Sell the cellphone makers?

October 19, 2006

You may love a particular cellphone, but you don’t have to love the stock of its manufacturer. This has always been a tough business to handicap, given difficulties guessing which styles and combinations of features will best capture buyers’ fancy of the buying public. It was tolerably easier back when Motorola’s RAZR seemed to have the monopoly on cool, but now, with all entrants, including Sony-Ericsson, and Samsung Electronics Co (005930.KS) aiming for fashion and getting bruised in the competitive battle, it’s tougher than ever.What’s more it may soon get harder still. Shares of Motorola Inc. (MOT) dropped nearly 5 percent Wednesday after the company missed expectations. LG Electronics Inc (066570.KS) also declined after a profits outlook disappointed. Nokia (NOK) is now taking its lumps, skidding nearly 4 percent at mid-day. The phone maker shipped enough handsets, but it also cut prices more than Wall Street would have liked. Today’s strong performance by Apple Computer Inc. (AAPL) reflects not just iPod but also the company’s apparent ability to spread iPod glory to Macintosh computers. Now, Apple is poised to spread iPod’s halo to iTV and a device that will combine iPod and cell phone functionality. There’s no guarantee Apple will win here; other phone makers are adding music-download capabilities. There’s not even a guarantee Apple will successfully defend iPod against new MP3 competition from Sony Corp (SNE.N) and Microsoft Corp. (MSFT).But stock selection, looking as it does toward the future, is always a game of probabilities.


Good Info. Where were you guys a week ago… BEFORE Motorola dropped 5%.
Seriously, more forward thinking PREDICTIONS would be appreciated.

I am retired. Therefore, I do not have the availability of differing opinions that were readily available at coffee breaks.
I am sure that one or more of your knowledgeable people thought of selling Motorola.

I believe that investors like me would appreciate discussions and valid opinions from people that never agree on anything. This helps us to make a decision.

This type of forum would be unique because Reuters is a trusted source and able to be INDEPENDANT.

Thanks, JB

Posted by JB | Report as abusive

i agree with jb. his is right

Posted by jim h | Report as abusive