Our initial reaction is that the shares are likely to tread water during what is likely to be a difficult transition in its attempt to outsource 100 percent of its handset production and as its networks operator's division goes through temporary growing pains, which are likely to weigh on margins.

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It is due to the scarcity value.

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The main concern regarding Ericsson is its mobile systems division, which is experiencing slower growth in the U.S. and marginally disappointing growth in Europe.

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Clearly, the risk has increased, particularly with the current economic situation. However, we believe that Nokia's superior supply-chain management and its ability to reach the end market will keep it ahead of its peers.

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