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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (5317)	6/8/2000 11:06:00 AM
From: tero kuittinen	Read Replies (5) \| Respond to of 34857

I take a few days off and this thread goes to hell in a handbasket. There's some grim satisfaction to be found in this... it confirms my worst suspicions about the tyranny of the Qualcomm cabal currently strangling SI. Nokia has now a clear shot at the 100 million new GSM subscribers that Telecom and Unicom will sign during the next three years. Samsung's strategy of betting on a Chinese IS-95 build-up has been exposed as a disastrous miscalculation. A torrent of new WAP, GPRS and GSM-900/1800 deals for China has already started this week. Even more crucially - the recent Dataquest numbers reveal that Samsung's global mobile phone market share was flat during the 1Q 2000, pushing Samsung further behind Nokia even before the Unicom debacle yanked the rug under their Asian strategy. Which reveals the naked cluelessness of all those "Samsung is coming!" cassandras sliming up this thread. There are all these fascinating developments going on; and what's up with the Nokia thread? A biblical infestation of obsessive Qualcomm apologists. When Eastcom became an important GSM manufacturer in China, it was generally ignored by this thread. Now it's all of a sudden "a key to China" after the license agreement with Qualcomm. Never mind that these Qualcomm "license agreements" are already notorious for being so devoid of actual meaning. The Ericsson "licensing agreement" on CDMA phones that was supposed to herald the new age of Ericsson's comitment to CDMA took place more than a year ago. We just saw the most exciting new Ericsson models released for years; Bluetooth, GPRS, HSCSD, GSM tri-mode. Ericsson is still putting their cutting edge technology into GSM market. And so will Eastcom - this week's hype is a transparent PR counterattack that is supposed to neutralize the real China news from Unicom. Time for technology cooperation in China was years ago - as Nokia and Ericsson realized and many companies did not. Eric - the "achitectural control" you refer to is what makes Gorilla Game so pernicious to ordinary investors. They don't realize that this "control" can be pure poison in mobile markets. Motorola has that control over iDen; and it has turned into a millstone around its corporate neck. There is nothing as inimical as an orphan standard; whether it is iDen or Globalstar or cdma2000. It creates a constant drain on R&D resources, prevents the company from concentrating on the winner standards - and never yields the kinds of economies of scale that are necessary for big profits. I don't think that Motorola is making a penny of profit from iDen phones. They simply can never reach the production volumes to justify the independent R&D expenditure that iDen division is ravenously consuming. Moore's definition of a Gorilla is thus exactly what a mobile telecom company shouldn't be: obsessive about retaining control over new standards. Nokia and Ericsson could have gone for proprietary GPRS technologies and retained full control over them. No doubt many Gorilla cultists would have wet themselves over this approach. However - Nokia and Ericsson took a sensible, Nordic approach and both gave up control; but also united behind a big push for a common GPRS standard. As a result, Nokia and Ericsson are about to end up with over 70% of the global GPRS market; lethally weakening the mobile network units of Siemens, Alcatel and Motorola in the process. The smart thing to do was to give up control, give up stiff licensing fees - just trust on your company's ability to surf the first GPRS wave into a power position. No high licensing fees to alienate competing vendors or operators. This was the Rx for success. Good luck finding a Gorilla enthusiast who saw this coming and realized what was about to happen in the summer of 1999. Tero