He says you should dump Nokia. Why? Because of comments made by TI. Cramer you are a dumb ass! Sorry cannot put it simpler. Cramer do you ever bother to do some basic research on companies? I have a love hate relationship with you, but the more I watch you the more I see that you are a trend trader and not value investor. So quit the act, ok?
Cramer says that Nokia is feeling the heat from Apple, and Motorola. LOL, yeah whatever Cramer. That’s like saying Toyota is feeling the heat from Porsche and Ford.
First is TI talking about Nokia? Probably yes!
Second does this mean Nokia is having problems? No!
Nokia is embarking on a program to cut costs and make things more efficient. For example they just closed a manufacturing facility in Germany. They closed the facility because the German plant cost too much. The German government is infuriated and it made me wonder what Nokia is up to.
What I found out and why I am bullish on Nokia is that they are planning a major offensive in emerging countries with the post of China being an example.
Der finnische Nokia-Konzern soll in diesem Jahr Handys im Wert von umgerechnet 1,3 Milliarden Euro (2 Milliarden US-Dollar) an den Telecom-Konzern China Postel liefern. Wie Nokia heute in Helsinki mitteilte, ist die komplette Abwicklung für 2008 vorgesehen.
This means that Nokia is going to sell to China Postel 2 billion dollars worth of phones. Will these phones be 3G? Probably not, but this is what Nokia understands. Nokia from what I am seeing is embarking on being the number 1 provider in lower cost phones. The reality is that 3G has not made a major dent for anybody. People don’t care about 3G, its a checkbox.
Let me illustrate the 3G issue with the iPhone. You have to ask yourself why Apple still does not have a 3G phone. Could it be that it does not matter? Remember this is Apple the first with BlueTooth, SCSI and the likes. Yet the iPhone has no 3G. Though the iPhone has WiFi, and that should make you wonder. Nokia has WiFi as well, so Apple and Nokia are on the same page. Though for companies like TI who specialize on chips for 3G they are basically buggered.
Though, what about TI? Why would TI make such a comment? When companies make such outbursts you have to ask why they did what they did. After all TI did diss their main customer, which generally companies don’t do. What if Nokia is streamlining its 3G? What if Nokia has other plans?
Wireless handset market leader Nokia is to transfer part of its chipset development operation for an undisclosed sum to STMicroelectronics, in a far reaching shake-up of its semiconductor supply chain, designed to secure lower prices and boost its own license revenue from other handset vendors.
Around 200 of its employees in Finland and the UK will move over to STMicro in the fourth quarter of this year as part of a deal that will see the Franco-Italian chipmaker design and manufacture 3G chipsets for the first time based on Nokia’s modem technologies, energy management and RF technology.
Apart from supplying the chipsets to Nokia, STMicro would be free to offer the 3G high-speed packet access chipsets to open market.
Nokia will retain the development of its modem technology, for WCDMA/GSM and its evolution. But again it will license this technology to its chipset manufacturers, not only for its own use but also for the open market.
Hmm, is that not interesting. Nokia is getting out of the chipset business, and outsourcing it to other clients. Could this be because Nokia knows that the chipset business is a dud? That the margins in chips is extremely tight? I am very sure Nokia knows this and played hard ball with TI. TI balked and Nokia probably told them to take a hike.
Cramer is also making the smart phone market more important than it is. Surf to either Nokia, Sony-Ericsson, or Samsung and look at the mobile phones collection. The common theme is photo’s, music, and chique. Smart phones is only a single aspect and not the most popular.
My point is that yes Nokia knows the business is tough, but from a value investors perspective the question you need to ask yourself is Nokia doing something about this? And that is a definite yes.
Update: Following crossed the newswire:
Finnish firms’ profits beat forecasts in Q4 -data
HELSINKI, March 14 (Reuters) – Finnish companies’ operating profit in October through December on average beat analysts’ forecasts, with cellphone maker Nokia Oyj and steel group Outokumpu Oyj posting the biggest positive surprises, data showed on Friday.
Operating profit on average rose 13.9 percent in the quarter from a year earlier, compared with the decline of 4.6 percent which analysts had expected for the 29 listed companies on which Reuters publishes polls.
Finnish companies’ revenue grew on average 12.8 percent, 1 percentage point higher than analysts had predicted, the data from Inquiry Financial Intelligence showed.
Nokia trumped expectations thanks to the booming cellphone demand in emerging markets, beating analysts’ average forecast by 45 percent.
Stainless steel maker Outokumpu posted a fourth-quarter operating profit of 15 million euros while analysts’ had forecast a loss.
Out of the 29 companies, operating profit in 15 increased more than analysts had forecast, while 13 fell short of expectations.
Electronics contract manufacturer Elcoteq’s operating profit missed expectations by most, as it dropped 15 million euros deeper into the red than had been forecast.
Other firms that clearly missed forecasts were loss-making fine paper maker M-real , which was hit by the weak dollar and sluggish paper prices, and steel maker Rautaruukki , which blamed strikes and higher costs. (Reporting by Sami Torma; Editing by David Holmes) (([email protected]; +358-9-6805-0243; Reuters Messaging: [email protected]))
Keywords: FINLAND PROFITS/