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Technology Stocks : Nokia (NOK)

NOK 6.070

+0.2%

3:59 PM EST

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To: tero kuittinen who wrote (1003)	9/22/1998 7:52:00 AM
From: tero kuittinen	of 34857

Another one bites the dust... a profit warning from Phillips. "The company (PHG) cited a "significantly higher" loss in its Philips Consumer Communications unit, a telecommunications joint venture with Lucent Technologies (LU) and lower income from its display components unit." It's noteworthy that the Phillips/Lucent mobile handset venture lost more than 120 million bucks in the first quarter. Since Phillips shrugged that off without comment one can only wonder what "significantly higher" loss would be. The handset division is drowning them in vermilion ink. That venture could bleed close to half a billion dollars this year alone. That's enough to dent the profit growth of both Lucent and Phillips, two of the biggest, savviest tech companies around. And they were talking about becoming a top three mobile phone company in three years. It's another Greek tragedy of considerable talent and fatal hubris. They are now selling Phillips Diga in Finland at 60% lower price than Nokia's cheapest new model. Even rock bottom pricing hasn't excatly created a stampede. They are probably losing market share (which they don't have) on top of making unprofitable products. I would think that they simply have to sell off or shutter the handset division at some point. Tero

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