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Davidoff

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  • Nokia Attacks Competitors By Lowering Lumia Prices [View article]
    Nokia sold only 7m smartphones, its Smartphone division lost €165m and Services and Devices lost €33m in the second quarter. They might earn money by selling their phones, but it's obviously not enough. I don't see the point of playing on words, the results are still terrible. In my opinion, they would have sold much more phones if they were using Android OS. They lost their edge by using a poor OS that nobody wanted. Some people can't learn on their own mistakes and keep choosing the hardest way. The worst thing is that now they fight Microsoft's war! They don't even own WP and who knows if they'll keep it.

    NOK is a good trade. I made 46% in 4 months last year and I'm at +29% now. Hope it will go above $5 by December. If not, they will probably do better next year.

    Diablogun,

    You know more Russians than I do? Wow... That's incredible, thanks for sharing! I suppose that in your mind it seemed to be a strong argument. If you want to make stakes go to Vegas. It's an investing site, not a Belagio fan page.

    Mepa,

    That's my personal analysis. Each investor makes his own projections, otherwise you just follow the crowd. Take Nokia's financials and prove me that NOK would do better than AAPL. NOK has much less chances to succeed at this point.
    Aug 14 07:42 PM | 1 Like Like |Link to Comment
  • Nokia Attacks Competitors By Lowering Lumia Prices [View article]
    Randal,

    iPhone 5 is losing share and there isn't much to do about it, except releasing something really special. According to this article a subsidized iPhone 5 costs 30k rubles, which is roughly $1,100. An unsubsidized costs about $1,300 in Russia. However, according to what I've been told, most of the Russians don't buy Apple products in Russia, cause they are afraid to buy a Chines counterfeit. So they buy them in EU or Switzerland. It's cheaper and it's being counted in another country's sales.

    Doggiecool,

    First, who's fault is that, that the giant Nokia, the former number 1 phone maker became a "piddly little company"? And Nokia didn't abandon the US market, it lost it. Today it desperately tries to gain it back, which causes the frustration of the European customers. Read the British, French and Spanish WP fan sites. People are frustrated that the L1020 has been released in July in the US and that it's only going to be released in September in the EU. Plus, for the first time, Nokia is going to organize its annually worldwide conference in the NYC. The only result is that Nokia still has a long way to go to gain the US back and it loses customers in the EU by its ridiculous strategy.

    Secondly, I just don't see Nokia competing against Apple. They operate in two completely different segments. Nokia is a direct concurrent to Samsung. They both try to make some geeky phones, with some bizarre features and bulky designs. It might sound stupid, but Apple's core customers don't really care about specifications or features, all they care about is the design and the trend. Today iPhone became the former Blackberry, it's first of all an image. As long as Apple would offer a better model than the previous, people will still buy it. The iOS is also so well integrated in the house, that people would simply lose too much comfort. Most of the people have an iPhone, an iPad, an iPod (maybe even an iTV) and a Mac. They would lose the iCloud and all their Apps, that they've been purchasing for over 5 years. In that way, this attachment is less pronounced among Samsung's customers. I could imagine that Nokia would become the number 2 with time, but it's going to be really hard and long.

    Finally, I'd like to resume my points regarding Nokia :
    1. Nokia makes high quality phones and now they probably make the best low-end phones. However, they aren't trendy like an iPhone would be, they are just functional.
    2. Nokia doesn't need Windows Phone. Elop took unnecessary risks by going exclusively with WP and the demand isn't high enough to compensate them. It's Microsoft's project and they have the necessary funds to develop it. Nokia takes all the risks for the OS that will never belong to them and they lose a lot of customers by not adopting Android. Microsoft has enough money to take risks, while Nokia should think about its own future and its investors.
    3. Once again, like all the dinosaurs, Nokia's board refuse to listen to its customers. Adding some superficial and unnecessary features, like a 41mp camera, won't help them gaining a massive market share, if they can't satisfy the basics. You can't oblige people to use WP by offering them a 41mp camera.

    CindyWu1018,

    Take for example a Mercedes. Some people can afford a Mercedes S, some people can only afford a Mercedes C. They are both luxury and expensive in their own segments. A $300 iPhone is still expensive for a large part of people.
    Aug 14 05:57 PM | 2 Likes Like |Link to Comment
  • Nokia Attacks Competitors By Lowering Lumia Prices [View article]
    Doggiecool,

    While Nokia was manufacturing 200m phones, Apple was selling around 120m high-end and high margin phones a year. Gaining Russia back? Last time I've been to Moscow, about six weeks ago, all I saw were iPhones and iPads! Today Apple is THE brand that all the developing countries want. There are dozens of markets around the world where an iPhone is beyond people's dreams. And there won't be much to do, no marketing, no promotions, just a more affordable price. Apple is going to conquer by its rarity and exclusivity in the developing markets. So all the Nokia, HTC, Samsung and Blackberry phones in the range of $400 and $200 are going to have a terrible year. The 2009-2012 queues that we had in NYC, London and Paris are going to be nothing compared to what is going to happen in the developing countries once the low cost iPhone is going to be released. Lower margins are going to be largely compensated by a tremendous demand.
    Aug 14 04:00 PM | 2 Likes Like |Link to Comment
  • Nokia Attacks Competitors By Lowering Lumia Prices [View article]
    The Flew,

    Oh wow, NOK makes a couple of bucks on two low-end devices... That's a game changer! Gaining low-end share is positive when your high-end phones are a success, like in Samsung's case. Nokia is trying to apply the same old strategy that brought it to the corner - flooding the market with cheap phones. I just don't see its share rising without some massive attraction in the high-end segments.

    I'm sure that if Nokia's engineers are able to put a 41mp camera in a phone, they could easily make an Android device that would run smoothly. Samsungs run pretty well AND they showoff with their high specs, which they simply need to run the OS, I'm sure that Nokia could do the same. It's pretty hard to make customers believe that a Nokia with low specs can run as well, or even better than an Android with high specs. It basically disadvantages them on the market.

    Doggiecool,

    So you imply that I have the right to chose between 2 options? That's quiet narrow! I have a 3rd option for you, doing the same thing that Samsung and HTC did - going for a second "rescue" OS and giving the customers what they want - an Android Nokia. Why according to you Samsung and HTC have more Androids than WP's, if it's such a great OS? Because customers want Android. Nokia isn't the 2008 Apple, they can't impose anything to their customers and it would be much wiser to please them. Going for both WP and Android could show them, what people want and offer the choice. Android could have been Nokia's cash cow and an insurance that Nokia would be able to keep producing phones. Today, Nokia broke even, only thanks to the NSN and that's the issue! A company can't use its other divisions as an ATM indefinitely. Besides, no other Android phone maker would have a chance against the high quality Nokia's hardware.

    That's exactly what Apple is going to do. First they release their first low-cost device. Say it will cost $300. People from developing countries with means will buy it. A year later, they will release a new low-cost device and the previous model will already be sold for about $150. And people won't care about the margins. Apple will simply flood the developing countries. A little question... When was the last time that you've seen an mp3 that wasn't an iPod? Maybe it's a little bit too optimistic to compare the phone market to the mp3 market, but I believe that the low cost iPhone will be a massive hit in developing countries in 2 years from now.

    Seppo,

    25% margins is good when there is a demand and especially high-end demand. The cheaper is the phone, the more phones they will have to sell to break even. Putting everything on the low end isn't a good model. People are reluctant to quit Android and iOS. Today you are attached to the cloud and the Apps that you've already purchased. After almost 3 years there are still no sufficient arguments to move to WP.
    Aug 14 03:14 PM | 3 Likes Like |Link to Comment
  • Nokia Attacks Competitors By Lowering Lumia Prices [View article]
    What's the point of another Windows tablet if even the Surface is a huge failure? The only thing that NOK could release is a phablet. But once again, what for? The market is completely marginal. If NOK can't gain any customers with WP Lumias, a phablet won't make things any better.
    Aug 14 12:03 PM | 5 Likes Like |Link to Comment
  • Nokia Attacks Competitors By Lowering Lumia Prices [View article]
    I agree that the fact that Nokia phones are being so hardly discounted, becomes dramatic. It seems that Nokia decided to systematically lose money on each phone that they sell. However, it's a common commercial strategy, that can only be evaluated on the long term. There is absolutely no other way for them, to regain customers, besides offering better phones at lower prices. The growth is definitely here, however this growth is pointless if the phone division can't be self sufficient and drains all the company's cash.

    I assume that Nokia's board has some precise deadline for their current strategy and that this circus won't last forever. They will have to take some dramatic decisions in the near future. Either they sell their phone division to MSFT, either they take another 4 quarters and start making Android phones, since the only issue is the OS. This situation can't last forever. The only thing that holds the stock price at these levels is their phone division, or to be more precise Windows Phone. Perhaps Nokia would become more profitable by quitting the phone market and concentrating itself on more profitable segments. The main issue is that the money that they lose on their phone division could be used much more wisely in R&D. If they keep chasing two rabbits at the same time, they could lose all their profitability and their edge on the other markets. Make the phone division profitable or sell it.

    Basically, like most of the investors, I like NOK, but I hate WP. The day they announce an Android Nokia the stock is going to rally to $6.
    Aug 14 11:57 AM | 4 Likes Like |Link to Comment
  • BlackBerry evaluating strategic alternatives [View news story]
    With spikes like we've seen this year, both shorts and longs have been more than rewarded. As I said before, I made x6 more money trading BBRY, than I made by shorting AAPL. BBRY share can go as low as $6 and as high as $18, so the premium will be calculated accordingly. We can only guess at this point. A company doesn't need to be successful or even make profit to be overpriced, it just needs some hype. With all the speculation that we are going to see ahead, the stock can go absolutely anywhere. A simple verbal 'interest' on behalf of any company (like Lenovo) will make the shares soar, while the bottom seems to be set at $9,50-10 for now. So your claims, that the stock will be sold at $10, or below $10 are as speculative as the claims that the stock is going to be bought at $40. As I see it, BBRY might be bought somewhere in the range of $12 and $15. I agree with you, that we are all businessmen and we all want to buy cheap and sell high. However, anyone who will want to purchase BBRY will have to do it by rules, by pleasing most of the investors and not making any unnecessary waves in this deal. Watsa is already at the border of a conflict of interests. The shares have been manipulated (both up and down) for a while now, and it isn't likely to stop now.
    Aug 12 09:40 AM | Likes Like |Link to Comment
  • BlackBerry evaluating strategic alternatives [View news story]
    I doubt that it would pass a shareholders vote for less than $15. Even Fairfax Financial's average share price turns around $14.
    Aug 12 08:32 AM | 2 Likes Like |Link to Comment
  • BlackBerry evaluating strategic alternatives [View news story]
    It's really amazing that the world's 4th mobile company has to go private or to go on sale, regardless of its strong balance sheet and its more than correct sales figures, just because Wall Street isn't pleased with its results. If that's not a sign that the stock market is completely detached of the real economy and the reality, I don't know what else you need. What it basically implies, is that unless you're in the top 3 in your area, you shouldn't even bother doing business. It's a completely biased vision and it simply goes against all the economic and business theories.
    Aug 12 08:27 AM | 8 Likes Like |Link to Comment
  • Gold miners tumble as gold slips below $1,300 [View news story]
    I'd say that Nash equilibrium theory would contradict your opinion. It isn't that easy, as in theory, to close production and layoff working force and of course it would be illegal for the gold miners to make any sort of arrangements in order to reduce the supply. Their fixed costs are simply monstrous, so if they stop working they will lose even more money by not extracting at all. Miners tend to produce no matter what until the moment when the costs become too high and they go out of business. It's simply a matter of time until small miners will start to fill for bankruptcies. Generally speaking, inefficient mines are getting bought by national companies of developing countries like China and India and if they extract any gold, it isn't being commercialized. At these gold prices, I doubt that miners would start purchasing additional high cost assets, unless they'd be really cheap.
    Aug 6 01:28 PM | Likes Like |Link to Comment
  • Gold miners tumble as gold slips below $1,300 [View news story]
    For those who don't want to invest in gold, it's the right moment to invest in big mining companies with the most efficient production costs. Even though, it's unpleasant, these price slumps will only benefit companies like GG or ABX on the long term, reducing the concurrence on the market. Companies with the highest total average costs structure won't be able to remain in the business, even on the short term. More and more companies are going to go out of business, the supply is going to be reduced, while it's very unlikely that the gold demand would slump in the foreseeable future. The gold market isn't an exception to the supply and demand theory, even though other major political factors intervene. So eventually, in a couple of years frame, the gold prices will go up dramatically.
    Aug 6 11:47 AM | 3 Likes Like |Link to Comment
  • Why Facebook Is A Great Company With Nearly Limitless Future Possibilities [View article]
    The issue here is that investors don't take into account the elasticity between the amount of ads and the site's use. More advertising doesn't mean more revenue. There is a limit not to cross. Basically, the more "uncovered" ads you add, the less your customers are going to be responsive to the ads and would be comprehensive regarding the fact that ads pay for the free service. This high marketing regime can't last forever. People get very easily annoyed and nothing really holds them at FB, there are other, less intrusive social sites. While marketing companies will only pay for a very precise audience and only until the advertising works. Today it can be seen as a successful marketing in part due to a novelty. So this kind of results should be taken as a pleasant surprise. Well done for the quarter, don't expect an encore any time soon... Enjoy your ride around $40-42 with the usual upgrades and PT increases and take your profits.
    Aug 5 08:43 PM | 2 Likes Like |Link to Comment
  • How Moto X Will Change The Smartphone Industry [View article]
    Sorry, but in my opinion Moto X is simply a joke. Like always when it comes to hardware, Google makes a lot of noise for nothing. Google announced a phone that would revolutionize the phone market with its highest specifications and its incredibly low price. Well, Moto X has lower than average specifications and its only arguments are being customizable and being made in the US (probably exclusively for the US). What a revolution for a higher price than iPhone, Samsung and even Nokia! And the worst thing is that we bash Apple for its lack of innovation... I don't know what happened at Google, but they clearly failed. At some point, they should stick to the software, where they are undeniably at the top.
    Aug 5 09:36 AM | 6 Likes Like |Link to Comment
  • Nokia Investors Need To Worry More About Sony And Less About BlackBerry [View article]
    A question of pride and common sense. MSFT already spent around $1-2B worldwide in 2012-2013 (the actual figure hasn't been revealed) on the largest marketing campaign, trying to promote W8 and WP8. Why would they stop now, since there is some actual sales growth? However, as I see it, if they had used at least 50% of this marketing money to hire developers to make WP8 more advanced and more innovative and to develop more Apps, the effect would have been way more positive! Cause let's face it, the weakest link remains MSFT... All the negative remarks target exclusively WP8 OS.
    Jul 29 01:31 PM | 2 Likes Like |Link to Comment
  • It "just isn't true" that teens are leaving Facebook (FB), says Mark Zuckerberg during the Q2 call, citing company data and countering reports of teen fatigue. He adds "people on average are spending more time on Facebook than ever before," and that the company's main ad priority is to grow its advertiser count, rather than its ad count.  Gaming revenue was up an adjusted 11% Y/Y (good for ZNGA ... if it can halt share losses). Though capex fell in Q2, it's expected to grow 50% Y/Y in 2013. Time spent on Facebook averaged 20B/day in June, or 17 minutes/MAU. Ad prices +13% Y/Y, and spending by e-commerce firms rose significantly. Zuck again suggests Facebook is in no rush to monetize Instagram. FB +16.9% AH. (Q2: I, II) (live blogs: I, II[View news story]
    I don't really see why cognitive psychologists would "wish" that Facebook would lose users. Trends always come from the top and reach the bottom. Wealthy teens brought Facebook to Europe and made it trendy, other teens followed, then parents and finally the grandparents. It was a form of social distinction to join FB in Europe, cause most of the people didn't even know what it was, and now that it became mainstream, it became a social distinction sign to quit it, even though you can't really quit Facebook, since they own each profile and never allow to delete them. So these same wealthy teens will certainly bring Facebook back to the ground in a couple of years. After all, social sites are a trend like any other and they depend entirely on their users. They don't have any other alternative income, besides the users. The positive side is that the third age seems even more addicted to Facebook than the teenagers.
    Jul 25 09:54 AM | Likes Like |Link to Comment
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