Handsets Up, Infrastructure Down

Nokia and Ericsson both posted their third quarter results this week and as with most of the industry, there is good news and bad news. First the bad news, infrastructure heavy Ericsson is still taking a beating with sales and equipment orders down a third from the the same period last year. The company plans to continue restructuring efforts to better deal with the uncertain market for telco infrastructure. On the other hand, Nokia reported increased revenues, operating margin, and global market share for it's core handset business. What's going on here? It would seem that while network spending has gone down, people are still upgrading handsets. While the industry struggles with the killer data application and expensive sprectrum licenses, consumers still want the latest handsets. This is good new for carriers. It means they don't need to rush to 3G (unless of course they are being forced to by local regulators or are in dire need for additional voice capacity), and can focus on making the most from their 2.5G investments.