Riddle of the Day: R&D

Just a thought but…how come Nortel is still spending close to $1.9-billion a year on R&D when it’s apparently looking to focus on businesses with at least 20% market share. You would think that R&D would be among the areas where CEO Mike Zafirovski’s cost-cutting program would have tackled already.


2 Responses to “Riddle of the Day: R&D”

  1. jack_bauers_evil_twin Says:


    I think that your though that Nortel is “… looking to focus on businesses with at least 20% market share” is incorrect.

    Unless there’s been a change in wording since the Nortel press release of March 10, 2006, the goal is to be in markets where “… the company can achieve a leadership position and at least 20 percent market share.”


    That statement from the March 10 PR applies to current and future products, so if Nortel management believes a new product can achieve 20% market share, then it will continue to receive R&D funding.

    They may not actually be cutting R&D dollars, but simply redirecting them.

  2. Bubbles Says:

    NT boasted cutting this least efficient R&D for how many months? Then they didn’t cut a thing. They cut products instead. A fine move cutting product right after everyone was included in BT’s $19B-$24B tender but them claiming this was because they had no product.

    Their last large order, years ago, was another failed gamble, BSNL.

    There is no Neptune, Titan, Dolphin, or Putian, Huawei partnership as others merge creating a smaller market with greater competition.

    Even LG furnished “no substantial returns” as they learn lessons… addressing markets others lead…

    Why should this gamble of redirecting funds into R&D work now any better than their endless traditional hype, like this Microsoft old news partnership that market already spoke on. MSFT uses other players too, described well in this article: http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B9D898B31%2DA37F%2D4D7E%2DA2DF%2DA83C8A201AB7%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

    They now sell 25% of their business/revenues on UMTS, have you seen any interest/takers? They already sole their manufacturing and the last of their assets.http://finance.yahoo.com/q/bs?s=NT&annual

    (NOTE: what 10B SALES -(1.606B+737M last of assets)

    They had to increase debtors collateralization by 50% due to most recent initially downplayed revisions they simply printed paper for(10% on $2B bonds that are B3 rated and unsecured beyond NNL) The fraud costs them zero printing paper but they still keep their bonuses even though the numbers get worst every time they count them.

    Their greatest asset is a tax credit they will never use to make their books look good…

    it is endless, kindly excuse my holding this company enormously suspect, I can go on forever… it is endless. Their morale as well as their fundamentals, a disheartening poetic justice…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: