Investors starter to sell the stock after Nokia chief executive Stephen Elop unveiled the Lumia 920 and 820 phones in New York. Management’s credibility is riding on the new smartphones after it last year controversially ditched Nokia’s own software for Microsoft’s Windows platform, as reports The Telegraph.
The stock price fell 13 percent to 1.99 euros in Helsinki, the biggest one-day decline since June 14. The stock had rallied 96 percent from an 18-year low on July 18 through Aug. 27 in anticipation of the new phones.
“The challenge is that the world is working on the 4th, 5th and 6th editions of their devices, while Nokia is still trying to move from chapter 1. It still has quite a bit to catch up,” said RBC analyst Mark Sue.
“People were looking for something that would dazzle. Most investors will view it as evolutionary, not revolutionary. Nokia has made some good progress, but investors were looking for quantum leaps. We didn’t get that.”
Nokia and its partner Microsoft Corp showcased the Lumia 920 phone on Wednesday in what may be their last major shot at reclaiming market share lost to Apple Inc , Samsung Electronics Co Ltd and Google Inc, reports Gadgets NDTV.
Microsoft and Nokia hope the device sporting bright colors, a bigger screen and technology that reduces blur and shakiness in pictures and video will become a potent weapon in an escalating global war to dominate the mobile industry.
However, investors said it lacked “wow” and gave it a quick thumbs-down. Some analysts said Nokia’s reticence about dates, prices or carrier partners also did not help.
According to Reuters, the Lumia was the first in a series of planned mobile-device launches expected ahead of the holiday shopping season.
Google’s Motorola Mobility showed off three new smartphones based on Android software later on Wednesday, while Verizon Wireless the top U.S. mobile provider committed to sell all three of the Motorola phones.
“Nothing in the space is going to change dramatically overnight,” said Michael Gartenberg, an analyst at Gartner Inc. “What Microsoft and Nokia need to do is continually show evolution and innovation.”
The Lumia runs on the latest Windows Phone operating system, which Microsoft – the world’s largest software maker – hopes will rival Apple’s iOS and Google’s Android to become a third mobile platform.
“Today is a very important step, and there are more important steps ahead,” Elop said in an interview. “There’s no single turning point. We need to succeed with this and take it to the next step.”
Nokia, whose credit rating was cut to junk this year by the three biggest rating companies, has announced more than 20,000 job cuts and closed production and research sites in an attempt to put the company on profitable footing, Bloomberg writes.
The company, whose U.S. market share peaked at 32 percent in 2001, accounted for about 2 percent of smartphone purchases in the second quarter, according to Strategy Analytics. The iPhone and devices using Google’s Android software combined for about 90 percent.
Lumia’s launch came as rival Samsung denied that working conditions at eight Chinese factories run by the manufacturer and its suppliers are “inhumane”.
US campaigners China Labor Watch claimed some employees worked 100 hours overtime a month, while others had a day off only every four weeks.
However, Nokia rejected the most extreme allegations, but will “re-evaluate” its working hours. Spokesman James Chung said: “We agree with some of the criticisms raised…but we do not agree with its overall characterisation of our working conditions.”