posted 08-08-2000 05:37 PM         

Anyway, here was the main excerpt I wanted to draw:
"But the main reason is that Nokia management senses an unrivaled opportunity to draw blood when the rivals are weakest. They are caught between the need to redesign their high-end handsets for the coming digital technologies and not enough time to re-engineer their mass-market model lineups for Christmas. Neither Ericsson nor Motorola realized how badly their new low-end models were flopping until last spring. It's the perfect time for Nokia to launch a ruthless discounting effort at the low end to chop its rivals' margins even further and then launch a blitz of new designs in time for Christmas.

That's why Nokia is willing to suffer a bad quarter: Despite the cost, its likely aim is nothing less than to force Ericsson and Motorola to withdraw from the mass market. This is the moment to finish the main rivals off as a volume manufacturer before the companies have time to recover and revamp production facilities. Motorola as a high-end, niche producer of pricey models would eliminate it as a threat to Nokia's margins. This is where Motorola's strength is, anyway -- all its hits have been high-end products."

Also...

"Trying to stamp out rivals while they are still weak is risky, but not riskier than allowing them to recuperate. Overwhelming competition with turbo-charged segmentation is a tactic that only one company can afford at this moment. I don't know whether the upcoming Nokia products are good enough to justify the blitzkrieg approach that is damaging the third-quarter profit. I don't know whether it would be more sensible for Nokia to stay content with its 30 to 35% share and try to defend it.

But I do know that Nokia might never have this advantage again. It appears willing to leverage it to the hilt. Nokia's big insight this year was to predict that mobile phones without Internet features are still the lifeblood of the phone industry. Rivals took their eyes off the ball and put their resources into fancy high-end Net gadgets. This exposed them dangerously. If most consumers still buy mainstream models next winter, the expensive gambit of a new wave of mainstream models combined with the later launch of Internet gadgets could pay off in a big way. The Helsinki rumors about Nokia's new models anticipate the widest nearly simultaneous launch of different models in the industry history."

Basically, he is saying that though a delay in handsets looks bad for third quarter earnings, what it will end up doing is bringing out all of Nokia's new models during a 3-5 months chain culminating during the Winter, probably driving their competition completely out of business on both the volume handsets and high-end handsets.