InterDigital Inc (IDCC)

[nieves]

=DJ THE SKEPTIC: A Crush On Nokia
By Robb M. Stewart A DOW JONES NEWSWIRES COLUMN
LONDON (Dow Jones)--More worrying even than the decline in profit and the weakening margin is that for all that Nokia (NOK) still only managed to translate stronger sales into a 1% gain in market share.
Had Nokia managed to eke out a greater advance on its competitors then it would seem all the more churlish to dwell on the dip in the average selling price of its mobile devices.
The Finns sold 84 million phones in the last three months of 2005, a 27% rise on a year ago that outpaced growth in the overall market. The rise was in large part fueled by demand in developing regions such as China and India, which goes a ways to explaining the fall in ASP despite the introduction of some nifty high-end gadgetry.
Given Nokia's rising presence in countries such as China and the struggles faced by the acquirers of Alcatel's (ALA) and Siemens' (SI) handset ops, it's disappointing Nokia didn't gain a greater share of the market.
Indeed, it would seem that Nokia's nearest rivals have done better as the market concentrates in the hands of a small number of manufacturers.
Motorola (MOT) appears to have been the prime beneficiary, and while it still trails Nokia it has managed to close the gap. Sony Ericsson, too, has grabbed share - it may remain a niche player, but its Walkman and other higher spec phones have helped it retake ground.
Nokia remains far and away the largest handset maker, with a broad portfolio of products. So long as it's squeezing rivals and using its scale to grind marginal companies, then investors can take a long view of Nokia's prospects.
Yet with Nokia looking for its market share to be flat, it forces the spotlight on the near-term and the Finnish company's eroded margins. And it indicates that competition is eating away at not only the small, but at the industry giant, too - the other facet of that pesky lower ASP.

(Robb M. Stewart, founder of the Skeptic column in 2001, has reported for Dow Jones Newswires since 1997 from Sweden and the U.K. He can be reached on [e-mail])

(END) Dow Jones Newswires
01-26-06 0959ET
Copyright (c) 2006 Dow Jones & Company, Inc.