Hmmm... they also made the claim about better than expected digital phone sales. Which of course raises the question of just how low were the expectations. These guys could give a spinning lesson or two to the White House staff. As a whole, the announcement was painstakingly crafted to divert the reader from focusing on competitive problems in mobile sales. Semiconductors, pagers, shift from analog to digital... every reason for bad performance expect the one that is crucially important for mobile investors. Is Motorola still losing market share in digital phones and digital network sales? How badly?
Ericsson made a very aggressive move by explicitly stating that they are experiencing no problems whatsoever and that CDMA is in trouble in Asia while GSM is doing just fine. 8% bounce in stock price was the result. Helped Nokia, too. I just wonder whether this was really smart, since now the expectations towards the first quarter results are very high. They haven't made unsubstantiated claims about sales growth before, though, so this is potentially very good news indeed.
If it's really true that Asia's woes might have a selective impact on mobile sales and GSM would be the benefactor, this is a real windfall. Just the same, I'm glad that Nokia kept a lower profile. The quarterly results will show the situation and Nokia will get a bigger boost for not inflating expectations beforehand. The company *has* stated this week that they have raised the mobile phone profit margin target and this led to a buy recommendation by some obscure Swedish investment bank here in Scandinavia. Nokia already has by far higher margin than Ericy or Mot, so if they are raising the bar at this stage they must be feeling pretty frisky.
Mot is now in the danger of being sucked into a maelstrom of negative publicity. The network brouhaha was bad enough... now they could be a real backlash following into the next quarterly announcement. Business reporters are focusing on Mot at the most vulnerable moment: in the middle of major digital product launches by Nokia and Ericsson in the US. This is highlighting Mot's perennial problem of digital incompetence. Maybe we'll finally start seeing articles with direct comparisons among the companies instead of ones ignoring Nokia and blaming Mot's problems strictly on the management.
Yesterday's see-saw effect of Mot's plunge and Ericy-Noka spike was the first time that Motorola's bad news translated into a substantial gain for the Nordic companies. Are we finally seeing defections from Mot into Noka and Ericy instead of out from the mobile field entirely? Most middle-of-the-road investors don't have the guts to buy more than one mobile company, so this is a pivotal issue.
Tero
|
