Wireless stocks suffered a setback Monday after Motorola ( MOT) admitted its Asian business is wilting.

The bad news for the sector is that Motorola isn't the first big cell phone player to have warned of weakening sales in the Far East. The good news, such as it is, is that Motorola is Motorola -- which is to say that at least some of the problems appear to be the fault of poor management rather than a regional slowdown.

With that in mind, investors held a steady course Monday on Nokia ( NOK), which makes most of its money in Europe, where growth has been stronger and SARS hasn't taken root. On the downside, the Asian problems had some investors worrying about the current quarter at Qualcomm ( QCOM), a leading supplier there.

Early Monday, Motorola blamed this spring's pneumonia epidemic and the company's outdated phones for weak sales in Asia. The slack demand caused the wireless gearmaker to lower its second-quarter profit estimate to breakeven while slashing its revenue estimate by $400 million to $6.1 billion.

More than a quarter of Motorola's revenue is generated in China, where sales are 30% below year-ago levels. With TriQuint Semiconductor ( TQNT) having issued similar comments Friday, many observers see evidence that supply in the phone and component areas have been running well ahead of demand.

Observers expect that what's bad for Motorola in China is also bad for its chip and parts suppliers Qualcomm, RF Micro Devices ( RFMD) and Skyworks ( SWKS). Qualcomm shares fell 33 cents, or 1%, to $33.22 in midday trading Monday, while RF Micro and Skyworks each fell 6%.

Bucking the trend, Nokia rose 1% Monday as investors drew a better picture for the Finnish tech giant, which has little exposure to Asia.

"China is 28% of Motorola's sales and only 12% of Nokia's," notes Sanford Bernstein analyst Paul Sagawa. "Meanwhile, Europe is growing at a midteens pace year over year and is 50% of Nokia's sales and only 15% of Motorola's."

In short, says Sagawa, "Nokia's European strength overwhelms China weakness. It's just the opposite of Motorola."

But not all is sunny for Nokia.

Investors are bracing for a midyear update from the handset king Tuesday. Some investors say the company is likely to temper its previous guidance due to continued weakness in its wireless network infrastructure business. The same pressures will likely apply to Ericsson ( ERICY), which has been struggling with a drop-off in demand for network upgrade gear.

While the timing of the SARS outbreak could hardly have been worse for the wireless equipment industry, which is well along in its efforts to rapidly expand Asian production, Motorola brings a few problems of its own to bear.

In true Motorola fashion, the company once again finds itself inexplicably behind the curve in key technological trends.

You may recall in the mid-1990s, when the U.S. wireless market switched to digital phones, Motorola was steadfastly cranking out analog models. Similarly, today Motorola seems to have repeated that strategic brilliance, offering millions of black-and-white screen phones to Chinese shoppers, who by now are looking for color-screen models.

Motorola says it will have new color-screen phones available in China this fall.

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