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Technology Stocks : Nokia (NOK)
NOK 6.640-0.4%3:59 PM EST
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To: Maurice Winn who wrote (1046)10/10/1998 9:32:00 AM
From: tero kuittinen  Read Replies (3) of 34857
 
That's beyond cool... I've always wanted to be in a class action suit. I guess it's too much to hope that they ask you to testify. If they do, make eye contact with jurors, don't blink too often and bite your lower lip in a display of suppressed emotional turmoil... that's what Bill did and it worked like a charm.

I have a good feeling about this Friday bounce. It was surprisingly robust compared to the rest of the sector, it actually left the stock *above* the pre-Merry Lynch level. I think Nokia might be doing some defensive whispering... it's the leak week ahead of us.

Somebody wrote to me about the pricing of the new Motorola models. It's beyond my ken. Apparently CDMA and TDMA Startacs are around 400 bucks and the new V-series (which might be called Vader... that should appeal to female buyers and business execs - adolescent Star Wars references) is between 500 and 700 bucks. This would be about five times higher than Nokia's 51xx series debuting simultaneously.

It's so weird. Motorola's big problem has been total lack of US TDMA and CDMA models - and when they finally get their ass in gear the entire product line is priced in stratosphere. What happened to the mass market approach? Aren't they at all concerned about the loss of 20% of US market in two years? Qualcomm has bumped Motorola to the number four slot in the American market and Motorola is trying to morph into Mercedes Benz.

I know this "skimming the cream" approach... Nokia is doing that with the 8810. But Nokia is also mopping up the mid-market with the 61xx family and the kids and other first time buyers with the 51xx family. Executive class is supposed to be the topping, you don't build a whole cake out of whipped cream. And you don't build your entire -99 US line-up on luxury products if your biggest competitor is quintupling their digital phone sales in your home market while consumers are switching to cheaper models amidst growing economic uncertainty.

I don't doubt that the loyal Motorola fans will flock to buy these phones. I don't doubt that Mot will see a profit spike in early -99. But I doubt whether they have added enough value to stop Nokia's market share gains. I just don't think Motorola as a brand has the kind of magic it takes to demand huge price premiums, especially among the key group of first time buyers. They are walking down the Apple path of high margins and steadily shrinking market share. It can be a pleasant stroll while it lasts... but the destination is pretty grim.

Tero

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