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

To: DaveMG who wrote (1770)	4/15/1999 9:49:00 AM
From: tero kuittinen	Read Replies (1) \| Respond to of 34857

After Dataquest announced that Qualcomm's US digital handset market share nearly halved in 1998 Qualcomm people specifically stated that the company did not lose share. Draw your own conclusions about that. If you want to define all phones using Qualcomm chipsets as Qualcomm phones, that's just fine. Even using this distinction Qulacomm is losing ground every month. How do you explain Qualcomm's sales growth during last quarter, anyway? If CDMA phone sales are growing over 100% a year how can Qualcomm's overall sales growth be so weak? The most reasonable explanation is extensive market share losses. I know that rapidly expanding market tends to mask market share losses and hide the way certain companies are ceding ground. That is precisely what happened to Motorola between 1992-1996. As long as Motorola's sales grew briskly Wall Street did not care that the company was steadily losing share. But there comes a point, sometimes suddenly, when market share losses finally translate into plunging profits. Ericsson's 1998 performance shows how a company can enjoy brisk sales with an aging product line-up. During 1Q of 1998 Ericsson enjoyed 80% mobile phone sales growth on a year-to-year basis. When I pointed out that the handsets seem outdated and that Ericsson appears vulnerable if they don't bring out several new models soon, most people just brushed that off. It took less than six months for that 80% growth to drop to zero. Wall Street has a horrible track record in anticipating sales growth patterns in this industry - people there don't seem to pay any attention to handset competitiveness issues. Qualcomm's current line-up is an passable replica of Ericsson's at the start of 1998. Half a dozen models that are all growing obsolete. Thin Phone will not salvage that mess - the range of new, reasonably priced models should be far wider. Where are the 100-300 dollar models aimed at teenagers, women, executives, etc? There is no segmentation strategy. This was what sunk Ericsson in 1998. I'd take a hard look at the Iridium saga before pinning your hopes on Globalstar. Tero