Sorry Mark, WSJ charges for its on-line articles and I don't have access. The article slammed Motorola for having substandard switches and losing massively market share in the network sales.
The way I see it, Nokia is up by over 20% in two weeks even after yesterday. I'm not really looking for a pot of gold in stock investments... 30% annual gain would be fine by me. If you want more than that, you have to invest in small, risky companies and I don't have the stomach for it. I'm looking for 200 $ price for this stock by 2000 or 2001. Then it's perhaps time to consider exiting. It's a really bad idea to fall in love with your stock. If it performs, keep it, once it stops delivering, dump it. When Nokia reaches Lucent's P/E ratio it's time for soul-searching.
So far, Nokia has more than delivered, going up by nearly 150% in two years and keeping a low P/E ratio. In the same timeframe companies like Motorola and Qualcomm have floundered, one because it's past its prime, the other, because it doesn't quite deliver what it promises. I don't see the point of people who hold onto stocks like this. They have already lost a 120% gain by not owning Nokia. How are they ever going to recoup that, even if there's a turnaround?
In the meanwhile, I can even take a slide back to 80 bucks, if it comes to that. There was a neutral rating by some rinky-dinky investment outfit yesterday and Ericsson beat Nokia in a Morocco GSM bidding. Neither fact terrifies me.
Jim, I know very little about WLL. It's not Nokia's top priority. I chose the article snippet as yet another example of how the Koreans suddenly appear much more interested in GSM/W-CDMA sector. Samsung recently said that it will enter the GSM phone market, because it cannot be a true mobile giant without doing so.
Quincy, the Japanese and Koreans seem really bullish on W-CDMA (as opposed to Qualcomm/Motorola/Lucent brand of 3G). *Every* mobile company is spending plenty on 3G technology. You buy that risk when you buy company stock. The best return for your investment comes from companies who get the best return from the 3G investment. How on earth is Mot or Qcom going to get better return for their 3G investment when they are betting on a standard opposing W-CDMA, which is going to blanket Europe and Asia? Regardless of whether the 3G technology catches on fast or slow, the companies that back a minority standard will get hurt worst. There's a major expansion going on among GSM operators; they are complementing the 900 GSM with 1800 GSM. That big investment leaves no room for GSM-overlaid CDMA. By the time the 1800 expansion has peaked, the W-CDMA has arrived to market.
To whom is Qualcomm going to sell the GSM-overlaid CDMA? How will it recoup the R&D expenditure? I want to invest in companies that get maximum return for their R&D. I don't care whether that company is on the bleeding edge of technology, as long as its products sell. Nokia is getting 3-5 years out of its handsets. Is Qcom going to make any profit from the first Q-phone? The dual-mode Q-phone is arriving this summer and people have been reluctant to buy the digital-analog Q-phone by the company's own admission. Now the first Q-phone will get buried by the new model after never really catching on. To me, this is huge waste. A recent article claimed that Qcom's phone profit margins are in the low single digits. This is outrageously low considering there has been no competition. This is the drawback of investing in small companies - they lack economies of scale, cannot gauge consumer reaction and project sales accurately (as the Q-phone incident showed), are vulnerable to price wars because of lower profit margins and cannot promote new standards effectively due to lack of trust from foreign operators (witness CDMAone in the process of flopping outside of USA).
Tero
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