Is Nokia the next Ericsson?

The Finnish company was not the first to discuss the break-up of the

     Nokia agreement to sell its mobile phone business to Microsoft. Ericsson, a Swedish telecoms equipment maker, issued a takeover offer to Nokia in 1991, but the deal was not finalized because Ericsson wanted to split the Nokia and would not want to buy the consumer electronics sector. The Financial Times reported September 9 that Ericsson was deeply regretful about its decision a decade later, when Nokia had become the world's largest handset maker and Ericsson struggled in the consumer market.      Now the situation of both sides has been reversed again. After a major strategic debate, Nokia decided last week to follow Ericsson's footsteps and abandon its Consumer product division to focus on telecoms equipment.       The move has revived the most competitive rivalry between the European technology industry. "We've been keeping a close eye on Ericsson's movements and their business plans," said a former Nokia executive. Of course, we are far ahead of Ericsson in the mobile phone field, and I guess they're keeping up with us. "     Ericsson's decision to abandon the consumer product market has been effective, with its share price up 25% per cent over the past five years, while Nokia's share price fell by 71% per cent in the same period, even after a 34% jump in Tuesday.      Ericsson withdrew from the mobile phone market in 2011 when it sold its stake in Sony Ericsson, a joint venture, to Sony Ericsson. Analysts say the move makes Ericsson a dull but reliable company. And that's the strategy Nokia wants to emulate. Risto Slasma Risto Siilasmaa, Nokia's chairman and interim chief executive, said: "Ericsson's history is indeed more exciting.      Slasma added that the board had not discussed the development prospects of the new Nokia carefully. "To be honest, we haven't discussed the direction of strategic development in that area," he said. So far, the focus has been on equipment and service operations and their future. "     Nokia's telecommunications equipment business-Nokia Siemens Communications (NSN) has completed a difficult adjustment process. The sector, which has cut 17,000 employees in a deep restructuring over the past few years, is now the only company with the most profitable and highest sales.      NSN operating profit of 11 million euros in the first half of this year. But its basic operating profit is as high as € 524 million, which has adjusted its sales margin to 9.4% per cent, well above the handset sector-0.5% level.      Nokia's sales in the first six months of this year were 11.5 billion euros, which would reduce sales by about one-second per cent if the handset sector was roughly eliminated. But the company will still generate operating losses, dragged down by poor performance in the map sector, which will retain the sector, NSN and its own patent portfolio.      Investors seem satisfied with Nokia's new main direction: The company's share price rose 41% this week. "Nokia's troubled mobile phone business is the only reason for the company's dismal earnings and tight cash flow," Sami Salcames Sami Sarkamies, an analyst at the Nordic Union Bank, Nordbanken. "    " Now that these barriers have been removed, we expect investors to look squarely at Nokia's market position, the world's third-largest mobile network device provider, and a powerful patent portfolio – in other words, Nokia is equivalent to a slightly smaller Ericsson. "     NSN's profitability rally may reassure some people. But the NSN, which for most of the past six years have not been watched, will now be firmly in the spotlight. "Now NSN will be the core business of Nokia and will be closely watched," said one person involved in the Nokia sale of its mobile phone business. The