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

To: Jim Lurgio who wrote (675)	6/6/1998 9:40:00 AM
From: tero kuittinen	Read Replies (2) \| Respond to of 34857

The Decline and Fall of Motorola, Part XXXVII. I guess it had to happen... I've run out of pejorative terms to describe this company. I'm proud of my vocabulary, but in the end Galvin has defeated me. My awe at how badly Mot sucks has moved beyond verbal. So I'll just stick to the facts. Two years ago, when Mot would give a profit warning, Noka would automatically dive as investors panicked at the grave announcements about slow-down in mobile sales. But it seems that the Street has now caught on. As somebody pointed out, now any Mot announcement actually triggers a Nokia buying frenzy as people read between the lines. "Slowing semiconductor sales and a cyclical down-turn in pager sales" are, of course, motspeak warnings about yet another market share dive in handsets and network equipment. The key question here for me is: just how badly is Motorola tanking in the mobile biz right now? Dataquest has already stated that Nokia will surpass Mot as a handset company this year, so presumably an anticipation of a 2-3% market share gain is built into Nokia's current price. Further gains for Nokia probably depend on an even more extensive shift. I don't think that Ericsson is going to give up much ground, even though their models are starting to look clunky, they still have sound technology and outstanding marketing. The small fry like Siemens and Sony have stepped up their product cycles, so taking share there is going to be tough going as well. In the end, creating positive earnings surprises this year may well hinge on how rapidly Mot crumbles. Early signs are good; Mot just debuted its high priced new Startac in Europe, where it has proceeded to lose in product reviews to Siemens, Alcatel and Sony models which cost between 30-50% of the Startac retail price. The Nokia 6100 is presumably a hit in Chinese handset market since they have had to boost production capacity there and Nokia signed two extensive new Chinese distribution deals in January/February. The US market is a question mark, but the third quarter at the latest should give a sign about whether Nokia is extending its -97 winning streak. The euphoria stemming from Mot's warning means that the expectations for Nokia are that much higher... initially projected 40% growth in handset sales this year may not be enough after all. Tero