Jan. 24 - Finnish mobile phone maker Nokia plans to axe its annual dividend payment for the first time in over 20 years to shore up its cash position as it tries to orchestrate a turnaround. Matt Cowan reports.
Shares in the Finnish handset maker Nokia are down around 10 percent after the company announced plans to axe its dividend. The stock intially spiked after the company delivered its fourth quarter and full year results, before falling sharply. Nokia - which has paid an annual dividend for over 20 years - finished the year with 4.4 billion euros in net cash. That's down 22 percent from a year earlier, but up from the previous quarter and above analyst forecasts. It flagged a return to profitability earlier this month on stronger sales of its Lumia smartphones, selling 4.4 million in the fourth quarter. Ian Fogg is the chief mobile analyst at IHS Screen Digest SOUNDBITE: Ian Fogg, IHS Screen Digest Head of Mobile saying (English): "Nokia described those sales as strong sales but compared to the competition, those are quite weak sales for Lumia. For Lumia to be establishing itself in the market, they need to be selling many more than 4.4 million in one quarter." Nokia's results come a day after Apple revealed it had shipped a record number of iPhones in the December quarter. Apple's share have now slide 12 percent since following results that missed expectations. Alan Higgins is the chief investment officer at the UK bank Coutts. SOUNDBITE: Alan Higgins, Coutts Chief Investment Officer saying (English): "When it comes to Apple, the market needs to come to terms that that this is a modest growth company." Still, few seem ready to predict that momentum is shifting to struggling competitors such as Nokia. SOUNDBITE: Ian Fogg, IHS Screen Digest Head of Mobile saying (English): "Apple is still growing strongly in terms of device shipments, which set them up for the future. It sets them up with a good market share whereas Nokia is struggling to establish Windows phone in the market." Nokia Chief Executive Stephen Elop is under intense pressure to show he made the right decision in February 2011 to drop Nokia's own operating system in favour of Windows Phone. He has said it would take two years for a successful transition, and that period is almost over.