Both reports you have linked maintain a strong buy recommendation on Nokia.
I think that this must mean more to you than it does to me. I pay no attention to either the recommendation or the price target on research that I read. I'm looking for information on the fundamentals that I would have difficulty getting from other sources.
In your eagerness to find negative things to say, you seem to have overlooked a few things in the reports.
I think you need to look at the body of my posts. I have been pretty negative over the last 6 months because the fundamentals have justified this position. During last summer, I had thought that Nokia might achieve a 40% marketshare.
I don't see anything that justifies your "stunningly bad couple of months" comment, and I hope that readers will look at the reports for themselves.
I certainly hope that readers will use the links that I supply and not rely on my interpretation....but I stand by my comment. Let's look at some of the events over the last couple of months.
- Nokia's GPRS handsets were originally supposed to be out during the first half of this year. We are now only debating exactly how late the handsets will be....if they dont have a high volume launch by Christmas, it could be disastrous for marketshare AND margins. Currently, four companies have commercial GPRS handsets....Siemens, Ericsson, Motorola and Samsung. For the first time in years, Ericsson look like they will have a lineup that will be able to compete with Nokia's offerings. This is a dramatic change from last year.
- The changeover from TDMA to GSM in the America's is going to hurt Nokia in the handset division. Nokia's marketshare in GSM is nowhere near the 60-70% that they had maintained in TDMA....and the Soundview report implies that they are even losing share on the TDMA front.
- The disaster continues in CDMA. Last winter they managed to make some progress with their CDMA marketshare by shipping a significant number of handsets to Verizon. Of course, this was prior to the freeze on sales due to the signaling glitch. This year, Ericsson is the company with the million handset contract from Verizon for handsets during the next quarter. The IS-95A handsets which they launched in Korea came at the precise time that 1x was beginning to get traction. Those handsets will be doorstops by Christmas.
Can the above problems be fixed? Sure....they just need to get the GPRS handsets out IN VOLUME by Christmas. However, they are still going to be facing significant problems. The transition from TDMA to GSM and the disaster in CDMA are problems which wont go away. Also, though the GPRS handsets which they are launching will likely be competetive this Christmas....they are likely to be outdated by next summer. Ericsson's T68 has far more features than anything that Nokia has shown. The window is must shorter for sales, when you are the last player in the market.
Nokia's success over the last three years has been at least partially due to the fact that their competitors have been absolutely inept. If this changes (as it looks like it may be), Nokia is going to need to perform dramatically better than it has during the last couple of quarters.
Slacker |
