In the terminal sales forecasts, an average handset lifespan, calculated from historical terminal sales and renewal churn rates, is applied to a Poisson (normal) distribution curve which determines the rate at which handsets are renewed over time. This renewal factor is combined with the anticipated subscriber net gains as calculated from the cellular subscriber forecasts to produce the terminal sales forecasts.
Somewhere somebody inverted his Poisson distribution. EMC has net sub adds of 297M for 2001, our current industry consensus (analyst + vendors) h.s. sales estimate is somewhere around 400MM for 2001, let's say 407MM, which implies a mere 110MM replacement sales, on a BoY 728MM base. Nah, don't believe a nearly 7-year average in use life for a handset, and it's even more skewed if you take into account churn.
Something in these numbers looks fishy to me. (Would the French say "poisson-ly"?)
Although it's always fun to believe some cheery market research report, I'll stick with the vendor forecasts, +/- 5%. Or, Eric, is there something EMC knows that Nokia doesn't? |
