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Technology Stocks : Nokia (NOK)
NOK 5.935+1.0%Nov 21 3:59 PM EST
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To: tero kuittinen who wrote (4106)4/11/2000 6:10:00 AM
From: Maurice Winn  Read Replies (2) of 34857
 
Tero, declining margins for handsets is good. That's part of the reason for licensing dozens of CDMA handset makers. Good? For whom? Well, it sure isn't good for Motorola as you say, even though they have a 1980s buddy deal with QUALCOMM on CDMA royalties. It is good for QUALCOMM because it means billions of CDMA handsets will sell.

But Nokia is not in the best position either. Nokia is weak in CDMA. While GSM is making $$billions for Nokia and the GPRS data trajectory will make even more $$billions and fast, there is a glitch ahead.

Nokia has to somehow get from making $$billions on high-end GSM to making $$billions on CDMA. That is still not a certainty.

Ericy seems to be trying an end-run around Nokia via HDR and cdma2000 while keeping W-CDMA at hand to pinch-hit for defense [these mixed sporting metaphors are such fun].

It's fun watching the CDMA pressure build on Nokia. Nokia will one day have to do an Ericy and grab CDMA with both hands. Nokia has to avoid CDMA development as much as possible, while preparing flat out for the day the dam bursts.

Those GSM profits are stupendous and when the hungry, low-margin, high-quality, CDMA hordes [40 something subscriber product licensees] from Korea, China and Japan start flooding the market, Nokia's market share is going to look like a Zimbabwe farm with 4000 new owners crawling all over it. There is a LOT swinging on Nokia contriving to make W-CDMA work.

Maurice
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