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Technology Stocks : Nokia (NOK)
NOK 6.795-0.6%11:50 AM EST

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To: Puck who wrote (14875)9/5/2001 6:29:23 AM
From: JohnG  Read Replies (1) of 34857
 
From CompewterDr on Rocket.
"

The PBCCH/PCCCH issue is a little more complicated than that. As I appreciate it,
PBCCH/PCCCH is a sophisticated packet control function that maximizes efficiency
and minimizes congestion in a GPRS network. Motorola already has the functions
working in its phone. However, most GPRS networks do not have the features
activated. Nokia is unsurprisingly not up to speed on them.

Nokia has suggested an alternative which was likely to be rejected so Nokia
"withdrew" it before it got embarrassed. However, since most networks do not yet
have active PBCCH/PCCCH functions, it appears that Nokia will be allowed to use
BCCH and CCCH, a less sophisticated control method which I'm not sure is even a
"packet" function, in order that GPRS phones can (finally) be sold in mass quantities
this Fall/Winter.

Since most networks will ultimately turn on their PBCCH/PCCCH functions, the
Nokia sets will have to be recalled to install it or, if feasible, will be simply used
without it, though the effects on a network of combining compliant and
non-compliant sets is not known. The latter option may not be technically feasible.

Nokia's public announcement today does not, as far as I know, deal with the
issue--they simply say "We are selling millions of GPRS phones" this year.
Technically, I suppose this is correct. However, the GPRS standard clearly requires
PBCHH/PCCCH functionality in order for handset to be compliant.

The Euros are letting Nokia off the hook, it seems to me. Operators have a lot of
say-so in these decisions. It is possible that the operators don't care what they sell.
They may be as desperate to sell GPRS phones this year as Nokia is to (finally,
after an about 18 month delay) put them on the market.

There was a good discussion about the issue this weekend at the SI Nokia board."

From VHerta on Rocket:
"VHuerta, if Nokia sells phones with a built in recall it will not sell them in significant
quantities. (Of course, this is always the case when manufacturers say that the
phones are available but in scarce supply, the reason is they don't work very well).

One of the reasons I stay away from investing in banks and the like is that by
relaxing loan evaluation they can produce loans which show profits in the short term
and losses in the long term. Its not easy to tell that that is what's happening.

If there is enough sales of these phones to impact Nokia's financials, this will be
very, very detrimental to Nokia's stock price, especially since the problem is known
in advance. (Remember how desperate Nokia was to get a CDMA fix so a recall
was not necessary.) "

From CompewterDr on Rocket:
"Vhuerta: OK, lets say your an operator. Assume Nokia offers a good price on the
phones, with the condition that they are not recallable for the PBCHH/PCCCH
functionality (or lack thereof).

If you can mix the functionality, its OK. Most of the GPRS phones will not be heavily
used for GPRS--they'll be used as phones, so you need only recall those actually
heavily being used. And you only need to recall if you are spectrum limitted. (No one
is claiming this can be done at this point, so why should an operator believe if Nokia
is not willing to guarantee it.)

If you cannot mix the functionality, you need to either recall the phone or wait to
activate PBCHH/PCCCH functionality until the non-compliant Nokia's are flushed
out of the system, some two years before there are very few of them left. If you have
sufficient spectrum, believe no one is going to actually use GPRS, or are really
concerned about keeping your job after spending billions on 3g spectrum this might
be the way to go.

If Nokia sells large number of phones with guaranteed recalls, that it is the all time
short signal for Nokia stock.

--the doctor
PS. I'll take a look at the Nokia thread sometime. "

From CompewterDr:
" I am told, but cannot confirm, that handsets without the PBCCH/PCCCH functions
can work fine in GPRS networks.

Once the networks activate the functions, why would they want a bunch of
non-compliant handsets causing network congestion? If I were an operator, I would
insist on Nokia doing whatever it took to activate the functions on non-compliant
phones. Otherwisde, I'd find another vendor.

The whole episode is a great example of how agreed-upon standards get written off
or are
"postponed" if a big player has a problem with them.

If the phones don't fit the standard, fiddle the standard! Nokia claims that
inter-operability testing has not taken place, that there is no sufficient verification
that PBCCH/PCCCH works, etc. No mention of the reasons why these problems
were not solved long ago.

Motorola apparently did not have any difficulty making its phones compliant. No
whining from it about the issue. "

From VHerta:
"Vhuerta, Of course, all large systems have bugs in them. Its a matter of the bugs
being important ("showstoppers") or tolerable. I remember a computer supplier,
selling Sun-clones and claiming "bug-for-bug" compatibility, as a benefit. Of course,
the dominant player does not have to play by the rules, Microsoft has been doing it
for years to destroy its competitors by aggressively inserting changes to make the
system incompatible with its competitors software.

But this gets back to Sfx's chiding me that what is taking so long is "interoperability
testing". This is why I think a paradigm shift is going on:

1. The standards process moves too slowly and produces results which are far from
optimal.
2. The number of levels in which two different implementations must be compatible
is enormous. If there was a single primary implementation, then that defines then
standard and the interoperability testing becomes smaller.

The technological issue which requires this paradigm shift is increasing complexity. "
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