Nokia: Wireless Wonder
Page 1 of 1
Several years ago, I purchased the Nokia Communicator. It connected me to the Net; allowed me to check for e-mail; I could set appointments. It was amazing. Unfortunately, I did not use it much. Basically, it was too big to lug around.
Yesterday, Nokia reported its earnings and they were decidedly strong, surging through analysts' expectations. In the past quarter, the company had net profits of $827 million, which was up from $567.2 million the same period a year ago. In fact, Nokia's CEO, Jorma Ollila, believes that his company will show 30 to 40 percent sales increases for 2000.
But, just as has been the case for some time, Nokia will likely beat these numbers. Moreover, the company announced a 4 for 1 split, as well as a 2 million share buy-back.
Another example is an acquisition yesterday of Network Alchemy. The company develops technology to secure Net communications, commerce and collaboration.
However, there are some danger signs. The company has been lagging in the CDMA cell standard, which is the fastest growing market in the US. But there is time for the company to catch-up.
Of course, the market for wireless is soaring. There are expected to be over 1 billion cell users by the end of 2002. There are currently about 480 million users now.
Nokia is the #1 maker of cell phones - sporting 30 percent of the cell global cell market (compared to 23 percent in 1998). The closest competitor is Motorola, with 20 percent.
Actually, with the new wave of mega mergers, it is possible that Nokia may even be a target. Interestingly enough, there is talk that News Corp. will merge with the company.
Regardless of this, the fact is that Nokia is the dominant player in the wireless world. It's a blue-chip that should continue to provide investors a nice way to play the wireless trend.