Mark - & others who have commented on the PC Data:
FWIW (and because I like doing this kind of stuff), I took a look at HAND/PALM market shares from overall data available from the two companies, and reached quite different numbers more in line with what we might have thought. I used the information from PALM's Q4 (March-May) vs HAND's Q4 (April/June) - not quite the same Q but almost certainly biased in HAND's favor since it assumes a flat June for PALM but includes HAND's strongest month.
(1) PALM sold 1.1 million units in the Q4 at an average selling price (ASP) to PALM of $260 to $283 (depending on which Bruner number I use).
(2) Using the PC Data relative market shares of the HAND Visor Deluxe (25% share) selling retail for $249 and the Visor Basic (13% share) selling for $179, I derived an average retail price (ARP) of $225.
(3) Assuming an ASP/ARP ratio of 0.60 (low) to 0.67 (likely) for HAND, I derived an ASP to HAND of $135 to $150.
(4) With HAND's $51.8 million in sales for the Q4, this translates into a likely 345,000 units (using $150) to a max of 383,000 units (using $135).
(5) Allowing 4% market share for the HP Jornada's leaves 96% for PALM/HAND.
(6) 1.1 million units for PALM and 0.345 million units for HAND gives PALM's market share at 73% and HAND's at 23% (likely).
(7) 1.1 million units for PALM and 0.383 million units for HAND gives PALM's market share at 71% and HAND's at 25% (max).
73% for PALM and 23% for HAND overall market share is nearer what I would expect than the 58%/38% market share derived from the PC Data numbers quoted in the published article.
Note that the only real assumption in the above is the 0.67 ASP/ARP ratio. Is this reasonable? Well apply it to PALM's $260/$283 ASP and you get $388/$422 ARP which is close. Use the 0.6 ratio for PALM and you get ARP's of $433/472 which is high.
Doing the calculation in reverse to try and reach the 58%/38% market share derived from PC Data's retail sales share results in 720,000 units for HAND at an ASP of $72. There's no way HAND has an ASP of $72 and an ARP of $225, that's an ASP/ARP ratio of only 32%, and a distributer/retailer markup of over 200%!
Overall, I'll stick with the 73%/23% market share result. Note that nowhere in HAND's IPO prospectus or quarterly earnings report do they actually come out and say how many units they've sold and at what ASP.
I also note HAND's gross margin of 31% for Q4 vs PALM's 39%, when PALM introduces it's lower price point model in the next few weeks, HAND's GM is going to come under some pressure. Chimp HAND has had this part of the market to themselves so far, let's see how they do when the budding gorilla PALM comes barging into their market!
David T. |
