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To: tero kuittinen who wrote (9227)	2/15/2001 11:04:32 AM
From: slacker711	of 33104

I haven't noticed anyone worrying about how Asian vendors got shut out of the initial AT&T's GSM overlay handset order. This is a fairly big deal - considering the number of follow-up TDMA-GSM flips. I'm still not sure that the TDMA-GSM flips are in the best interests of Nokia's mobile phone division. It seems pretty clear to me that Nokia has a much higher marketshare in TDMA than they do in GSM. Like Qualcomm, T's decision is good but not the best of all possible worlds. Eric is right that the continued growth (this year) of Nokia's handset division is going to depend on increased sales in CDMA and the general uptake of GPRS. It looks like a slowdown in GSM upgrade sales are what is currently hurting the industry. Of course, I like Nokia's strategy....put everybody else out of business <g>. Poor MOT/ERICY....if this slowdown hurts Nokia it is going to kill these two companies. Slacker

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To: slacker711 who wrote (9228)	2/15/2001 11:39:01 AM
From: tero kuittinen	of 33104

I don't think there was any chance for TDMA to keep on trucking - the lack of data features is just too bad a drag in the future. So it was a matter of which upgrade there was going to be - and the GSM option is better than some I could think of. As far as handset sales are concerned - I guess much depends on how the TDMA transition is handled. If TDMA/GSM hybrids are both difficult to execute (which seems likely) and something that operators very much want to shift their subs into (which also seems like a good bet) - then that replacement market is going to be pretty big deal. The GSM market is so big that grabbing even 30% of the CDMA market won't be enough to make up for the shortfall if it stalls. But the comment about "GSM" slowdown is a bit rich, slacker.... I bet you felt a twinge of guilt when you wrote that sentence. Tero

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To: tero kuittinen who wrote (9229)	2/15/2001 11:51:47 AM
From: slacker711	of 33104

The GSM market is so big that grabbing even 30% of the CDMA market won't be enough to make up for the shortfall if it stalls. But the comment about "GSM" slowdown is a bit rich, slacker.... I think you are going to have quote me better....I stated the GSM upgrade market has slowed. The data seems to back me up. I believe that the total number of GSM subs was above forecast but the total sales were below. It seems like a reasonable conclusion that upgrade sales didnt live up to industry forecasts. I think that this was due to the lack of killer feature for the upgrade market over the Christmas holiday season. Hopefully, GPRS, color screens and position location can help to turn that around this year. Picking up share in CDMA would definitely help Nokia make it's sales forecasts. Afterall, we are only talking about a delta of 20m handsets or so between a good year and a mediocre year. If Nokia came out with a competitive CDMA offering during the first half of this year (the 6185i doesnt count) they could make up a pretty good portion of those 20m in CDMA. Hmmm...hadnt thought about GSM/TDMA handsets. That would definitely provide a barrier to entry if Nokia can succeed in mass producing those types of handsets. Slacker

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To: tero kuittinen who wrote (9231)	2/15/2001 12:36:40 PM
From: slacker711	of 33104

I don't understand what the 4Q expectations were. I thought that Nokia's 58% phone sales growth was exactly as expected. I didn't see any 8200 or 3300 upgrade slow-down during the Xmas quarter. Was the consensus expectation really 70%? If so, how come nobody told me? Someone missed somewhere....coming into the 4th quarter industry expecations were for around a 420m unit year (if memory serves, MOT, TI and ERICY all endorsed this number). Nokia announced that total sales for the year ended up were 405m units. The 15m unit discrepancy was not over the entire year but just in the 4th Q. This represents a miss of over 10% during the Christmas selling season. Considering the fact that most GSM operators made their subscriber numbers I can only conclude that upgrade sales were lower than expected. None of this means that Nokia didnt have a good year....but I think the above numbers constitute a "4Q slowdown" for the industry. How else can you interpret it? Slacker

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To: Mark Marcellus who wrote (9233)	2/15/2001 1:05:29 PM
From: tero kuittinen	of 33104

It's real vulgar to look at the stock price. Especially now. But if we did, we would see a P/E ratio below 25 for 2002 - if things stay on track. Furthermore, if we compared that to Coca-Cola's P/E ratio, things would get way vulgar. So obviously there is considerable fear that things will go badly wrong pretty soon. Focus on 3G is just dandy - especially now that Lucent's ability to use vendor-financing to land new orders could be seen as severely limited. I think it's fair to assume that 80% of the GSM operators will place their 3G orders with their GPRS vendors. It's noteworthy that Nokia now has about 40% of the global GPRS order base, as opposed to the company's 10% global infra market share from early 2000. Tero

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To: slacker711 who wrote (9232)	2/15/2001 1:11:23 PM
From: Eric L	of 33104

Slacker, << I think the above numbers constitute a "4Q slowdown" for the industry. How else can you interpret it? >> No other way. Jorma commented on that at earnings time .... "First there is the issue of the economy. There is a slowdown that started 2nd week of December in the US and some slowdown elsewhere but really its the US we are talking about and it was very clearly seen in the US in December and continues to be seen in January and impacts orders for 1st Q but also there is some slow down in rest of the world ... " << Someone missed somewhere....coming into the 4th quarter industry expecations were for around a 420m unit year (if memory serves, MOT, TI and ERICY all endorsed this number) >> It is noteworthy that Nokia did not, BUT, Nokia came up short of analysts expectations for them. A few million more handset shipments for Nokia could have made a big difference. They were fortunate to squeeze out a few million 5185i's. - Eric -

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To: tero kuittinen who wrote (9234)	2/15/2001 1:34:16 PM
From: Eric L	of 33104

Tero, << I thought that CDMA sales were short about 10 million units last year. Which explains most of the industry-wide shortfall. I'm calling Eric as a witness. >> Well, I haven't seen the final numbers, but if they come in about 60 million for CY00 as I expect they will, then Irwin Jacobs missed his forecast by ... 10 million. "Jacobs said the figures could even end up being higher than the 70 million forecast:: it.fairfax.com.au Of course, anyone with half a brain (Ed Snyder qualifies) backed down that number to 60 million last June. Meantime we have Robert Stozek of Motorola prognosticating for the industry again: >> Handset Market To Grow Up To 40 Percent This Year 02/06/01 Mark LaPedus Semiconductor Business News Motorola has projected that the worldwide wireless handset market will grow 30 to 40 percent in 2001, thanks in part to a pickup in demand for new data services, like third-generation (3G) networks. In total, the wireless handset market in 2001 is projected to reach 525 million to 575 million units, said Robert Stozek, director of the Advanced Network Product Group at Motorola, Schaumburg, Ill. He estimated unit shipments at 410 million to 420 million in 2000. "Our projections are on the low side of 500 million units for 2000," said Stozek in an interview after his presentation at the Banc of America Securities conference in San Francisco on Tuesday. "Nokia and Ericsson are projecting between 500 to 550 million units. We are all converging on [a consensus of] 525 million units." << - Eric -

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