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Technology Stocks : Nokia (NOK)

NOK 6.730

-0.7%

Nov 14 9:30 AM EST

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To: Mats Ericsson who wrote (1073)	10/19/1998 4:32:00 PM
From: tero kuittinen	Read Replies (2) of 34857

You know, there are signs that Nokia's market share in mobile phones might top 30% by year's end. While Ericsson remains around 15-16% and Motorola skids to 17-19%. I don't think it's unreasonable to expect that after these numbers are confirmed by Dataquest investors will be willing to pay a considerable premium for the privilege of owning Noka. People are so fixated on the new models of Motorola and Ericsson that they seem to forget that bringing a new platform into market is only a part of the battle. Far more important is how competitively these phones are priced and how quickly the models reach the core markets: USA, Europe and China. Right now the evidence seems to show that Motorola is unable to bring a mid-priced, advanced digital phone to the key US market. Instead, they are bringing out 400-700 dollar phones that cannot compete with Nokia models in volume sales. The new Motorola iDEN phone offers 50 hours of stand-by time - that's about 20% of the stand-by time offered by an almost year older Nokia models that also weigh less. I'm not seeing a company that is taking initiative here... I'm seeing a company that is unable to match the price/performance/weight ratios of substantially older Nokia models. This is not a viable strategy for retaking market share. And Ericsson? This company is currently running a huge ad campaign in Europe pushing the 768/788 models - phones that have a single line of text in their displays. These displays look like they were riped off from TI calculators from mid-Eighties. One line display against five lines in Nokia phones. That wouldn't be shocking if these phones had some advantage to counterbalance this shortcoming... but they are taking a beating in standby times as well. Yeah, they'll have new phones in spring... but it isn't even winter yet. Ericsson clearly misjudged the lifespan of their models. If they sink to 14% global market share before their rebound begins, what good does the new platform do? They'll be 16 points behind Nokia by then. Besides, the new platform will be GSM 900. No word when it will reach USA... but that will probably not happen before the winter of -99/-00. Yeah, that's next millennium. And Nokia shipped the 61xx phones in USA one month after the European launch. Tero

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