Nokia shares recover after Microsoft sale rumours
- 1 June 2011
- From the section Business
Nokia's shares have recovered on a report that it is to sell its mobile phone business to Microsoft.
The website BGR said that a $19bn (£11.6bn) deal had been struck, although Nokia declined to comment.
Earlier, Nokia's shares had fallen 11% to a 13-year low, as analysts questioned whether a previously announced deal to use Microsoft software would revive its fortunes.
But following the report, they rose 1.3%, before closing just 0.4% lower.
On Tuesday, Nokia's shares plunged 18% after it cut its expected sales and profit margins for the current quarter.
Analysts fear Nokia's new handsets with Windows software will arrive too late for it to compete with rivals.
Nokia has been struggling in the face of fierce competition from rival smartphones, including Apple's iPhone and phones using Google's Android operating system.
Earlier this year, Nokia announced that it would be using Windows mobile software for its new smartphones, sidelining its own Symbian software platform.
On Tuesday, Nokia chief executive Stephen Elop said the company had "increased confidence" that its new Windows-based smartphones would be launched in the final three months of this year.
However, Nokia also surprised analysts on Tuesday by saying that its second quarter sales would now be "substantially below" its previous forecast, and also said it could no longer provide a full-year forecast.
This has led some investment banks to cut their forecast for Nokia's share price.
"We are concerned that the erosion that the company has suffered in Q2 is just the beginning and that there could be worse to follow," said Nomura's global technology specialist, Richard Windsor.
"Nokia's potential release of a Windows Phone in Q4 is irrelevant, in our view," he added.
JP Morgan analyst Rod Hall said: "We see the earliest possible timing for the beginnings of a turnaround as the launch of new Windows products which we expect at the end of this year.
"Even then there are no guarantees that consumers will want what Nokia is selling."