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

To: Eric L who wrote (4697)	3/22/2007 2:21:25 PM
From: slacker711	Respond to of 9255

Comment: I expected Nokia to give back some share after a spectacular Q4. They usually do in Q1. They may pretty much hold share and possibly even see a slight gain. Mix driven margins will be key. I think it is safe to say that Nokia will have gained share during the quarter. While LG and Samsung are doing well, the 5% Motorola share loss leaves room for upside across the board. TI did sort of confirm this in their commentary when they stated that their mix was more dependent on which customers were doing well than on end-markets or geography. I would imagine the higher share of low-end handsets will drop ASP's, but as you say, the margins are going to be the key. Was the surprise last quarter the beginning of a trend? Nokia's earnings statements certainly made it sound like they would have further room on price during the 1st quarter. Slacker

To: Eric L who wrote (4697)	3/26/2007 5:33:09 PM
From: sisuman	Respond to of 9255

Goldman-Sachs views on MOT and NOK. Nokia (ADR) (NOK) Communications Technology Mar 07, 2007 Motorola's retreat supports Nokia's margins, at the expense of ASPs WHAT'S CHANGED: We are reducing our Motorola 2007 market share forecast by 350 bp. Motorola’s CEO confirmed at our Tech Conference last week that the company is pursuing a selective strategy in those emerging markets where its lack of scale and distribution breadth prevent it from making money. The CEO cited Africa and Vietnam as two particular examples where Motorola passed on unprofitable contracts during 1Q, likely benefiting Nokia, the market and margin leader in these regions. Remains Buy. IMPLICATIONS: 1) The fact that the industry no.2 is in retreat underscores our confidence in the sustainability of Nokia’s margins in the mid-term. We expect Nokia to gain share until Motorola’s high-end/3G products are refreshed (likely late 2007 at the earliest), allowing Motorola to contemplate costly investment in distribution without damaging its margins. 2) Modest share losses by Motorola were already factored into our Nokia estimates, so we increase our 1Q unit forecast only modestly to 95 mn (37.3% share) from 93 mn, and our 2007 forecast to 428 mn from 418 mn. 3) Incremental units are coming at low ASPs, leading us to cut our 1Q ASP to €87 (versus the SME Direkt consensus of €90). 4) As we highlighted in our February 23 industry report, ‘A tale of two handset markets’, we believe that Nokia’s scale and distribution reach allow it to dominate c.80% of the emerging markets’ profit pool, earning EBIT margins in line with the group average. Nokia’s incremental share gains therefore affect price, not margins. 5) EPS forecasts rise by €0.02 in 2007 to €1.17; our FY08 forecasts are unchanged. VALUATION: We retain our 12-month, DCF-based price target of €20. Sisuman