Standard and Poor's downgraded mobile phone giant Nokia's rating by a notch, blaming especially the Finnish company's difficulties in defending its smartphone market share, AFP reported.

S&P cut Nokia's long-term corporate credit rating to BBB- from BBB, with a negative outlook "reflecting the possibility of a further downgrade in the next two years," if the companies margins remain too weak and its cash holdings decrease too much, the ratings agency said in a statement.

Nokia meanwhile stressed that the ratings agency had highlighted its "conservative financial policy, strong balance sheet and very robust liquidity position," and insisted: "S&P's rating action will not have a material impact on our current financing costs."

The news did not appear to scare off investors either: Nokia's share price was trading up 0.36 percent in afternoon trading on a Helsinki stock exchange down 0.05 percent.

In 2011, the world's biggest mobile phone company posted a net loss of 1.2 billion euros ($1.5 billion), with a full 1.07 billion of that booked in the final quarter, compared to a net profit of 1.8 billion euros for all of 2010 and a profit of 745 in the fourth quarter of that year.

The plunge came as the company was undergoing a major restructuring, phasing out its Symbian line of smartphones in favour of a partnership with Microsoft that has produced a first line of Lumia smartphones.

Nokia is depending heavily on the new phones to help maintain its ranking as the world's largest mobile phone maker as it operates in a rapidly changing landscape with RiM's Blackberry, Apple's iPhone and handsets running Google's Android platform take growing bites out of its market share.