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

To: elmatador who wrote (3981)	6/20/2006 11:41:50 AM
From: Eric L	Read Replies (3) \| Respond to of 9255

Ericsson & Nokia Siemens Networks: The New GSM/WCDMA Infrastructure Duopoly Nokia Siemens builds scale materially in GSM and WCDMA. The scale gain in mobile is significant however, and the combined entity’s 32% share for GSM/WCDMA is only just behind Ericsson’s 38%. More importantly still, the 3rd placed player (Alcatel/Lucent) has just 10% for GSM/WCDMA with a strong GSM business obscuring a weak WCDMA share of just 4%. In effect, the GSM/WCDMA market could start to take on duopoly characteristics, although we suspect that Asian vendors will remain competitive and that further M&A among smaller players is a possibility. - Lehman Brothers - Dell'Oro credits Ericsson and the new Nokia Siemens Networks entity with ~70% share in GSM infrastructure and ~64% in WCDMA with 70% share in the overall GSM/3GSM market ... GSM/WCDMA Wireless Equipment Market Share Revenue in 2005 · GSM WCDMA Total ===== ===== ===== Ericsson 39% 33% 38% Nokia/Siemens 31% 33% 32% Alcatel/Lucent 11% 4% 10% Nortel Networks 7% 7% 5% Motorola 7% <1% 5% Other 5% 23% 10% · Source: Dell'Oro Group (via Lehman Brothers 6/20/2006) Dell'Oro places Nokia as number 2 in GSM infrastructure revenue in 2005 at ~17% share with Siemens at ~15% and they also have Nokia at number 2 in WCDMA with ~18% share v. number 3 Siemens at ~15%. Wireless Infrastructure Revenue Market Shares for Nokia, Siemens, and JV · Siemens Nokia Combined ======= ===== ======== GSM 15% 17% 31% WCDMA 15% 18% 33% CDMA 0% 0% 0% Total Wireless 12% 13% 25% · Source: Dell’Oro; Prudential Equity Group, LLC · Wireless Infrastructure Revenue Market Share of the JV (Geographical) · N. America Europe Asia ROW ========== ====== ==== === GSM 32% 31% 33% 29% WCDMA 0% 40% 21% 0% CDMA 0% 0% 0% 0% Total Wireless 11% 33% 23% 25% · Source: Dell’Oro; Prudential Equity Group, LLC · Top Wireless Infrastructure Competitors · Overall GSM W-CDMA ======= ===== ====== Ericsson 30% 39% 33% Nokia+Siemens 25% 31% 33% Alcatel+Lucent 18% 11% 4% Nortel 10% 7% 5% Motorola 8% 6% 0% · Source: Dell’Oro; Prudential Equity Group, LLC The new 50-50 JV combines Nokia's Networks division (EUR 6.6B & 11.4% OM in 05¹) with Siemens’ (EUR 9.2B and 4% OM) carrier related operations for fixed and mobile networks. - Lehman Brothers - Strategically, we feel that the JV is a positive for Nokia as it creates a very strong WCDMA/GSM competitor, owning roughly a third of the market, behind only Ericsson. Siemens reported 3.5% operating margin for its communications business for Fiscal 2005 while Nokia reported 13% for its FY05¹. As of its FY05 filing, Siemens Comm. business had 54,000 employees² with overall revenues of EUR 13.1B, compared to Nokia’s revenues of EUR6.5B for its networks business. We feel it is important to note that Siemens Comm. business also includes its enterprise business, which is not part of the JV. - Prudential - ¹ In 2005 Nokia reported IFRS Nokia Networks sales of €6,557 Billion (~$ 7.8 Billion USD) with operating profit of €855 (~$1.01 Billion USD) -- 13% OM. I'm not sure where Lehman pulled the 11.4% OM but perhaps that is pro forma. ² At year end 2005 Nokia Networks employed 18,332 individuals out of a total of 58,874 employees generating €34,191 ($40.489 Billion USD) net sales, although they employed 32,935 individuals providing 'Common Group Functions' for Networks, Mobile Phones, Multimedia, and Enterprise Solutions so obviously this is not a direct apples to apples comparison to Siemens Comm headcount of 54,000 which includes Enterprise and Modules which stay with their former parent, at least temporarily. Weird ... ... At end of year Nokia reported 58,874 employees with 18,332 in Networks. At end of Q1 Nokia reported 62,763 employees with 19,442 in Nokia Networks. Where the heck did 3,889 employees come from? Certainly not Intellisync, and I wouldn't think Sanyo employees would be counted. Obviously I'm missing something. nokia.com - Eric -