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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: Mika Kukkanen who wrote (3612)	8/13/1999 10:22:00 AM
From: Wyätt Gwyön	Respond to of 5390

Mika: Would MOT not be interested in Ericsson's GSM handset assets? If they can spare the energy whilst in the middle of the IRIDiculous fiasco... Greg

To: Mika Kukkanen who wrote (3612)	8/13/1999 10:40:00 AM
From: tero kuittinen	Read Replies (2) \| Respond to of 5390

I'm sure Siemens or Alcatel would be interested. Alcatel lacks any presence in the high-end market, so T28 and R380 would be a great fit with the pretty succesful low-end Alcatel models. However, the whole idea of selling the handset division just before an anticipated come-back does not make any sense. You saw the Ericsson comment about becoming world's number one mobile phone brand. That's a pretty accurate reflection of this company's self-esteem. They would never be able to face the humiliation of exiting the consumer market at this point. And why should they? They kept their global market share well above 10% by making some hard decisions about price cuts. That strategy only makes sense if they bought market share for a reason - to keep the brand afloat while waiting for the new model range to arrive. Next winter they get their shot at staging a come-back. Motorola pulled off their rebound earlier this year pretty smoothly. Ericsson's new models are clearly competitive with Motorola's range: T28 will apparently be priced below V3688, but it will pack features like voice-dialing. It seems likely that R380 will debut before Motorola gets its own WAP phone off the ground - and R380 offers more display size per weight than any other entry. Moreover, Ericsson's Bluetooth and GPRS strategies only make sense if they get full synergy benefits from selling these technologies and/or infrastructure to other companies and then getting compatible phones to the market before most of the competition does. Bluetooth arriving during 2Q 2000 and GPRS handsets during 3Q 2000 isn't too ambitious schedule. It's possible that next summer's high-end phone sales will be defined by these features. At this stage we'll get a real idea about Ericsson's competitiveness. They might as well follow the plan and then rethink the handset strategy when they see how well it clicks. If Bluetooth and GPRS phones are in high demand in GSM-900 markets next year, Motorola will have some explaining to do about their strategy of concentrating on two-way pagers and satellite phones instead of the evolution of mobile data in digital land-based mobile phone netoworks. If Motorola was a fairly safe turn-around bet last January, Ericsson is that right now. I don't get investors who are looking at Motorola now. If you wait until you're absolutely sure that a turn-around has taken root you often run smack into a post-70% gain relapse. Tero