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

To: dougjn who wrote (649)	5/31/1998 12:14:00 PM
From: tero kuittinen	Read Replies (1) \| Respond to of 34857

Hi doug, I think you'll get your wish. With the current maelstrom of bad news sucking down Asian economies I wouldn't be surprised to see Nokia down by 20-30% by next fall. I've been contemplating selling Nokia now and buying it back in a couple of months. The problem is, second and third quarter earnings should be massive... Nokia is finally getting the benefits of a major make-over of its product line and gaining market share substantially in USA and China. So it's impossible to say whether the Asian problems will outweigh that to the extent that the stock would slide substantially. US investors have been traditionally skittish about Nokia, dumping it as soon as panic selling in tech sector starts, so it could get really volatile this summer. If only I knew whether it's wise to buy before second quarter results or wait until Asia has brought down tech prices all around. Alcatel is a solid company, but I really disagree with their decision to pour big bucks into mobile phone R&D. The company has no presence in Asia or USA in handset biz and even in Europe it suffers from low name recognition outside francophone countries. It's getting buried by Nokia, Ericsson, Siemens and Sony in tech magazine product reviews. I just don't believe in regional mobile phone companies. Check out: beli.vet.auth.gr and you'll see the problem. Many of the models have outdated display or battery technology, are big and lumpy and/or weigh too much. Yet the company is devoted to pumping out a plethora of new products. If Lucent with its technological wizardry and Philips with its considerable consumer savvy couldn't make their handset efforts take off, I seriously doubt that Alcatel has better prospects. When PC market was young, it seemed that a dozen companies were prospering. Only Dell and Compaq are really thriving now. The rest were hamstrung by their small market share and limited global appeal. I think only two or three mobile phone companies will be truly successful in four years and Alcatel has virtually no chances of being one of them. In this light, I question their strategy of trying to muscle in just because everybody else is doing the same. They have had a great stock performance and Alcatel was a great buy in 1997. But they don't have the size to matter in either handset or infrastructure markets and I don't believe it pays off to invest in a number five or number six company in these intensely competitive fields in the long run unless the company in question has some lucrative niche to occupy. regards, Tero