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In today's Motley Fool Take:
- Nokia's Hard Knock
- Shameless Plug: Motley Fool Champion Funds
- Google, Yahoo! Duel
- Quote of Note
- Disney Last Dud?
- Discussion Board of the Day: Disney
- More on Fool.com Today
Nokia's Hard Knock
By Alyce Lomax (TMF Lomax)
Handset maker Nokia
Nokia said its first-quarter sales will be just shy of $8 billion, a 2% decrease from the same quarter a year ago. And since Nokia missed opportunities in the mid-price range in the U.S. and Europe, traditionally two strong markets, it allowed rivals such as Motorola
Much has been made of the popularity of fancier cell phones recently. Improving consumer confidence results in people eyeing their antiquated ones and mulling over new models. Number portability has given people an added incentive to upgrade their cell phones and maybe even spring for new, fancy models with neat-o features. Those that integrate digital cameras are gaining in popularity.
What was Nokia thinking? If consumers, especially here in the U.S., are breaking free from their tight budgets after a long period of economic uncertainty, it stands to reason that they're not quite ready for the top of the line and want a phone with exciting features but won't break the bank. And apparently, that's what rivals had that Nokia didn't have.
As much as Nokia's news stinks, it does bear some resemblance to Motorola's situation several months ago, when the latter reported disappointing handset sales after it delayed shipment of some long-awaited models and thus missed the crucial holiday shopping season.
Nokia shares were down 18% in recent trading as investors made their displeasure known. They also dragged down shares of competitors and tech stocks at large. However, despite the panicky feeling Nokia's warning brings, the response across the tech industry seems overblown. In this case, it's poor execution, not that consumers have suddenly lost interest in newfangled gadgets.
According to Nokia, it continues to achieve profitability, although it also said in its conference call (transcript courtesy of CCBN StreetEvents) that the reorganization of its handset division has "slightly slowed" its "reaction and operational effectiveness." That's an element to watch.
It may not be the end of the world, but it's a warning sign nonetheless. Nokia said it has 40 new products on the way, with the first half of the year remaining "difficult." Investors need to watch carefully to make sure it returns to the right track later this year. However, given the recent appetite for fancy new phones and the post-holiday buying season, investors have real reason for disappointment.
Alyce Lomax does not own shares of any companies mentioned.
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Go ogle, Yahoo! Duel
By Tim Beyers
Time Warner's CNN.com
For its part, Google says it will replace BellSouth's
If anything, the various announcements demonstrate that Yahoo! and Google are increasingly stepping on each other's toes. And it's no wonder. Overture pioneered pay-per-click searches, which have become a big business expected to generate as much as $4 billion annually by 2005, according to published reports. Google and others, likeAsk Jeeves
Similarly, Google is the heavy in powering searches of corporate websites, with 130 business customers. A search of its 2003 10-K reveals no such numbers for Yahoo!, but the CNN deal demonstrates that the relationship with Overture gives it a fighting chance in corporate search. Citigroup's
What does it all mean for investors? Nothing yet. This is a competition worth watching for its entertainment value. Over time, the various parries in the news may give clues as to who will dominate the market. You might try playing press release bingo with each company's announcements to get an early indicator. (Write me if you do.)
But don't expect to see investing opportunities soon. As Fools know, long-term gains in the market are rarely fueled by hype.
Fool contributor Tim Beyers thinks Google rocks for Web research, but he depends on Yahoo! Finance. He owns no stake in either company, or any of the firms mentioned in this story. You can view his Fool profile here .
"Make money your god and it will plague you like the devil." -- Henry Fielding
By Rick Aristotle Munarriz (TMF Edible)
Think ink or stink ink? Disney's
Remember when Disney's golden animated features drew huge crowds and rave reviews? This latest entry didn't even contend for a medal this weekend, coming in fourth against more popular releases by rivals Sony
This may be Disney's last stand in hand-drawn animation. After watching Motley Fool Stock Advisor recommendation Pixar
But that could be a huge mistake. Blaming the medium instead of the messenger is akin to blaming your tailor because you gained a few pounds. You simply can't make a blanket statement that hand-drawn animation is dead and that computerized renderings are the way of the future.
Ten years ago, Disney released The Return of Jafar direct to video. The company bragged that it was more profitable than its blockbuster live action flick, Pretty Woman. I would argue that it has proven far more costly. Realizing that folks were willing to buy an inferior Aladdin sequel, Disney went on to milk its classics with hollow, cut-rate follow-ups. It diluted the perceived quality of the originals by stuffing the distribution channels for the sake of churn.
Would Finding Nemo have bombed if it were hand-drawn? I doubt it. Would Home on the Range have been a box-office blockbuster if the barnyard critters were dolled up on high-end Silicon Graphics
There are plenty of computer-animated television shows out there, but the favorites are hand-drawn, like SpongeBob and Rugrats. It's not the format. It's not pixels versus inkblots. It's the story. In the end, Disney's franchise and the animation medium may have been sullied and diluted, but like its own classics, it was by the stroke of Disney's own hand.
Longtime Fool contributor Rick Munarriz owns shares in Disney and Pixar. He's not bad, he's just overdrawn that way.
Did you see Home on the Range? Do you think that hand-drawn animation has become obsolete? What will the company do once Pixar goes away come 2006? All this and more -- in the Disney discussion board. Only on Fool.com.
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In other news:
For a list of all our stories from today, see our Today's Headlines page.