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Technology Stocks : Nokia (NOK)
NOK 6.775-3.6%Nov 13 3:59 PM EST
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To: brian h who wrote (2573)10/25/1999 4:45:00 AM
From: tero kuittinen  Read Replies (2) of 34857
 
I think this is where the Finnish and American viewpoints clash, Brian. You think that it's some sort of a triumph that Qualcomm has managed to guide analysts to expect 40-50% annual growth... I think it's exquisitely dumb. Nokia has kept the expectations in check and held on to their 25-35% projection - which is eminently beatable.

Where's the Qualcomm upside? When a company has promised everything and the kitchen sink to analysts - how can they beat the numbers? Nokia execs could also have walked up and down the Park Avenue last summer promising the moon and the stars to anyone who listened. They could have dropped heavy hints about mobile network sales performance and phone margins. They didn't - God gave them enough sense to keep their traps shut.

The big story of last week was Nokia and Ericsson mobile network performance - both growing at around 40%. That was what outraged and titillated Wall Street so much. Most telecom analysts have bought the P.T. Barnum circus act that CDMA proponents have put up for them. They sincerely believed that GSM and TDMA network growth was in decline - because the boys from San Diego told them so.

So the 40% mobile network sales growth coming from both N and E *after* Motorola announced its CDMA network sales are declining... that shocked the monkey. That's how you build a reputation for beating expectations - by delivering more than anyone expects. Let's see how the expectation for one million Globalstar subscribers by the end of next year can be beaten. That should be entertaining to watch.

I don't think CDMA is any less important than TDMA for Nokia. You can't build a South American handset business without a good TDMA line-up and you can't build a North American handset business without solid CDMA models. But neither can match the sales volume from the 100 GSM countries - there's no way around that.

Tero
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