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TWST: Let’s start off with what’s been going on most recently. Who are the major players and what’s the situation as it stands right now?

Mr. Brau: The big news is the Ericsson (ERI.MI) second quarter. You’ve got four large telecommunications equipment plays plus you have Siemens (723610.FX), which is a conglomerate but has a major telecommunications equipment company in there, and they’re active in a lot of different areas. Lots of stuff is going on in wireless; it’s going on in optical and it’s going on in ATM and IP.

TWST: What do you see as being the #1 development that will spark change or instigate some kind of movement within this sector over the next six to twelve months, be it technological or financial?

Mr. Brau: I would way, well, six to twelve months --

TWST: Do we need to look further than that?

Mr. Brau: Yes. I think the main shift is going to be the buildout of the 3G networks and who wins all the contracts. In six to twelve months, we’ll have a good idea of how the different companies are doing in terms of announced contracts. I don’t think it will come as a huge surprise. Ericsson will be #1, Nokia will be #2, but that will be confirmation. That will probably be the biggest impact on the mobile infrastructure side and the handset side. People are waiting for wireless data and WAP to really take off. There’s been a huge amount of hype. Now there’s backlash and, then, the question is: what’s going to turn that around? So people are saying, well, once GPRS phones are available, this is the always-on technology, you’ll see wireless data take off. I think that’s going to be very important, because if it doesn’t take off, then all the forecasts made for 3G networks will have to be revisited. So I think that it will be very important to see how all of these mobile Internet applications work when you finally have phones that are user friendly, as opposed to the current phones, which end up being kind of unwieldy and not a good way to access the Internet.

TWST: From an investor standpoint, looking at these long term, does that mean that Nokia is one of the only realistic options at this point, or is Motorola just as solid of a buy?

Mr. Brau: In mobile phones, I think Nokia (870737.FX) is the only realistic option. Motorola (853936.F) makes a lot of money on royalty payments in GSM phones. We don’t know how big they are, I just happen to know that they’re quite large, so Motorola ends up making a good profit, basically, because everyone phone company in the world has to pay them a royalty every time they produce a GSM phone. Motorola does not have its position in 3G. Now, in the long term, if you have a dual- mode phone, which has both the GSM and 3G, Motorola is still going to make some money, but I think the main thing is that Motorola has never really understood what it means to be a consumer products company. I think it’s very interesting that four years ago, maybe even only three years ago, Motorola had something like 60% market share in the US. Now, Nokia, in every standard except for CDMA, has around 50% market share in the US, and for Motorola to have fallen in its home market that far, is pretty bad news. Someone’s got to be #2, and it looks like Motorola is going to be #2 by default, but I don’t necessarily see them challenging or threatening Nokia. I also see Motorola having a tough time when 3G is introduced and Motorola is figuring out how to manage a product line when you have all these new standards coming out, like the GPRS next year, followed by 3G, and you have to basically -- it’s like spinning lots of plates at the same time and you have to keep them all in the air. Nokia’s the only company that’s really demonstrated it can do that. No one else has really figured out how to do it properly, and it’s just going to become more complicated in a couple of years.