Nokia's (NYSE:NOK) Rating May Get Slashed by Moody's (NYSE:MCO)

Moody's (NYSE:MCO) said they're contemplating cutting the rating of Nokia (NYSE:NOK) one level, citing their ongoing struggles in the smartphone market.

New entries into the smartphone market, such as Apple's iPhone (NASDAQ:AAPL), and others, has the company continuing to lose market share.

Moody's said in a statement, "The rating review was caused by the gradual but steady weakening of Nokia's business profile and competitive position in mobile phones which has started to pressure profitability."

Because of Nokia's strong financial profile, Moody's said the ratings cut would only be one notch if it happens, and it would give Nokia time to hopefully adopt a new strategy to win back share in the smartphone sector.

Nokia is still the largest maker of cell phones in the world, but are getting crushed in smartphones.

At this time, Moody's has a long-term rating on Nokia of "A2," which affects approximately $7.22 billion in senior debt.

The review from Moody's was announced after Nokia reported profits in the fourth quarter plunge 21 percent, while its market share shrunk from 35 percent last year to 31 percent in the quarter.

Nokia was trading at $10.64, up $0.08, or 0.76 percent, as of 11:37 AM EST.