Damage Report: Nokia Blows Up Mobile Sector

by: Eric Savitz November 14, 2008 | about stocks: AAPL / ERIC / NOK / PALM / QCOM / RFMD / RIMM / SANM / SWKS / T / TXN / VZ    

Eric Savitz

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Nokia (NOK) this morning said out loud what everyone in the mobile phone business kind of knew already: demand in 2009 is going to be down from 2008. This is an industry that had become accustomed to seeing unit growth in the 10% plus range; to see the industry’s most important player forecast a down year is a shocker, even if you suspected that something like this was inevitable.

Nokia’s warning is weighing heavily on a variety of players in industry: other phone companies; wireless carriers; chip makers; and even contract manufacturers. Here’s a look at the damage:

  • Nokia is down $1.27, or 8.9%, to $12.88.
  • Research In Motion (RIMM) is down $2.48, or 5.7%, to $41.39.
  • Palm (PALM) is down 43 cents, or 14.8%, to $2.46.
  • Apple (AAPL) is down $3.83, or 3.97%, to $92.43.
  • Ericsson (ERIC) is down 41 cents, or 5.74%, to $6.72.
  • Skyworks (SWKS) is down 72 cents, or 11.75%, to $5.41.
  • RF Micro (RFMD) is down 15 cents, or 9.94%, to $1.40.
  • Texas Instruments (TXN) is down 64 cents, or3.7%, to $16.73.
  • Qualcomm (QCOM) is down $1.1, or 3.2%, to $33.84.
  • Sanmina (SANM) is down 9 cents, or 14%, to 55 cents.
  • Verizon (VZ) is down $0.11, or 0.35%, to $31.03.
  • AT&T (T) is down $0.83, or 2.9%, to $27.84.

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This article has 9 comments:

  •  
    Nov 15 10:00 AM
    The beneficiaries of this recession will be the telecos. People will let their fingers do the walking and use less energy. They will keep their old phones longer as they are keeping their old cars longer as the incremental improvements are no longer worth the money if you are strapped for cash.

    Winners will be the Telcos and as capacity utilization increases the telco equipment providers.

    I'd like a new iPhone but my current phone does everything I need (if not everything I want). So I'll hold onto it for a couple more years and endure the hardship of not having a phone that does gestures.
    Reply | Link to Comment
  •  
    Nov 15 01:07 PM
    I think the iPhone is cool, but hey, I'm not a fool to piss away money, my curve does everything I need, and I'm actually thinking of ditching it and going back to a simple phone, because I don't want to be constantly reminded of something to do.

    iPhone will need to come down in price,and ATT will have to lower it's data subscription costs for me to be interested in buying the iPhone.
    Reply | Link to Comment
  •  
    Nov 15 01:29 PM
    i have an iphone and its not priced a lot higher than other smartphones. it has way more capabilities. i dont think the iphone will be hurting in 2009. quite the contrary, it will be the thing that inflicts damage to the rest of the industry. the blackberry storm looks really cool but it looks like its too little too late for RIMM
    Reply | Link to Comment
  •  
    Nov 15 01:38 PM
    You overlooked a couple of Contract manufacturers that will also suffer:

    Reply | Link to Comment
  •  
    Nov 15 01:43 PM
    Ooop pushed the wrong button.

    You overlooked a couple of contract manufacturers that will also suffer:
    CLS Celestica <6.5%>
    FLEX Flextronics <9.7%>

    Reply | Link to Comment
  •  
    Nov 15 03:06 PM
    A note on these extremely low prices: a January 2010 option straddle on PALM costs less than the stock, controlling 100 shares for over one year, with zero to very little risk through February, largely protected from downside risk and with all the upside potential of the shares if PALM even modestly recovers to around $5. The same strategy applies to almost any of the beaten-down issues, just buy plenty of time (PALM also has a January 2011 LEAP option available). Unless this is the EOW (End of the World), most of these bets should pay off, but it's still nice to have downside protection. There may not be such an opportunity for many years. I'm not doing this yet, as there is still downside money to be made from simply buying puts during the recession. But it will be a sweet way to greet the dawn.
    Reply | Link to Comment
  •  
    Nov 16 12:11 AM
    Apple sales will increase (iPhone & Mac).
    Reply | Link to Comment
  •  
    Nov 16 06:16 AM
    To "Fremont Realtor" above

    - I'm from the UK, but if you have the same reputaion as our estate agents here have..

    - then the rest of us are really delighted that you cannot afford an iPhone.

    Hooray, some justice.
    Reply | Link to Comment
  •  
    Nov 18 09:18 PM
    On Nov 15 01:29 PM waf76 wrote:

    > i have an iphone and its not priced a lot higher than other smartphones.
    > it has way more capabilities. i dont think the iphone will be hurting
    > in 2009. quite the contrary, it will be the thing that inflicts
    > damage to the rest of the industry. the blackberry storm looks really
    > cool but it looks like its too little too late for RIMM

    iPhone is too expensive for the emerging countries especially now in recessive economy. iPhone has already failed badly in India since August. Nokia with its low end products has very strong position in BRIC, retail is ready there and their new touch screen model (with nicer price than iPhone I predict) will be available soon. Nokia can also pretty much stand price erosion, how about Apple and RIM?
    Reply | Link to Comment
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