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

To: Frederick Smart who wrote (541)	2/14/1998 11:04:00 AM
From: tero kuittinen	Read Replies (2) \| Respond to of 34857

Wow. I'm impressed. Loiri is really a Finnish icon... kinda like a Nordic Dean Martin; singer/actor with a still loyal following from his 70's heyday. I'm sorry my moles in Nokia are working stiffs with no connections or future prospects (yes, I'm denigrating you... thanks for the fourth quarter "tips") so I doubt they can help you. I'd definitely mention the Vesa Matti connection when you contact Nokia! The Finnish economic journalists are in their usual post-coital bliss after the fourth quarter results. China climbing to number three customer slot has received some interest. Ericsson currently has an iron grip of Chinese market with a 50% market share there so it's good to see Nokia mounting a credible offense. Actually Chinese sales were only marginally lower than the US sales, so it's expected that China could be Nokia's number one overall export destination in 1998. Ollila was evasive and circumspect in the best Bill C. tradition when he was asked who's number one in the world in digital phones, so it appears that Ericsson has overtaken Nokia already in 1997. Nokia's overall share of world handheld market was satisfactory 21%. If Ericsson really topped that Motorola might be already below 20%; Philips has clawed its way to 5% despite of early bad press and Sony should be even bigger. This was Ericsson's peak of the product cycle. Now Nokia has a new generation of phones in the market and Ericsson's line-up is starting to look a little dated. They got the 788 to the US market only now, so Nokia's 6000 models are competing there with a previous generation technology. Nokia has been unusually hype-prone in its descriptions of the 6000 model sales and profit margins, so there are now huge expectations built into the stock price. Would even 40% growth rate in the second quarter be enough? Nokia has to top at least that to start reclaiming the lost market share, which evidently peaked at 23-24% roughly a year ago. Once again, the infrastructure results were a source of nationalistic pride. Ericsson lost the number one position to Nokia in the 1800 GSM network sales. This is important, because most of the new GSM network sales are in this category. Nokia targeted this standard some time ago and is now world's leading manufacturer, helping it to close in on Ericsson in the overall GSM infrastructure market, of which the 900 GSM still makes a healthy proportion. An important factoid is Nokia's infrastructure profits now topping the mobile phone profits for the first time. From the profit generation point of view, Nokia can now be regarded as chiefly an infrastructure company. This should give pause to people shying away from handset companies because of the volatility problems. Profit margin slide in infrastructure sector was slight. Actually, the margins are the story in all three Nokia's sectors; handsets, infrastructur and Other. Often ignored is that last mysterious component, which includes the digital set top boxes. Sales growth here was brisk indeed, and it looks like it will transform the company into a three-legged creature in the near-future. Gates is interested in Other, because Nokia's standard looks to be set to become Europe's de facto set top box standard, thanks monster orders to the German-speaking countries. It was interesting to hear that Nokia intends to introduce "several" new products based on the Nokia 9000 smartphone technology. Could this include the Nokia Java smartphone touted by Sun? Will they shrink the 9000 box, which is kind of hefty for a phone? It looks like Nokia is serious about expanding the internet mobile phone from a niche product into a mainstream phone. They still are the only company with a full qwerty keyboard in the mobile phone. I still believe in the market reseacrh showing consumer resistance against using anything else than qwerty to exchange e-mail and faxes. Interesting to see how the competing touch-screen products will do. Tero