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rkscarse
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rkscarse,
User Rank: Light Beer
5/11/2019 | 8:58:41 AM
Re: Time to think again ...
Thanks for the insight Barry. You're piece was so well written, concise, pointed, and fair... at least to my mind, just an investor. 

From my perspective, everything you wrote supported what Suri said, and confirms that you, at least, attest to optimistic elements that don't just derive from hyperbole. 

I shall not hold you responsible for any failing the company might have in turning that optimism into results, but, still, I gain a confidence from what you wrote that leads me to believe today's value is woefully too little to represent Nokia's potential during the next, say, 18 months or so.

regards,

rks

 

 
barry.french
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barry.french,
User Rank: Lightning
5/7/2019 | 5:31:17 PM
Time to think again ...
I am a big fan of Light Reading and always appreciate the punchy writing and strong opinions.

Even when I don't agree.  

And, in the case of this opinion piece, there are some things that I agree with but many I do not.  With apologies for the long comment, let me explain.

First, the notion that "Nokia is losing the 5G race" is simply not true.  Far from it. We continue to rack up new 5G wins at an impressive pace and in a world where counting of "deals" is not always transparent, we are doing very well.  When we announced our Q1 results, we said that we had 36 5G contracts, including 18 with named customers.   And, we have added to that number since.

Second, Nokia's full portfolio does matter.  Half of the 5G deals that I just mentioned include portfolio elements that others do not have.  When we look at our internal customer satisfaction survey – where we are closing the gap to the market leader and increasing the considerable distance from the #3  – direct customer feedback on our end-to-end portfolio is very favorable.  And, the share of end-to-end and multi-business groups deals in our pipeline has continued to grow.  

Third, we did acknowledge that we have some short-term 5G radio roadmap issues.  But, here is what people need to understand.  Every vendor has issues; we just had the courage to say it.  Why am I so sure?  Because we have done tests of active 5G networks where Nokia and/or our competitors have a position.  We have seen that others face some challenges – like all data uplink taking place over the 4G network, not on the also-present 5G.  Dynamic resource scheduling and overall speed are two other areas where we have seen that Nokia's 5G is better.  This situation does not surprise me given our strong record of technology that performs very well in real-life deployments.

And, just so your readers understand, the chipset instability we found was not our equipment – it was in those used for consumer devices (i.e., your phone) – thus proving the point about an ecosystem that is still maturing. Is that an issue for the entire market? Absolutely. 

Fourth, you point to Nokia's soft Q1 results – and, it is true that they were.  But, we had guided that 2019 would have a soft first half and particularly weak Q1. We understand the reasons why and, as we said when we announced the quarter, we continued to hold to our full-year guidance.  You ask why others are not "struggling" and I would address that in two ways. To start with, I can't speak about the revenue recognition policies of others, but I know ours.  They are strict and for good reasons.   

In addition, I would also suggest that the "neutral observer" that you reference should take a bit broader perspective.  After all, a single quarter is hardly a trend.  Just go back to Q4 2018 and do a true "apples-to-apples" comparison with those that report their numbers publicly and you will see a very different story than Q1.  Sure, you mention that we were swapped in Germany, but we have swapped that competitor far more often than they have swapped us. And, despite some losses, our deal win rate suggests we are winning far more than we are losing. 

Finally, you mention Korea.  Initial deployment has been challenging for us and all other vendors. Key to understanding the situation, however, is the fact that we have a very strong market position with all the major operators in the country.  When you combine that with the much faster than expected demand, technology has not been the big issue but rather deliveries.  We have added production capability and are fast getting back on track.  We appreciate the support of our customers and are pushing incredibly hard to get more products to them as quickly as we possibly can.

To be fair, your piece includes facts and quotes from Nokia, mainly from our Q1 announcement.  That is appreciated.  Where we diverge, however, is on the real underlying story about Nokia.  In short, despite a soft first quarter, which we expected, I am confident that Nokia is extremely strong in 5G.

Many thanks, 

Barry French / Nokia

PS: Iain, beer is on me when we are next in same city! 
Clifton K Morris
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Clifton K Morris,
User Rank: Light Sabre
5/7/2019 | 7:30:41 AM
Nokia doesn't understand the US Market
Nokia is a real weirdo when it comes to implementing technology in the US.

Most of its work seems to be based on itellectual property acquisition, but a strategy based on bringing a product to market with a go-to-market plan seems very disheartening and sad.   Wrong people in key positions?

When it comes to hardware, well, all I can point to is the Nokia 6185.


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