MSDW:Mobile Net parnertship w/ AMZN AOL, > 30% mkt shr, Rising replacement mkt
Excerpts follow:
Company Description
Nokia is the world’s leading mobile phone supplier and a
leading supplier of mobile and fixed telecom networks,
including related customer services. Nokia also supplies
solutions and products for fixed and wireless datacom,
multimedia terminals, and computers. Divisions include
Nokia Telecommunications and Nokia Mobile Phones.
Key Investment Positives
· Widening competition gap in mobile phones. Nokia
claims its market share in mobile phones was over 30% in
the second quarter of 2000. This suggests Nokia is almost
twice the size of the next biggest player, and has significant
advantages in terms of economies of scale, supply chain
management and ability to drive the industry.
· Rising replacement market. We expect the replacement
market to continue to rise as a percentage of total units, up
to 60% by 2003. Because Nokia is a market leader with
good brand loyalty, the rising replacement market should, in
itself, drive the company’s share higher.
· Solid Networks business. Nokia’s wireless infrastructure
is enjoying good growth and has captured contracts for both
general packet radio service (GPRS) and third generation
(3G), the next generation wireless networks. Nokia is also
seeing good growth in wireline access, including digital
subscriber line (DSL). Margins should be sustainable at
around 18%.
· Mobile Internet partnerships. Nokia signed global
agreements with Amazon.com and America Online. Nokia
is teaming up with strong brand names, with an “installed”
Internet presence, to shape the mobile Internet, and we view
such partnerships as potentially very powerful. We think the
Amazon partnership offers significant potential for Nokia in
the mobile commerce space due to Amazon’s strong
customer base. Further, we feel the AOL partnership may
give Nokia a competitive advantage over the several other
smartphones currently available in the US markets. |
