The ratings on Finland-based Nokia Corp. reflect the company's leading market position in the global mobile telecommunications handset industry, its strong cash generation, and a conservative capital structure that provides considerable financial flexibility. Nokia continues to be a solid market leader based on its broad product range, economies of scale, design, product development, and operating efficiency. The ratings are constrained, however, by the slowing growth rates in the mobile handsets industry; the commoditization of the company's low-end product range; growing competition from well-funded players from the consumer electronics and PC industries; and the threat of rapid technological changes, such as the expected launch of mass-market 3G services in 2004 and the transition from voice-centric mobile hardware to data-centric mobile software.
