Tero,
Let me start off by saying I think Nokia and Ericsson are both fine companies and fine investments. I do, however, find it interesting that the comparisons you keep coming back to are always based on the percentage change numbers. Sure, Nokia has a greater percentage change... because their starting base value is so much smaller than Ericsson's. If you(Nokia) sold 10 of something last year and boosted your sales to 20 this year, and I(Ericsson) sold 100 last year, and added capacity and sold 50 more this year, you would have a great 100% increase and I'd have 50%, but I'd still be making 7.5 times what you are in absolute sales, and would have better incremental sales as well. At the same rate (you going up 100% every year, and me going up 50% every year), it would only take you 8 years to equal my sales.
The other thing to keep in mind when you assume that Nokia is eating Ericsson's lunch is that they keep adding new courses to the festivities. The telecom sales world is ever growing, and not static. Just because Nokia increases their sales, doesn't mean they took them away from Ericsson (allthough I imagine this does happen from time to time when they bid against each other). If there were only 100 of anything that could be sold, and you increased your sales from 10 to 20 and my sales decreased from 90 to 80, yes, you'd have taken sales away from me. In this case however, the number of items sold grows to 100+ and we both grow.
I'd also be hesitant to write off Ericsson's Infocom Sector as an eternally underperforming asset. Their new AXE switch was only recently released, and changing product lines is rarely a profit friendly activity (although highly necessary).
In summary, while Nokia and Ericsson both seem to be doing quite well (and a lot better than some CDMA only companies), I think it's far from a sure think that given the latest quarterly results Nokia is soon to be the Telecom Terminator...
DWB |
