Summary
Nokia deal in China is not a surprise. It is an ongoing business relationships since 1998 between Nokia and Postel. The lower value of this year deal may signal the space Postel is saving for the coming iPhone launch towards the second half of the year
Analysis
Having a $2Bn deal in the booming cellular market in China is a dream for any cellular manufacturer. However, when we analyze the details we see no more than continued blanket order spread along CY 2008 between a provider (Postel) and a manufacturer ( Nokia).
More than that, we would expect a higher value deal due the Olympic games to commence in August where a demand for live broadcasting will skyrocket. One reason can be the lower ASP ( Average Selling Price) per unit, but another perspective can mark a new market strategy to allow space for the coming iPhone. Of course, iPhone sales are expected to be just a fracture of Nokia sales but the public relations and the built expectation for the coming launch will take its toll from the existing rivals.
iPhone can perfectly match the needs of the street user wish to watch the Olympic games as it combines excellent live video and audio plus the prestige of holding Apple made device. At the end of the day, there still enough space for iPhone despite the Nokia deal, and we can expect lower value deal for Nokia in CY 2009.
