Nokia’s shares have lost 90 percent in five years, and two of the three major ratings agencies cut its debt to junk last month. After losing heavily its position in the to Apple’s iPhone and models running Google’s Android software, Nokia has been losing its value in the basic phone market, which had been a reliable generator of profits.
Nokia’s basic phone sales fell 16 percent in the first three months of 2012, and have fallen in four of the last five quarters, while rivals like China’s ZTE and Huawei have been growing fast.
China’s largest search engine Baidu Inc is also planning to enter the cellphone market with a cheap smartphone. The new Nokia 110 model will be sold for 35 euros ($45) and will start shipping in the second quarter, while the 112 model will be sold for 38 euros from the third quarter, with both using Nokia’s Series 40 software, the Finnish phone maker said.
Nokia said new models would come with a license to download 40 games by Electronic Arts and offer Internet access with the a new browser built upon its 2010 acquisition of U.S. firm Novarra.