Oppenheimer downgrades Nokia (NYSE: NOK) from Perform to Underperform, with no price target.

Analyst Ittai Kidron said that as competition strengthens in the latter part of 2013, Nokia's handset business will be a consistent drag on financials. Recent new handset introductions -- like the Lumia 1020 -- come at a difficult time as Apple (Nasdaq: AAPL) and Samsung are discounting popular devices.

Kidron said Nokia Siemens Networks (NSN) will be a key stability point for Nokia. Risks are margin gains being largely driven by cost cuts and continued asset sales aren't a viable part of the strategy for NSN.

Bloomberg-compiled data Monday from the company's latest quarter has about 5.7 percent of gross profit coming from smartphones, with about 32 percent of overall gross profit from Nokia's phone segment. About 49 percent of gross profit is from Nokia's Networks unit.

In early trading Monday, Nokia shares are down about 1 percent.

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Shares of Nokia closed at $4.03 last Friday, with a 52 week range of $1.67 - $4.90.