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To: Bill Harmond who wrote (145084)	8/9/2002 12:42:56 AM
From: GST	Read Replies (2) \| Respond to of 164684

Companies like Nokia are not primarily manufacturing companies -- that is not their strength -- they are world class technology and product design companies and they increasingly outsource their production to EMS companies that are much better at doing the manufacturing -- this is hardly news but I bring it to your attention as you seem unaware of it: <<On the cutting edge of European technology Euromoney; London; Jan 2001; Roger Wessman; Heikki Savela; Supplement: The 2001 Guide to The Nordic Region Start Page: 8-9 ISSN: 00142433 Subject Terms: Telecommunications industry Abstract: The Nordic region is a leader in several of the hottest technology sectors today. Mobile communication giants Nokia and Ericsson are leading the charge and around these companies a cluster of smaller companies has also developed. Even in unrelated sectors, such as internet security, Nordic companies are on the cutting edge. Looking for the future success stories, eyes have turned to Nordic start-ups that focus on the mobile internet and all of the countless new opportunities that it provides. Full Text: Copyright Euromoney Institutional Investor PLC Jan 2001 [Headnote] The Nordic region is a leader in several of the hottest technology sectors today. Mobile communication giants Nokia and Ericsson are leading the charge and around these companies a cluster of smaller companies has also developed. Even in unrelated sectors, such as internet security, Nordic [Headnote] companies are on the cutting edge. Technology shares have been on an even wilder roller coaster ride in the Nordic region than in the rest of the world as the euphoria of last winter has been replaced by disillusionment. The question now asked is was it all just hype? A sober assessment shows that while stock market valuations may rise and fall, there is solid strength in the Nordic technology sector. The Nordic region can boast an impressive list of global market leaders in rapidly growing sectors. The main torchbearers are, of course, telecom giants Nokia and Ericsson, but in their footsteps a cluster of smaller companies are excelling in their own fields. The strength of the Nordic technology sector is supported by the combination of a highly educated workforce and consumers that are eager to adopt new technologies. Internet penetration and mobile phone usage are both higher in the Nordic region than almost anywhere else in the world, which has helped Nordic companies to remain a step ahead. The success of companies like Nokia also inspires entrepreneurs in other IT sectors and gives them the courage to reach for the sky. Above all, it helps start-ups to find funding and thereby helps the growth of IT companies in the region, even in sectors not closely connected to the telecom sector. Mobile giants lead the way Given their prestige as two of the largest companies in Europe, Nokia and Ericsson are capable of assuring that the Nordic region is a focal point for technology investors. Nokia is the undisputed global leader in mobile handsets while Ericsson dominates the mobile networks. As global mobile phone penetration is already high, we are witnessing an inevitable slowdown in handset volume growth. However, as handsets evolve into more complex personal trusted devices, there are still ample growth opportunities. Meanwhile, the shift to so-- called third-generation (3G) networks (the true mobile internet) means that the growth in network equipment sales is simultaneously accelerating. Additionally, both Ericsson and Nokia are well positioned to increase their global market shares on the network side. The transition to 3G is beginning in Europe where the market shares of these two companies are highest, thus helping the Nordic manufacturers to move further ahead of the competition. A number of subcontractors benefit from the strong growth of Nokia and Ericsson. For example, Electronic Manufacturing Services (EMS) companies are able to grow even faster than Nokia and Ericsson who are increasingly outsourcing their manufacturing. Ericsson, in particular, is trying to solve the problems in its handset division by outsourcing production, thus providing growth opportunities for such companies as the Finnish-based Elcoteq. The subcontractors have also followed their customers abroad and have become multinational companies in their own right. In addition to EMS companies, various other component manufacturers are building up cutting- edge expertise with Nokia and Ericsson as important customers. Precision-moulded plastics (Perlos, Eimo and Nolato) is one segment where Nordic companies have become predominant. The manufacturers also need automated production lines, helping to speed the rapid growth of Finnish automation systems companies PMJ and JOT. Securing digital lives Nordic software vendors have been at the forefront of information security and, in spite of their relatively small size, have achieved global recognition comparable to the mobile giants. The foundation for these companies lies in active academic research in Nordic universities, and growth has been helped by favourable legislation towards cryptography and other information security technologies. Today, brands like F-Secure, StoneBeat, SmartTrust and SSH are known to IT specialists all over the world and, in particular, the US presence of Nordic security vendors has strengthened. As viruses and other threats proliferate, companies increasingly see information security as a vital part of their business. The Nordic companies are prepared to take a lion's share of the resulting security markets. Internet consulting was one of the first internet sectors in the Nordic region to catch wide investor interest. However, the galloping expectations on the growth of these internet builders have been subdued this year. The end of dot com fever and, in particular, the weak demand for IT services in general have been painfully felt in the sector. Still, the specialized consultants continue to steal market share from traditional IT services giants. Many of the Nordic companies have established a presence across Europe and beyond, and are ready to continue expanding when the demand recovers. All eyes on mobility Looking for the future success stories, eyes have turned to Nordic start-ups that focus on the mobile internet and all of the countless new opportunities that it provides. For example, infrastructure software is hastily being built to enable mobility in different applications. Products that specialize in extracting location information from the mobile networks or executing mobile payments are expected to be in great demand in only a few years. Nordic mobile portals and mobile content providers are popping up in vast numbers. In sharp contrast to the wireline dot com world, the mobile handset users are accustomed to actually paying for the value-added services they receive with their phone. A good example of how to benefit from this comes from Jippii Group. Originally a Finnish ISP, today Jippii is a successful seller of content such as ringing tones to mobile phones across Europe and is adept at combining mobile and internet activity into a unified concept. Mobile entertainment (such as games) is a market with huge potential for new entrants.