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Most crucial for Nokia now is to turn around their sales and reach profitability as soon as possible

As Nokia Oyj depletes its cash pile amid a prolonged turnaround effort, investors are bracing for something that hasn’t happened in decades: no dividends.

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The unprofitable phonemaker is consuming about US$300-million a month, and many investors and bondholders say the company risks running out of funds as it struggles to gain traction for its smartphones, which trail Apple Inc.’s iPhone and devices using Google Inc.’s Android.

“Most crucial for Nokia now is to turn around their sales and reach profitability as soon as possible,” said Mikael Anttila, who helps manage corporate bonds, including Nokia debt, at SEB AB in Stockholm. “Until then, it would be rational for them to not pay dividends, to help maintain what cash they have.”

Without a dividend, Chief Executive Officer Stephen Elop risks alienating yield-focused investors at a time when Nokia’s stock price is headed for its fifth consecutive annual decline.