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Technology Stocks : Nokia (NOK)
NOK 6.500-1.3%3:59 PM EST
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To: slacker711 who wrote (7868)10/23/2000 10:53:40 AM
From: Puck  Read Replies (1) of 34857
 
Ericsson management has said that they are killing five or six phones in development in an attempt to narrow their product line, as Motorola has done, in an attempt to focus in profitability at the expense of volume. Their most recent quarterly statement states unequivocally and clearly management's position about the desirability of them staying in the phone business. On the c.c., Jorma discussed the natural synergies between the handset and infrastructure businesses and why it is strategically important to be in both. What he said I believe lends credulity to Ericsson's oft-professed desire to remain in the handset business. Withdrawing from the handset market would prevent Ericsson from being able to fine tune their system sales to the desires of the operators for services. Everywhere I turn, I find speculation that Ericsson will spin-off its unit. I don't believe it. I can believe quite easily that eventually the production of a majority, if not all, of their handsets will be outsourced, but I just cannot believe that management would have reiterated their desire to keep the business if they thought the idea of exiting it was a viable opportunity. Also, they did suffer severely from the component shortages, and the problems Phillips had caused Ericsson to produce 8 mil. phones less than they had expected in Q3. A good deal of their underperformance has been the result of transient factors that should pass. After Q4 the worst should have passed. They have a lot of catching up to do in refining their logistics but there's no reason to believe they can't do this if they are open to new ideas.
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