android a good decision for Nokia… We still have to wait and see if Windows 8 (Phone, RT and Pro) can do whats promised…

    But just imagine, how do you think will Samsung’s Galaxy Line sell if Samsung chose Windows Phone as their Mobile OS.

    RIM should learn from Nokia’s mistake… Just imagine a Torch 9810 running on Android…

    Was Nokia just smoked by Windows Phone? :)

  • raffyb0i

    wow nokia….you got fu$ked by Microsoft…maybe its time for you to switch to android?

  • http://profile.yahoo.com/NV25ZPWMBDYFXEYR3AWQ43ZS5E Hein S

    NOKIA is TOAST

  • sean mcmahon

    Possible microsoft strategy:- destroy nokia sharepeice and then buyout for next to nothing.

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