A mild disappointment from Ericsson. This looks good for Nokia. The crucially important infrastructure sales grew by just 25%. Nokia's equivalent 41% sales growth shows that Ericsson's market share erosion is continuing steadily. Nokia has now five or six consecutive quarters of quicker growth.
Mobile phone sales were up by a whopping 45%, though. This was a downer. Nokia's 29% growth in handsets was an improvement, but the company evidently still lost share during first quarter. Well, at least Nokia is resurgent. Ericsson's handset biz is gobbling up Motorola's market share like there's no tomorrow. At this rate Motorola will be a distant number three by year's end.
Nokia does have a show-stopping schedule of product introductions going on. Low-end 5100 is introduced this month and high-end 8810 next September. I'd say Nokia pulls slightly ahead of Ericsson's growth rate during second quarter and then sprints ahead on the second half. Nokia's dual-band phone coming next fall will be based on the white-hot 6100 platform, while Ericsson's dual-band phone is built on the hoary old 688 platform. Nokia should have a clear advantage in autumn in just about every segment.
If Nokia is ahead in infrastructure and Ericsson still hangs on to its momentum in handsets, I'd say the "Other" business sector is the tie-breaker. And here Ericsson is still stuck in the mud. Infocom is a slow-growth, low-profit millstone around Ericsson's neck. By comparison, Nokia's "Other" businesses grew by over 30% rate, when you take into account that Nokia sold its automotive electronics business.
The result: Ericsson's overall sales growth was dragged to 25%, which is not meatloaf, but is not up to Nokia's standards and will look even worse when Nokia's phone sales growth boosts above 40% later this year. This means Nokia's overall growth rate might edge close to 40%... but Ericsson's sluggish Infocom sector guarantees the company can't follow suit, no matter how well the phones sell.
Upshot; Nokia's risque "bet the farm" strategy of selling every business branch that is not growing rapidly is finally helping it to pull off from the competition. Ericsson remains mired in the Infocom swamp and Motorola is dragged down by paging and semiconductors. Nokia's most serious competitor, Ericsson, is losing ground to Nokia in network sales, while Nokia is in the process of overtaking Ericsson in the phone sales growth.
Tero |
