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MA Stedman

 
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  • It's Restructuring That Will Position Nokia For Success, Not Smartphone Sales [View article]
    All depends if Microsoft lets it see the light of day.
    Dec 11 02:35 PM | Likes Like |Link to Comment
  • It's Restructuring That Will Position Nokia For Success, Not Smartphone Sales [View article]
    Exactly, idx1. The restructuring has given them a solid foundation to build off of. They can get by with low smartphone sales. That gives them time to build a winner, even if it takes a year or two. Which, quite frankly, I think Windows Phone 8 will take. I think it will build market share over the next few years (impossible not to really) and that Nokia will rise with it (and with the overall increase in smartphone sales that are happening globally). Even just keeping with the average growth the industry expects could position Nokia to pleasant profitability.
    Jan 19 02:23 AM | 5 Likes Like |Link to Comment
  • It's Restructuring That Will Position Nokia For Success, Not Smartphone Sales [View article]
    Yes, gyer02, there certainly is a relationship between lower sales and lower costs. However, usually if you take a large corporation and dramatically (and quickly) reduce its sales, it doesn't have as direct a reduction in costs because it wasn't expecting the reduced sales and probably hopes for its sales to rebound. However, if you are able to act on those diminished sales, you can reduce costs inline (or even beyond) the loss the diminished sales has cost you.

    That is what Nokia has done. It had its feet knocked out from underneath it (somewhat by the market and somewhat by itself). It was slow to react to this and so saw its profits fall and eventually become losses. But now that it has reacted, it has been able to stabilize itself and position itself for those reduced sales (and even further reduced sales really, it could take even lower sales and still be viable).

    So, when I mentioned that its revenue has fallen further than its loss, I mean that it has positioned itself to absorb the reduced sales by reducing its expenses even more so.

    The other thing is that it is not just cell phones impacting Nokia's bottom line. NSN is a huge part of the company, more so now than before, so you can't just point to the reductions and ask how they impact the marginal cost for each phone. Nokia is greater than just phones.

    None the less, a good point to consider for future articles. Thanks.
    Jan 19 02:23 AM | 1 Like Like |Link to Comment
  • It's Restructuring That Will Position Nokia For Success, Not Smartphone Sales [View article]
    I think we share many of the same sentiments, John.

    I believe Nokia has the Strategy and is almost done with the Structure. The Performance, however, I think will take longer than most people expect/want. I get the feeling that people want to see Nokia shoot back up to 15M smartphone sales per quarter. However much I would like that too, it is just not realistic. I do see Windows Phone 8 (and Windows 8) succeeding eventually. But I think it will take time. I am long on Nokia for a reason, because I think it will take time, but that the payoff is there to be had...and the payoff will indeed come from smartphone sales, and that is certainly what Nokia should be focusing on.

    One thing to note are the recent rumblings by other smartphone makers that they will/might be putting out Windows Phone 8 devices. Nokia and HTC are the torch bearers. Samsung is already there. Huawei just launched its first device. LG and Asus are possibly going to launch WP8 devices. They would not all be getting into the mix if they didn't see the upside. And while some Nokia investors might be scared that having more competition is bad, I think at this point in the WP8 life cycle, the more, the better. Nokia has proven it can outsell anyone in the Windows Phone market, so if more come in and just increase that market, Nokia will do just fine.

    http://bit.ly/108lIPy
    Jan 19 02:23 AM | 2 Likes Like |Link to Comment
  • It's Restructuring That Will Position Nokia For Success, Not Smartphone Sales [View article]
    Hi doggiecool,

    I agree that most of the restructuring is done too. In fact, if you read the press release Nokia put out about the recent IT staff reductions/transfers (http://bit.ly/SOzuto), they says as much: "These are the last anticipated reductions as part of Nokia's focused strategy announcement of June 2012." (I'm not sure if that counts NSN though).

    That being said, Nokia has at least two more years of charges and cash outflows related to the restructuring effort. Which means they won't see the full affect of the changes until those costs go away. We're seeing dramatic cost reductions already, but there are more to come.

    Also, I feel that Nokia went through its restructuring quicker, and more successfully, than they thought they would (I'm separating restructuring from the Symbian -> Windows Phone switch). And because of that, I think there might be more to come. I suspect there are a few more divestitures to come, such as property and some smaller, non-core, business areas (in NSN particularly). That's just my opinion, not anything I can directly point to.

    So that is what I mean when I said "its structural charges [are] well underway". They are mostly done, but still have a couple of more years to realize all of the benefits. So, yes, a clarification was indeed needed. Thanks.
    Jan 19 02:23 AM | 5 Likes Like |Link to Comment
  • It's Restructuring That Will Position Nokia For Success, Not Smartphone Sales [View article]
    Hi skylark99,

    I am differentiating "saving" Nokia (which I believe is done through restructuring) and returning Nokia to a force (even if it is behind Samsung and Apple) in the smartphone field.

    I think Nokia needs to sell at least 10M Lumia per quarter to be considered a significant player in the smartphone field. It is a significant player in the overall cell phone industry (300M+ cell phone cells in 2012 is pointing to that), but that is just not cutting it for investors it seems.

    I've been monitoring the sales charts too. I can't say they have been great, but they are very far from bad. Even the 810 has been near or at the top of the Amazon T-Mobile sales since it launched, and the 822 has been decent at Verizon. I'm really interested to see what sales will be like in China.
    Jan 19 02:23 AM | 2 Likes Like |Link to Comment
  • Nokia's (Hidden) Value - Part 2: Potential [View article]
    "What concerns me is competitor WP8 devices that may aggressively price out the Nokia Lumia line."

    I share the same concern, macro. Samsung in particular could try to hurt Nokia by selling at lower prices (possibly even a loss). And Nokia's marketing so far has been less than stellar. But, as dhdhoora said, Nokia's product is by far superior, and the few polls I've seen around in regards to Windows Phone 8 have almost always had the Lumia 920 as the top pick for which WP8 device people are going to buy. Another thing to consider is that Nokia controls the current share of Windows Phone devices. While the selection from the competition is nothing great, Nokia is owning the market, and that includes Samsung and HTC.

    http://dthin.gs/S4NMT0
    Oct 18 12:57 AM | Likes Like |Link to Comment
  • Nokia's (Hidden) Value - Part 2: Potential [View article]
    I've seen the Ford comparison before and agree that it is very similar. If memory serves me correctly, Ford bottomed out at just under US $1.50 per share in late 2008. By the middle of the 2009 they were already over $6.00 and have been over $10.00 since (with a peak of around $18.00). Digging out of such a big turnaround is not easy, but when the company that is doing it has a pile of cash and still has a strong core business, it can do it and come back leaner and meaner (well, Nokia might eclipse what they once were, that would be quite a recovery, but it can be the second biggest cell phone maker in a hugely expanding market).
    Oct 18 12:34 AM | Likes Like |Link to Comment
  • Nokia's (Hidden) Value - Part 2: Potential [View article]
    I agree with a lot of what you said, caleb23.

    I was surprised by how many times the September 5 Microsoft/Nokia event was cast by people as "disappointing" for Nokia and the new Lumias, when it was only disappointing in the eyes of investors, not necessarily potential buyers. Yes, it was a rather unspectacular event that could have been something positive for the company, but it was not really indicative of how sales will go once the 920 and 820 are released.

    In terms of the Q3 results, I agree, what is most important could be what the guidance for Q4 is. I think Nokia will be looking at 4M-12M in Lumia sales in Q4. There is a lot of buzz right now about high sales of the existing Lumia products in some markets (as they are priced cheaply) as Nokia clears inventory, so that will help the sales figures. But I think the new phones, launched just in time for the holiday season, will do at least as well as the previous quarters (4M in Q2), so to me Nokia is looking at probably 8M sold, with a 4M variance either way (yes, a big swing, but that is the situation Nokia is in right now).
    Oct 18 12:34 AM | 1 Like Like |Link to Comment
  • Nokia's (Hidden) Value - Part 1: Restructuring [View article]
    "Restructuring is for myself not a lost or burned cash, its more an investment. "

    That's precisely how I feel. That being said, I don't like it when companies have to restructure and lay people off, but you can't keep doing the same thing if it isn't working. Nokia is laying off over 20,000 employees, but that is so the remaining 100,000+ employees can keep working. And, if/when Nokia returns to profitability, I suspect they will re-hire many of those laid-off employees (or at least replace them). Every dollar they save today, pays itself back many, many, many times over in the long run. That is exactly what an investment is: creating future wealth.
    Oct 18 12:34 AM | Likes Like |Link to Comment
  • Nokia's (Hidden) Value - Part 1: Restructuring [View article]
    Nokia has more expenses in the first half of each year than in the last half. The interest payments on their debt occurs in Q1/Q2 and their dividend payment is in Q2. So they front a lot of expenses. So they should certainly loose less money in Q3 and Q4 than they did in Q1 and Q2, but I suspect that they will have lower income from smartphone sales (even if the quantities are similar to Q2, the average price will be down substantially), which will hurt revenue. On the other side, they'll get some relief from their divestments, such as from the Vertu sale.
    Oct 18 12:34 AM | Likes Like |Link to Comment
  • Steve Elop Is Killing Nokia? I Don't Think So [View article]
    "I don't know where the author got his numbers when he claims that consumers are angry with Lumia and it has the highest return rate ever."

    I had the same reaction as you when reading his article. What I believe he might have been misconstruing was that since the Lumia line wasn't selling well, it had a lot of returns (to Nokia). However, he thought that those returns were from customers (to the stores), which from everything I know, is not the case at all, people are very happy with their Lumias (Windows 8 non-upgradeable aside).
    Oct 16 10:21 PM | Likes Like |Link to Comment
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