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Technology Stocks : Nokia (NOK)
NOK 6.585+0.8%Dec 24 12:59 PM EST
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To: Jim Lurgio who wrote (531)2/12/1998 9:59:00 AM
From: tero kuittinen  Read Replies (2) of 34857
 
What the hell is this? When Nokia said they were delaying the new phone introductions until after Christmas because the older models were still so profitable... they were actually right. Nobody believed them. I can't believe how much money they are able to squeeze out of 3-5 year old models with only minor modifications. The GSM market has been flooded with new competing products, some of them priced below floor.
The handset profit margins are hitting the roof even after steep discounting. Looks like this is making the markets willing to overlook the sluggish sales growth. The economies of scale really are Nokia's big strength. The sales volumes are so high that apparently Nokia can keep slicing the prices of even recent models like 3110 and still become more profitable. If this is how they do business with aging stock I tremble when I think about what happens now that they actually have a new phone line on the streets. Of course, the design work of Nokia phone must have something special about it if the phones do not age as fast as the competition.
Infrastructure was great as expected, but I doubt that surprised anyone. I suppose the real anxiety was about the phones and the approaching dreaded commodity status. Not this quarter, apparently.

Tero
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