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No. of Recommendations: 2
I find it surprising that with so many excellent suggestions and discussions going on about Gorillas and Kings that no one has mentioned Ericsson. The wireless industry does get a lot of attention, but Nokia seems to get the spotlight.

I am writing this from memory so this message isn't packed with precise facts and figures. But here are some qualitative arguments:

- In the wireless infrastructure space, Ericsson is about 3 times the size of its nearest competitor, Lucent. Following that are Motorola, Nokia and Nortel. Ericsson is much bigger than its next two competitors combined.

- 50% of Ericsson's revenue comes from wireless infrastructure. 25% comes from handsets and another 25% comes from some other wireless related stuff that I can't remember.

- Most of the attention goes to Nokia because it is the leader in the handset space (30% market share) which is the most visible market. However Nokia gets only 5% of its revenue from wireless infrastructure.

- Ericsson is third in the handset space (approx 15% share) behind Nokia and Motorola.

- Ericsson was in the doldrums a couple of years ago, partially due to delays with bringing newer handset products to market and got its butt kicked by Nokia. New management has been in place now for several quarters and most of those problems have been rectified. Its reputation with investors did suffer and it is perhaps this that explains why it isn't as much in the limelight as is Nokia. Nevertheless, its stock has risen from around 30 a few months back to the low 100s recently.

- According to a Goldman Sachs report on wireless industry trends, they expect the leaders in the handset and infrastructure space to consolidate their leadership in the coming years.
The huge investment in marketing, brand awareness and R&D that are required constitutes a very large barrier to entry and they expect that current market shares, will be broadly unchanged in both the handset and infrastructure areas. The three strongest companies here (Nokia, Ericsson and Motorola) are firing on all cylinders.

- In almost every single wireless technology initiative that I read about in the press, two names occur without fail - Nokia and Ericsson. These two have their fingers in every pie and are destined to succeed regardless of which wireless technology dominates.

- Wireless operators are spending huge amounts of money building out and upgrading their wireless networks. Voice traffic is exploding and stealing share from fixed phone line, geographical coverage is expanding as new regions and countries get "mobile", the next wave of traffic will be data, and Internet transactions and fixed wireless LANs (with Bluetooth) and wireless Internet appliances and on and on. This isn't simply about how many people have a mobile phone, it is that people are talking much more on their mobile phones.

- From what I hear, Sweden and Finland, home of Ericsson and Nokia respectively are two of the most "unwired" countries on the planet.

- I don't think I need to tell anyone that the wireless industry is BOOMING and that we are only in the beginning of many years of phenomenal growth.

In conclusion, I think Nokia and Ericsson are both excellent companies, each dominating a different market in the wireless industry and I own shares of both.

What do you think?
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