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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Art Bechhoefer who wrote (44141)	1/11/2005 1:13:07 PM
From: Eric L	Respond to of 196536

Nokia R&D Streamlining Art, << Nokia is cutting about 250 R&D jobs worldwide in order to improve their profit margins. One result may be that Nokia will buy more CDMA chips from outside sources, including QCOM. Any comments? >> It would be something of a stretch to associate these anticipated cuts in the multimedia division that will keep overall R&D employees under 20,000, with mobile device chipset development activities. The 250 to 400 R&D staffers that will be cut are in the Multimedia unit headed by Anssi Vanjoki (with R&D charged to his unit) and were associated with the development of imaging accessories (imagewear) that have been a marginal contributor to top or bottom line. Cuts will be made primarily in Finland (250) and Germany (a "few hundred). Multimedia will coincidentally be adding production staff this year in a similar amount to the R&D reduction in Finland. While Nokia is stating that the move is not intended to transfer R&D costs to regions where employment costs are lower, you should note that Nokia has been ramping R&D staff this year in both India and China and the CDMA development units of same. Draw your own conclusions from that. Nokia's stated objective is to reduce the R&D spend to 9% to 10% of sales. If you have listened to Pertti Korhonen (CTO), or Rick Simonson (CFO) speak on the subject of R&D streamlining or R&D spend, you will know that in house chipset development for mobile devices is not an activity where they plan to reduce spend. From 1998 to 2002 Nokia's R&D spend was 8½% to 10¼% of sales. It bumped up to 13% in 2003 but that year it included a restructuring charge without which R&D would have been 11.2%. 2004 R&D will probably end up in the 11% to 12% range (~$4 Billion USD) this year. At the end of 2003 Nokia had 19,850 of its 51,400 employees engaged in R&D. Slide 4 here from November breaks down graphically how Nokia R&D was allocated across product portfolios in 2004, slide 5 compares that to its peer group, and slide 6 depicts historical R&D spend. tinyurl.com Best, - Eric -