The report, which was compiled by credit rating assessment company S&P, said:
'Smartphone revenues could start rising by the end of 2012, and contribute to a stabilization of revenues in the Devices and Services division toward the end of 2012 or the beginning of 2013 because Lumia devices are higher-priced.'
S&P believes Nokia's success could dwindle in the mobile phone market, especially in China and India 'where demand has been significant for low-price smartphone-like devices,' the report said.
Nokia has previously admitted it needs to go cheaper still with Microsoft's Windows Phone devices, something that is now within the realms of possibility thanks to Microsoft's new lower minimum hardware stipulations granted by the Tango update.
Given that its Symbian range is struggling against Google's Android, and the significant gap between the Lumia 610 and its Asha devices (such as the Asha 302) in terms of price, it's clear Nokia needs a €100 Windows Phone to remain a serious contender in emerging markets.
Towards the end of the report S&P suggested Nokia could see its credit rating downgraded:
'The negative outlook reflects the possibility of a downgrade in the next 12 months if we see that the non-IFRS operating margin in the Devices and Services division remains at or below break even, or if consolidated FOCF remains negative, as this would further reduce Nokia's net cash position.
This could be the case if revenues from the Lumia smartphones do not increase significantly as we currently expect, or if margins deteriorate further due to competitive pressure.'
'We could revise the outlook to stable if revenues in the Devices and Services division stabilize, cash burn declines significantly, and non-IFRS operating margins return to at least mid-single-digit percentage level,' S&P concluded.
Without knowing exact sales figures, it's difficult to say whether Nokia's Windows Phone strategy is paying off but it certainly looks that way from where we are standing.
Mobile phone retailers in Europe are the first to admit the Lumia 800 has been outselling anything from Android as of late.
And let's not forget the adoption in the USA has been very positive, according to Nokia CEO Stephen Elop, even though the UK has proven a 'challenging' market.
Source: Know Your Mobile