Moody’s Investors Service has downgraded Nokia’s long-term credit rating by one notch to Baa3, just one level above non-investment grade, or “junk” status. The rating agency also left a negative outlook on Nokia, meaning a further downgrade could be next if sales of the company’s smartphones don’t improve.
Nokia says it sold 2 million of its new Lumia Windows-based smartphones in the first quarter. By comparison, analysts estimate that Apple sold at least 26 million iPhones during the same period. (Some estimates are as high as 44 million for the iPhone.)
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The Windows phones do have a monstrous marketing budget to support them, with Microsoft and Nokia both spending heavily to promote them. In the US, the Lumia 900 is carried by AT&T. The phone launched on Easter Sunday, and consumers who purchased the first models are now exchanging them for free replacements after Nokia said it was fixing a software bug that prevented the phones from correctly accessing AT&T’s network.