I hate to beat on a dead horse, but I’m going to do it anyways. Just read through the transcript of the Nokia Q4 2006 Earnings Conference Call, available to you here. It’s a good read, took me 10-15 min. I’m not really a "numbers" guy, so I’ll confess to breezing through most of it.
However, when asked about the US market, Olli-Pekka, in my opinion, doesn’t quite answer the question. Read on for the clip.
Richard Kramer – Arete
Thanks very much. Two simple
questions for Olli-Pekka. The first one two areas that may be should
have been better in ’06 were surely the US market and the enterprise
business. Can you tell us what’s going to change in ’07 to turn both of
those businesses around? Is it a new product portfolio, a new approach
to the markets, a different approach to operator relationships, and may
be give us some sense of what the plan is there, and then may be a
wider question slightly that’s my OPEC about the quarter. But if you
look out for the next two to three quarters, several of your major
competitors are somewhat constrained by the difficulties that they ran
into the backend of last year. How do you approach the competitive
situation in terms of market share and portfolio for the next two to
three, four quarters, is this a chance for you to solidify market share
gains or extend them, do you think there is a chance to put some
specific pressure on some of your competitors, and how much you use
various issues like price and product portfolio in that respect?Olli-Pekka Kallasvuo
Okay,
thank you. I’ll start with the U.S., then enterprise, and then
competition. So, the U.S., obviously, it has been a bit painful and the
market position is really nothing to [proud] for about. At this point
of time, I acknowledge that, but then again we have really taken action
here and I would like to take up three things that are available here.
One, you remember in the summer of last year, we communicated we will
start making US market specific products and we setup an R&D center
in San Diego to do that. That’s a big investment. And the results from
that investment will be visible during the course of this year. The
other important item that is relevant here is what we are doing in
CDMA. Again we may be — in my opinion, even with the insight, even
better this season in the summer to ramp down our own R&D in CDMA
and our own manufacturing and move to a different part a model there,
simply because we were not able to become competitive in that market
and we are — we have been now executing that change in strategy
basically and again once that sayings has been implemented, we believe
we can start ramping up our CDMA position, especially in the US when it
comes to that approach. And the third thing — and I don’t think this
has gotten the — really the attention it would have needed. The third
thing that is relevant here is, we definitely — extremely happy with
the announcement with Sprint to become their systems supplier when it
comes to their WiMAX fourth generation network. And we have at that
point of time also of course very much made it possible for us to enter
as a handset supplier as well with Sprint, as that they will ramp up
there. But as since they — it’s a bit longer term, yes. But
definitely, we will be strategically extremely important and relevant
to our position in the U.S. On the top of these later moves, we are of
course working very actively day-to-day with the career industry and
with the alternate channel, and you know, it’s — that have a lot of
attention there.Then enterprise, it’s very clear that we are
not happy with the situation there. You can see that when you look at
the — look at the [DFL] and it’s very clear that the — we must be
able to make that business profitable. And we did indicate or estimate
in the capital markets today that we will reach breakeven during the
first half of ’07 and that definitely continues to be the plan there.
And here, it’s very clear that we need to intensify many efforts in
that business. And it’s really a question about implementing,
implementing, implementing, and in that conjunction also make some
strategy decisions that we are working on. We remain committed to the
enterprise business and market when we see an opportunity there, then
the competition. So, I think, maybe even implying or indicating
something like that, but this is definitely the time to turn up heat,
slowly, slowly, slowly, turn up the heat and put pressure on
competition. On one hand on a very positive way, like — like investing
in marketing in a very selected way where we feel we can get the
biggest impact, but also on overall basis because we will turn up heat
here. And, I think simply take the benefit of the situation. I think we
can be very competitive and we need to exploit that. (emphasis mine)
Call me a fool, but I don’t really see what they have been doing in terms of "addressing" the US market. I’m harping on this because every other manufacturer besides SE now has a US 3G offering readily available through Cingular (the only US carrier with UMTS 3G), from "dumbphone" to smartphone, and we have NOTHING from Nokia. For shame. With such a high agenda for mobile connectivity, I should hope that we’ll see at THE LEAST 3 devices from Nokia for the US 3G market. One s40, for the "common folk," one s60 N-series, and one s60 E-series. Anything less than this, in my opinion, is unacceptable. What do you think?
