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

To: Peter Sherman who wrote (7540)	10/12/2000 9:51:25 PM
From: A.L. Reagan	Read Replies (3) \| Respond to of 34857

NOK is the DELL of the wireless industry, and exactly the same thing is happening here as happened to DELL. The gorilla, price, king classifiers could have a fine time with the DELL and NOK business model and strategic positioning similarities. [Gee, I even wonder if refusing to buy chips from AMD is similar to refusing to buy chips from QCOM] The enormous gains in both the size of the market and market share have slowed. NOK is now fighting a battle to maintain share, and somewhat similar to DELL's forays into servers and storage in the face of slowing box growth, is NOK's emphasis on infra. I actually found the press release trumpeting an infra "win" with some Italian start-up that doesn't even have a license a little disquieting, and wondering whether the infra business is well-suited to NOK's successful h.s. business model. So an argument could be made that NOK and DELL ought to have similar valuation metrics - each can be expected to grow revs and op income around 25% for the next year. DELL's now compressed forward P/E is around 20-22, seems pretty reasonable, NOK's still considerably higher. OTOH, even with reduced forecasts, handset quantities still looking 25% higher for next year versus 15% or so for PC boxes. Although as a long-time Q-holder I'm just as obsessed as the next guy on SI in figuring out strategic positioning w/r/t 3G standards, appears Mr. Market has at best a 12-month outlook in terms of valuing NOK. Again, I think we NOK holders are facing DELL syndrome, and I didn't think it would arrive quite so soon.