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

To: Maurice Winn who wrote (749)	7/14/1998 9:52:00 AM
From: tcd	Respond to of 34857

in your profit ratings between NOKA and Qualc, did you factor in the Nokia split? if so, noka is at least on par with Qualc.

To: Maurice Winn who wrote (749)	7/14/1998 10:51:00 AM
From: BOGEY	Read Replies (2) \| Respond to of 34857

Maurice...You didn't take into account Nokia's stock splits...Nokia has more than doubled just since Dec 1997, not the last three years...I bought Nokia about three months after it became an ADR on the NYSE at $66 after an already nice runup...It has split twice since then...So as you can see Nokia had a much better run than you indicated....Regards....

To: Maurice Winn who wrote (749)	7/15/1998 10:58:00 AM
From: tero kuittinen	Read Replies (4) \| Respond to of 34857

Maurice, Nokia's value has increased by more than 40-fold since 1991. During the crucial early years the company clocked in steady 100% profit increases year by year. Qualcomm is now at this stage and I'm not seeing 100% profit growth, to put it mildly. There is a huge disadvantage in entering the digital phone market over half a decade after it has been created. You know, the current efforts of the American CDMA lobby in painting GSM as a "European" standard are ringing more and more hollow. China is now world's number one GSM market with nearly 10 million GSM subscribers. Nokia's production volumes in Chinese factories are now in several million units annually. I can't wait to see the CDMA launch if it ever happens. Just how will they attack entrenched competition with good name recognition, strong backing from Chinese government, superior products, country-wide distribution networks and huge volumes? What is wrong with the Chinese CDMA launch anyway? This country has now more digital phone users than USA and CDMA still has no national presence. As you well know, CDMA is not "replacing" GSM in Australia as you claimed. It is trying to challenge the GSM operation of Optus, one of the most successful GSM operators in the world. Nokia has already launched both 5100 and 6100 in Australia to rave reviews. They are pushing 8810 and 9110 there by autumn. Four -98 models covering all market segments and incorporating EFR technology that gives as good voice quality as CDMA. Production volumes for these models are far higher than for any of the CDMA models that will challenge them: CDMA cannot compete on price. They hardly can compete on quality, either: where's a CDMA model that offers a week's stand-by time under 170 grams? Or two hours of talk time under 120 grams? Or has a dynamic display with five lines of text in the cheapest available model there? In 1996 the value of digital phone sales in USA was less than 1 billion dollars. In 2000, it is projected to be nearly 10 billion dollars. The big, crucial expansion is taking place right now, in 1998. And what's the CDMA situation? The biggest American brand, Motorola, has not even brought a model to market. Nokia offers five times longer stand-by times in its GSM and TDMA models than in its CDMA phones, while the weight of these models is 20-30% lower. Qualcomm's only high-end model, Q-phone, flopped. And was then recalled from market after quality problems. The currently selling Qualcomm models are big, heavy and have short stand-by times. And wasn't the new version of Q-phone supposed to be launched in July? When will there be a CDMA phone with up-to-date technology and high production volumes? The lesson American consumers are now learning is this: CDMA phones are big, heavy and technologically challenged, big brands are not focused on them and choice of models is very limited. The concept models of 70-gram CDMA phones or CDMA smartphones remain a mirage, hitting the US market maybe in late -99, maybe in the next millennium. Somebody adviced me to give Qualcomm some time, they will work out their problems. Here's my view: the time is out. China has already ran away, US market is being seduced by Nokia's innovative 6120, 6160 and 6190 models. The CDMA cannot prospere merely on promises of a brighter dawn somewhere in the future. Qualcomm promised American operators superior technology when it lured them into opting for CDMA. Now the marketplace is seeing the result of this illusion of "more choice". USA has four viable, digital technologies selling in millions of units: GSM, TDMA, iDEN and CDMA. Consumers are upset about spotty coverage, lack of roaming and restricted choice of models in every standard. The US market for cellular phone is now smaller than Europe's... and the sales growth in Europe is at least 10% higher than in USA. The fragmented, confused, low-quality coverage of all standards in USA stands in stark contrast to continent-wide single standard fueling hot European sales growth. And that much-vaunted "choice"? Walk into a store in USA, pick an operator and ask for phones. You typically get 2-3 models to choose between. With Nextel, it's only Motorola, with some CDMA operators it's either Qualcomm or Sony. Fat choice. Do the same in Europe or Asia and you can choose between 20-30 models. 3-4 smartphone solutions, 4-5 phones at 100 grams, 2 models with color displays, 2 models with voice dialing, 2 models with in-built recorder, etc, etc. The choice and variety is dizzying. Who's got the real choice? Who's got the sales growth of 45% to prove that the free market system is operating correctly? Who's got the world's only two genuinely profitable handset manufacturers? The lackluster 25-30% sales growth in USA (figures: the latest Businessweek) is proving my point: fragmenting the marketplace was a massive mistake. It drove the leading American manufacturer, Motorola, into ground, destroyed Nextel's handset division and forced Lucent to give up the control of it's own mobile phone unit. And what do Americans get in exchange for seeing their companies forced out of the hottest-growing high-tech business around? A disastrously divided digital phone market. You're free to hope that Australia, China and other countries will emulate this example. But I really doubt that. Time will tell what happens with W-CDMA. But from pure profit point-of-view, Nokia is not going to need that for 4-5 years to sustain its 30-40% annual profit growth. And since Japan is the moving force behind W-CDMA, not the Europeans, I strongly belive they will find a way to make it work. They have invested too much in it already to give it up. It's their only shot at getting access to the lucrative European market and they will force it through even if they have to redesign it to circumvent Qualcomm's patent claims. Tero