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Technology Stocks : Nokia (NOK)
NOK 6.070-0.2%12:59 PM EST
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To: Dwight E. Karlsen who wrote (437)12/3/1997 12:53:00 PM
From: tero kuittinen  Read Replies (2) of 34857
 

Pretty amazing. They have a whole family of cutting edge handsets (the 6000 series) coming in February and Nokia is the only company in the biz to introduce a new model in all major markets simultaneously (Europe, USA, Asia). I've read several comments on how this should boost profitability considerably and offer maximal gains from economies of scale. Motorola and Ericsson tend to drag out the product introductions over a year or so, I think Ericsson is only now getting the 788 model to the States. The 6000 is by all accounts a credible new entry, the first phone to offer infrared links, the best talk time/weight ratio around, etc. It's also the first GSM-AMPS dual mode phone in the States. And this is the time to downgrade? There's also Japan's first voice-dialing phone to be introduced in February and that phone weighs under 100 grams.
Against this background I just don't see what the claims about decreasing profit margins in 1998 are about. 1997 was supposed to be the tough year on profitability, since the aging handset line-up is at its least competitive form right now. The new product introductions should really turn things around in 1998. I don't believe the current problems in Asia can possibly justify this level of hysteria. Ericsson's lay-offs will hit the sluggsih infocom sector, not the mobile business. This current stampede shows how incredibly volatile the mobile sector stocks are. Not for the faint-hearted.

Tero

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