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

To: Eric L who wrote (18914)	3/14/2002 11:34:15 AM
From: JohnG	Respond to of 34857

GPRS called a failure so far --Of course, who believes anything fron Street.com or Morningstar's Tod Bernier--accomplished assasins. "John Q. Public isn't out there buying GPRS phones," says Morningstar's Todd Bernier. "Motorola over-promised -- they threw a party and no one showed up." For Motorola, GPRS Turns From Fad to Fade By Tish Williams Senior Writer 03/14/2002 09:22 AM EST Motorola's head start in GPRS isn't panning out. The No. 2 mobile-phone maker touts nine general packet radio service phones in its stable, but it seems that sales have stalled for the 2.5 generation (2.5G) mobile phone. Industry watchers have been pushing off forecasts of a widespread launch of data-friendly, packet-switched GPRS service for the past four quarters, and it seems that time frames still haven't materialized for large-scale service. While U.S. operators like AT&T Wireless roll out a city-by-city GPRS network, there's still little noise in North America or Europe signaling that GPRS is fulfilling its promise as a warmup for 3G. In a Wednesday press release touting new phone capabilities, Motorola announced that it had "sold almost 5 million GPRS handsets to date." Based on shipment numbers from last year, that statement indicates Motorola will likely ship fewer GPRS phones in the first quarter of this year than it did in the third quarter of 2001. Motorola's widely stated goal for the end of 2001 was to ship 5 million phones, a figure it missed and which apparently still remains elusive. "John Q. Public isn't out there buying GPRS phones," says Morningstar's Todd Bernier. "Motorola over-promised -- they threw a party and no one showed up." If that is the case, it should be interesting to see what kind of a first quarter Motorola can whip up. The company already expects a 16% to 18% downturn in the March quarter, giving back the sales gains made in the holiday season. Wall Street estimates peg the drop at 17% to $6 billion in sales. On top of that, Motorola is the likely owner of a couple of weeks in channel inventory disclosed by Nokia at the end of the fourth quarter, said Deutsche Banc Alex. Brown analyst Brian Modoff. He posits that Motorola CDMA phones comprised those two weeks of inventory, which Nokia reported cleared out of the channel on Tuesday. New Phones Keep Coming In Phone rivals Nokia and Sony Ericsson have unveiled a half-dozen phones each in the past two weeks, from combination phone/PDA devices to GPRS models. All three phonemakers expect to roll out 3G phones before the year's end. Meanwhile, analysts such as U.S. Bancorp Piper Jaffray's Bill Crawford look for alternatives to GPRS, such as short messaging services available over older 2G networks. Crawford says three of the top six carriers can work together to send messages from network to network, making the low-tech solution a possible way U.S. callers will first experience data. Carriers will get their revenue, but the high-margin handset dreams of equipment makers won't be fulfilled until 2.5G and 3G networks take off. "This year is not the year to look for significant data revenues," Crawford says. "There's not much of an expectation there. It's reasonable to assume there are going to be delays. If there aren't, it's a pleasant surprise." All of which will be disappointing to Motorola investors, who saw the company thriving in the third quarter of 2001, when Nokia had yet to produce a GPRS phone. Motorola reported that 9% of third-quarter phone sales were GPRS handsets. At that point Motorola had 2.4 million phones on order from more than 20 operators and thought it could double that figure to 5 million with a boffo holiday season. But when Nokia announced plans to launch three GPRS phones before the end of 2001, it seems Motorola's GPRS orders stalled and the company finished up the year with only 4.1 million out the door. Investors heard optimism from Qualcomm that 2.5G CDMA chips with 1X technology are selling like hot cakes, which is another way data services could spread in the U.S. (This in spite of Qualcomm's eternal optimism and the fact that the company sometimes arouses industry skepticism.) Sprint PCS (FON:NYSE - news - commentary - research - analysis) plans to christen its nationwide 1X network midyear if all goes as planned, and competitor Verizon (VZ:NYSE - news - commentary - research - analysis) is following AT&T Wireless' plan with a gradual buildout. But with two weeks left to go in the March quarter, it appears carriers are too busy wrangling with the 2.5G technology and their balance sheets to snap up phones. Wall Street once thought GPRS would begin adding to consumers' average revenue per user figures in 2001. By the end of 2001 that was being forked off until the second half of 2002, and now it's hard to get an estimate for when data will appear. Motorola's hoping it can make do regardless. thestreet.com

To: Eric L who wrote (18914)	3/14/2002 11:43:03 AM
From: elmatador	Respond to of 34857

Six months on and still going to be like this: Message 16383555

To: Eric L who wrote (18914)	3/14/2002 11:46:53 AM
From: Caxton Rhodes	Read Replies (3) \| Respond to of 34857

Eric- You think 18kbs is going to sell data service? While reducing capacity? I seriously doubt it. That is what is so important about the 1X launch in the U.S. The two things to watch are the effect on replacement rates (which isn't happening so far with GPRS) and whether it attracts new subs. 1X has affected replacement phone sales in Korea, and has increased data usage. So far no signs for GPRS. Just because all GSM phones become GPRS available doesn't mean it has any affect on sales. Caxton