Nokia v Ericsson. Under today's market perspective NOK has an advantage against ERICY. ERICY has a chance to turn the tables against NOK as MMS picks up. There lies the window of opportunity to ERICY and the risk to NOK.
Lehman Brothers issued a comparison on Tuesday on the outlook for Nokia and its Swedish rival Ericsson [SE:000010865, News, Chart, Research] [US:ERICY, News, Chart, Research] [UK:ERI, News, Chart, Research] , where network sales account for around 80 percent of its business. See Ericsson Roams World telecom daily
While Nokia's lead in handsets is a given, Lehman says its product mix in mobile network systems is also better suited to market trends over the next two years and its growth should comfortably exceed Ericsson's.
Ericsson and Nokia have around 40 percent and 35 percent market share in 3G contracts respectively. But the Swedish company is exposed to all other market technologies compared to Nokia's focus on GSM/UMTS, an addressable market set to grow from 62 percent to 80 percent in the next 5 years or so. Overall market growth will be slower.
Ericsson is also exposed to regions of the world heading for a prolonged downturn, according to Lehman. In particular, Latin American orders fell 69 percent year-on-year in the third quarter. See Ericsson third-quarter results.
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