June 22 (Bloomberg) -- Nokia Oyj’s handset revenue estimates were cut by Nomura Holdings Inc. analysts after Microsoft Corp. said the Finnish company’s current Lumia phones won’t be supported by its upcoming mobile operating system.
Nokia’s revenue from Internet-surfing devices like the Lumia 900 will be 6 billion euros ($7.5 billion) next year, compared with an earlier estimate of 10.9 billion euros, Nomura analysts led by Stuart Jeffrey wrote in a note today. The company will sell 34 million devices running Windows Phone in 2013, 41 percent less than previously estimated, they said.
Microsoft, the largest software maker, said this week its Windows Phone 8 program will go on sale in the second half of this year and that phones running previous versions can’t be upgraded. Nokia Chief Executive Officer Stephen Elop, a former Microsoft executive, has placed Nokia’s bets on Windows Phone while abandoning its in-house Symbian operating system.
“We had hoped that Q3 would represent the low point in Nokia’s competitive cycle,” the analysts wrote. “An abandoned strategy in feature phones combined with an apparent increase in competitive pressures in Windows Phone lead us to cut revenue estimates that the recent restructuring announcement does not fully offset.”
People who own a current-generation Lumia will be able to upgrade to Windows Phone 7.8, featuring a new home screen, Doug Dawson, a Nokia spokesman, said by e-mail. Clients will also receive updates including functions like streaming of media content, the ability to connect other devices to the Internet through the handsets and new games from Zynga Inc.
Microsoft may also be developing its own Windows Phone handsets, departing from its current practice of working only with partners like Espoo, Finland-based Nokia, according to Nomura analyst Rick Sherlund. Nomura today cut its share-price estimate on Nokia to 2 euros from 3.20 euros while maintaining a neutral recommendation on the shares.
Nokia fell 1.6 percent to 1.93 euros yesterday in Helsinki, extending the stock’s drop this year to 49 percent. Finland’s stock market is closed today for a holiday.
The company cut its earnings forecast last week for the second time this year and said it will eliminate as many as 10,000 jobs and shut production and research sites as phone sales continued to slump.
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