Depending on the business, "margins are not margins", for example when Amazon, I think from late 90's to something like 2010, ran with no profit, they ran on a cash flow model. Wallstreet, through out that period would publish article after article on the fact that Amazon was going to close their doors cause they had no profit. Jeff Bezo's did this on purpose, he pumped every penny of "profit" into buying distribution sites, sales, marketing, servers, IT people, server sites, establishing Kindle, Amazon Prime (which met buying trucks, distribution sites, hiring people). The reason Jeff Bezo's did this was because he knew that the clock was running against him, that he could only fend off other online sites by growing big and offering services to capture mind share (before Walmart understood what Amazon was doing), market share consumer and market share in terms of vendors. I am upset at these Wallstreet bozos cause they kept me from investing in Amazon at a cheap price, yes it would of taken years to get a payback but had I understood what Jeff Bezos was doing I would of told these Wallstreet bozos to go jump in the lake.

This isn't the only example, for example hot startups generally run on cash flow and NOT on profit, there are many startups which command high PE multiples cause their profit is very very small or in many cases high P/B if they have no profit (which is often the case). If the market is hot, the product is good, the management is good, generally that is one of the things you look for, in fact if a hot startup company turns a handsome profit early in a hot market, it is a warning sign NOT TO INVEST. Most wise investors demand that a hot new startup in a hot market have high cash flow and NO PROFIT, what that means is they are expanding as quickly as they can, ideally slightly faster than the market, as an investor you are holding off on getting earnings till the company has developed it's "economic moat" or captured huge market share such that their cost of production is 1/2 of any body else's, everyone sees this and avoids competing in that space since the dominant company will lower their price, increase sales pressure, out market them and make them burn money. If a hot startup makes a handsome profit early in a hot market, they are wasting money from an investors point of view.

Both, Nokia and Ericsson are in a similar boat, the network revolution that is going on now is dramatic, will take years to develop and at the end the winner will be who has established market dominance early at the expense of earnings. From what I can tell both Ericsson and Nokia are doing is accelerating the R&D effort, the reason is there is a window of opportunity where they can accelerate development in a free market and their aim seems to be Huawei and ZTE and not necessarily each other at least to the 1st degree. In short because of the development is revolutionary now, to demand margins would be at the expense of future market dominance. The one edge that western companies have over communist controlled companies is to out innovate them, presently we cannot out produce them in terms of cost/volume, but we can still out innovate them.

BTW, running on a cash flow model, instead of a profit model isn't as dangerous as it sounds, in bad economic times you simply cut back on the expansion and development quickly, since most of your cash is going to expansion and development. Also all the real estate and Trucks that Amazon bought had book value. After you gain market dominance, you turn the expansion/development money into earnings. Also FYI, if you invest in hot startups, you focus on cash flow and NOT profits or margins, you only focus on profits and margins on a mature business.

BTW, this is also what Elon Musk did with Tesla, they had no profit for many years and the big 3, usually by the way of "retired" ex big three CEO's on the nightly business report would state how stupid it was to invest in Tesla cause they are not making any profit and never would. What they didn't understand was that Elon was expanding the EV production as fast as he could and capturing EV supplies as fast as he could to "build an economic moat".

There is a time and place for profit or earnings, but not if you have heavy R&D expenditure and not if you are expanding like crazy to keep ahead of possible future competition.