Yeah, Paul... you gotta think about January price of Nokia any time there's a panic attack coming on. It's a very good performance over Lucent, Ericsson, Nortel, Motorola and Alacatel - that's probably most you can hope for these days.
Marden, no I haven't see that before. That was interesting. I think the GSM production capacity within China will become more and more important factor against CDMA as time passes and devaluation pressure increases. This country can ill afford a massive wave of imports a wide-scale CDMA introduction would bring.
These are hard words to write, but I'm kind of glad that Motorola finally showed a pulse in cellular products sales. This has already given Noka a new lease on life here in Helsinki, however irrational it is. At least there won't be another panic in mobile telecom a day after 10% declines. Thank you, Chris. And I'm also grateful for the skillful cooking of the numbers - now it seems that a seven cent profit (which actually is a loss masked by a charge) is a major victory for Motorola... and that's good for the sector.
You don't have to scratch Motorola's facade much to make the paint flake, though... the 38% decline in paging sales was monstrous. The whole division is coming undone - just after a massive investment splurge and the introduction of new cutting edge two-way paging products. Together with dismal semiconductor sales it's a real double whammy. Their profit margin is all shot to hell - I don't think they can patch things up with new phones. They have to get rid of one of these loser divisions at some point. Which just might be a boost for the stock price.
The 9% increase in cellular product sales *was* pretty good. Now they're only 24% behind the break-even 35%, which would finally halt their market share losses. I'm going to view this as a sign of the fundamental strength of the mobile telecom sector. If the new TDMA and CDMA Startacs click, Motorola could conceivably reach that 35% growth in 1Q 1999. It's going to be interesting to see whether Ericsson can show similar signs of a turnaround this quarter (5-10% sales growth). Nevertheless, Nokia should hit at least 60% sales growth in phones this quarter - compared to this it matters little whether Mot and Ericy deliver 5% or 10%.
Tero
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