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Technology Stocks : Nokia (NOK)

NOK 6.835

-1.1%

Nov 7 9:30 AM EST

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To: tradeyourstocks who wrote (6785)	8/2/2000 1:30:45 PM
From: tero kuittinen	Read Replies (6) of 34857

I don't get this black/white stance on mobile data speed. Of course data speed matters - but it's not the most important factor. My problem is with people who bluntly state that the highest theorethical data transfer speed automatically turns a standard into a commercial juggernaut. No, it doesn't. High data speed offers a chance to get out very compelling handsets and content. It doesn't guarantee it. Right now, the best mobile handsets in Japan are PDC models. That's because vendors have been spending billions to develop them and will continue to do so. It's not possible for a niche standard to match the R&D muscle. The results are showing - in phone size, retail prices and the quality of color displays and the number of sites developed for iMode. Another example would be the leading video game companies flocking to DoCoMo to start major game and entertainment initiatives for W-CDMA. How do you quantify the impact of that on teenage consumers? I bet they didn't talk about this in the engineering school. You can't quantify the impact of this stuff by looking at the data transfer speed Power Point charts. Who Sony and Nintendo decide to really back is going to be a whole lot more important than whether the real-life W-CDMA speed is going to be 140 or 350 kbps. Hollywood studios killed Betamax by simply refusing to release decent back catalogs for it. The initial sales disadvantage of any standard can be amplified by what content providers decide to do. That hasn't been an issue in mobile telephony - but you bet it will be. And that gets us to the real point - the price of handsets. Yes, it would be nice to have 500 kbps handsets. But not if the retail price will be 1'000 dollars. Satellite telephony was a really "cool" concept that drove many engineer investors into a foam-mouthed frenzy. Too bad real-life consumers don't make purchasing decisions based on "Telecommunications Digest". If 120 operators don't give GPRS the ultimate economies of scale in mobile data, I don't know what will. Balancing the economies of scale with the potential benefits of rival technologies is hard, of course - but looking at the order books is pretty simple. It seems to me that operators have made their decision by an overwhelming consensus. Tero

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