"BY SALES, nok IS GE or GM or IBM"
OK - that's enough dirty words for one post. As far as Dell, Compaq, IBM and the rest are concerned, I suggest rifling through "Luxury Fever" in some bookstore. It's not worth buying, but has a lot of interesting ideas. The luxury product market is now exploding and companies that are able to exploit that are on a gravy train. If the current wealth effect generated by booming stock market continues, the high-end niche will expand in all consumer electronics.
Since when has Dell been able to ask for stiff premiums - and get away with it? Nokia has and is. The 1'000 dollar 8800 series is a bona fide hit in Asia and Europe. The new, low-end 3210 asks consumers to pay a 100% premium over low-end Erisson and Motorola phones. That's 100% as in "twice as much". I'd like to see a PC manufacturer with that kind of chutzpah. I'm not into companies that compete by churning out ever bigger volumes by ever lower prices. Even if you win that particular rat race you still end up being a rat. I'm into companies that can command price premiums by adding value. You need that low-end presence to bulk up production volumes - but you also need a very clearly defined, separate high-end line that produces 50% margins.
Motorola is probably the only other company so far that has really understood the importance of product segmentation. But their problem is that nobody wants their low-end phones - only the high-end Startacs, V-series and L-series have real appeal. Ericsson is now trying to create the high-end segment with the T28. We'll see how that goes.
Xmas is the key season for all phone makers - 4Q can be twice as big as 1Q. Nokia has apprarently designed the whole product year at delivering during 4Q. I wouldn't make any real judgements on competitive situation until we see the reception of 8850, 8860 and 7110; all of which ship during 4Q.
Caxton - I simply don't like the industry lobbying group statistics. It's a lot better idea to contact Dataquest, Merrill Lynch or Alex Brown and ask for their reports. They get it wrong as always, but at least there's a pretence of impartiality. Don't get cheap on me here; with your QCOM gains you can afford to buy a report or two.
Tero |
