Despite a sharp decline after troubling third-quarter earnings, Nokia (NOK) is more or less back where it was the last time I looked at this company,
and now we’re all about six months closer to meaningful deployments of
5G equipment (likely to begin in 2018, ramp up in 2019, and really start
getting meaningful in 2020). At the same time, the company still has
worthwhile opportunities in “ancillary” markets like
analytics/automation and enterprise webscale deployments.
Even
with the boost that 5G deployments should provide, I do not believe
Nokia will deliver all that much long-term growth. Sure, plenty of
third-party sources quote figures in the hundreds of billions of dollars
for “needed” investment in capacity, but that ignores the realities of
the price pressures on companies like Nokia and Ericsson (ERIC), the rise of competitors like Huawei, and the “do more with less” innovations that allow providers to get more out of their installed base.
That
doesn’t mean I’m negative on Nokia. I think the shares are still
undervalued today, with a possibility that expectations for 5G
deployments could improve with time, not to mention potential
outperformance from technology licensing and non-traditional/ancillary
markets.
Click here for more:
Nokia Digging In Ahead Of 5G Deployments
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