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

To: mozek who wrote (1834)	4/29/1999 6:48:00 AM
From: tero kuittinen	Read Replies (2) \| Respond to of 34857

I wouldn't buy Nokia now. The network sales growth is apparently slumping during 2Q and that is coinciding with year's weakest quarter for handsets - new models won't have a big impact until the second half. Nokia has a couple of new models in the pipeline and the momentum towards Xmas should be good. We might have a sizable correction before then. When China Telecom's break-up to four GSM operators is finished and these companies are opened to foreign investment the sales there should pick up new speed. The GSM subscriber growth in Europe and China is still beating forecasts, so the underlying growth is very healthy. In any case when the tech stocks start slumping I'd rather be owning a company with Nokia's current growth than something propped up by mainly future expectations. Ericsson looks set to have a disastrous 2Q phone sales, the contraction might be around 15%. I doubt that the network sales can pick up that much slack. Nortel seems wimpy and sluggish - apparently they are unable to keep pace with Lucent. I'm not sure how many quarters of 24% sales growth in handsets and chipsets Qualcomm can put in before people start asking pointed questions about market share. We'll see. Sony, Samsung, NEC and Matsushita are all now trying to make an abrupt U-turn and move more resources into GSM phone development in anticipation of W-CDMA sales. A day late and a dollar short; their emphasis on CDMA has done plenty of damage. They are all bit players in China and Europe and remain stuck with stagnant global market shares in single digits. Sony just reported a 50% price erosion in handsets. It looks like buying opportunities all around by summer. Nevertheless, the W-CDMA news are very good. NTT-Docomo is going full speed ahead, Korea's biggest IS-95 operator is starting a W-CDMA collaboration with Nokia, British Telecom is co-operating with Japan Telecom, Singapore and Hong Kong are ramping up their GPRS projects as a stepping stone to W-CDMA. Nokia was chosen to be a W-CDMA handset partner of NTT-Docomo way back in 1997 - this company has probably had a tighter focus on W-CDMA handsets than any other manufacturer for years. Meanwhile, Motorola was still backing the Alcatel/Siemens standard proposal last year. All these companies have now switched to developing W-CDMA, but they are in the starting blocks. Siemens recently started a W-CDMA handset collaboration with the Japanese to catch up, but the track record of these handset joint ventures is littered with roadkill like Philips and Lucent. Lucent and Nortel have split their R&D between cdma2000 and W-CDMA, which is starting to look like a shaky strategy from a global perspective. Lucent has the money and brainpower to survive a couple of blunders - I doubt Nortel does. Tero