The Handset Share Game: Q2 2006 (Preliminary)
Strategy Analytics (SA) has posted their preliminary estimate of Q2 unit sell-in sales and share. They see global shipments at 235.3 million units on a preliminary basis, 10 million units ahead of consensus up 22.5% YOY and 4.3% sequentially¹. Their estimate of Q2 handset unit sales exceeds pre-earnings consensus estimates by 10 million units which is healthy for the sector.
¹ Please note that between 1st publishing their Q1 estimates in April, and finalizing them on May 30, SA reduced Q1 shipments from 228.9m to 225.3m by reducing shipments by 'others' from 49.8m to 46.6m.
SA still sees 1 Billion unit handset sell-in this year (and so does IDC).
"The cellphone market is growing to a billion units this year. Some 461 million phones were sold in the first half." - Neil Mawston, Strategy Analytics -
Inexplicably Nokia "continues to expect the mobile device market volume to grow by 15% or more in 2006, from their estimate of approximately 795 million units in 2005" -- i.e. > 915 million units, which is abnormally conservative. Headlines in recent days have read ...
Earnings Rise, but Nokia Market Share Slips
The press didn't make that up, Nokia did, but they underestimated the market size in Q1 and as a consequence overstated their Q1 share which remained unchanged in Q2 according to SA (and down 1/10th of a pt. according to IDC), and while they came in on the nose of consensus estimates set for them in Q1, Moto and Sony Ericsson exceeded consensus expectations and caught all of the upside that some thought Nokia might share in, if it was available.
There is no question but that Motorola was the big winner QoQ and YoY. They had a sensational quarter. Neil Mawston of Strategy Analytics commented ...
"Motorola has recorded an average 52% annual growth over the last four quarters, while Nokia has averaged 32%. If Motorola can continue this breakneck pace - a stretch, but not totally inconceivable given the strength of their core designs - it would overtake Nokia in the first half of 2007. The stars would need to align for Motorola on additional new products, 3G, and component supply, but this should be a strong warning for Nokia which should feel pressure to more rapidly improve both entry- and mid-tier product offerings in terms of both designs and numbers."
What Neil knows, but didn't say is that Q2 is never a strong quarter, and they focus on Q4 where the challengers have traditionally executed poorly, while Nokia executes close to flawlessly, so the stars would have to align.
Sony Ericsson had a fine quarter and they bumped LG out of the 4 slot for both Q2 and H1, and this is the 1st time they have been in the 4 slot for 2 years. Nokia continued to hold share and increase it YoY while maintaining industry leading handset margins, but Samsung continues to lose share and margin and the share gap between Motorola (22%) and Samsung (11%) is the widest since 1999. The share gap between Nokia and Motorola is also the narrowest it has been since 1999. LG is flat YoY and down QoQ with negative margins, but the big losers are BenQ and others including the Japanese and Chinese.
I've taken several cuts at the Strategy Analytics numbers and tacked on IDC's Q2 view which I think credits 'Others' with unit sales that are too high by several million.
Strategy Analytics View of Handset Sales and Share
Strategy Analytics Q2 YoY Global Shipments and Market Share Estimates
·
Q2 2006 Q2 2006 Q2 2005 Q2 2005
Unit Market Unit Market YOY
Vendor Shipments Share Shipments Share Change
----------------- ---------- --------- ---------- --------- ---------
Nokia 78.4m 33.3% 60.8m 32.5% 28.9%
Motorola 51.9m 22.1% 33.9m 18.1% 53.1%
Samsung 26.3m 11.2% 24.4m 13.0% 8.2%
Sony Ericsson 15.7m 6.7% 11.8m 6.3% 33.1%
LG Electronics 15.3m 6.5% 12.1m 6.5% 26.4%
Others 47.7m 20.3% 44.2m 23.6% 7.9%
----------------- ---------- --------- ---------- --------- ---------
Worldwide Total 235.3m 100.0% 187.2m 100.0% 22.5%
=====================================================================
·
Strategy Analytics CY2005 and H1 2006 Handset Sell-In and Share
·
CY2005 2005 ¦¦ Q1 06 Q1 06 ¦ Q2-06 Q2-06 ¦¦ H1 05 H1 05
Company Units¹ Share¹¦¦ Units¹ Share¹¦ Units Share ¦¦ Units Share
======= ===== ===== |¦ ====== ===== ¦ ====== ===== ¦¦ ====== =====
Nokia 264.9m 32.4% ¦¦ 75.1m 33.3% ¦ 78.4m 33.3% ¦¦ 153.5m 33.3%
Motorola 146.0m 17.9% ¦¦ 46.1m 20.4% ¦ 51.9m 22.1% ¦¦ 98.0m 21.3%
Samsung 102.9m 12.6% ¦¦ 29.0m 12.8% ¦ 26.3m 11.2% ¦¦ 55.3m 12.0%
LG 54.9m 6.7% ¦¦ 15.6m 6.9% ¦ 15.3m 6.5% ¦¦ 30.9m 6.7%
SEricsson 51.1m 6.3% ¦¦ 13.3m 5.9% ¦ 15.7m 6.7% ¦¦ 29.0m 6.3%
Others 197.2m 23.5% ¦¦ 46.6m 20.6% ¦ 47.7m 20.3% ¦¦ 94.3m 20.5%
------ ------ ¦¦ ------ ------ ¦ ------ ------ ¦¦ ------ ------
Total 817.0m 100.0% ¦¦ 225.7m 100.0% ¦ 235.3m 100.0% ¦¦ 461.0m 100.0%
=========================================================================
·
Strategy Analytics 12 Month Global Shipments and Market Share Estimates
Global YoY
Sell-In Q2 '05 Q3 '05 Q4 '05 2005 Q1 '06 Q2 '06 Gain / Loss
========== ====== ====== ====== ====== ====== ====== ===========
Nokia 60.8m 66.6m 83.7m 264.9m 75.1m 78.4m 17.6m 28.9%
32.5% 31.7% 34.1% 32.4% 33.3% 33.3% +0.8 ppt.
---------- ------ ------ ------ ------ ------ ------ -----------
Motorola 33.9m 38.7m 44.7m 146.0m 46.1m 51.9m 18.0m 53.1%
18.1% 18.4% 18.2% 17.9% 20.4% 22.1% +4.0 ppt.
---------- ------ ------ ------ ------ ------ ------ -----------
Samsung 24.4m 26.8m 27.2m 102.9m 29.0m 26.3m 1.9m 8.2%
13.0% 12.8% 11.1% 12.6% 12.8% 11.2% -1.8 ppt.
---------- ------ ------ ------ ------ ------ ------ -----------
SEricsson 11.8m 13.8m 16.1m 51.1m 13.3m 15.7m 3.9m 33.1%
6.3% 6.6% 6.6% 6.3% 5.9% 6.7% +0.4 ppt.
---------- ------ ------ ------ ------ ------ ------ -----------
LG 12.1m 15.5m 16.2m 54.9m 15.6m 15.3m 3.2m 26.4%
6.5% 7.4% 6.6% 6.7% 6.9% 6.5% flat
---------- ------ ------ ------ ------ ------ ------ -----------
Others 44.2m 48.8m 57.6m 197.2m 46.6m 47.7m 5.2m 26.4%
23.6% 23.2% 23.5% 24.1% 20.6% 20.3% -3.0 ppt.
========== ====== ====== ====== ====== ====== ====== ===========
Total 187.2m 210.2m 245.5m 817.0m 225.7m 235.3m 48.1m 22.5%
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% -
========== ====== ====== ====== ====== ====== ====== ===========
Growth YoY 17.6% 25.5% 24.9% 20.1% 29.6% 25.7% 22.5%
============================================================================
SA PR here ... tinyurl.com
IDC's View of Q2 2006 Sales and Share
... has 'Others' higher than SA's by alomost 3 million.
IDC Q2 YoY Global Shipments and Market Share Estimates ¹
·
Q2 2006 Q2 2006 Q2 2005 Q2 2005
Unit Market Unit Market YOY
Vendor Shipments Share Shipments Share Change
----------------- ---------- --------- ---------- --------- ---------
Nokia 78.4m 33.0% 60.8m 31.3% 28.9%
Motorola 51.9m 21.8% 33.9m 17.5% 53.1%
Samsung 26.3m 11.1% 24.4m 12.5% 8.2%
Sony Ericsson 15.7m 6.6% 11.8m 6.1% 33.1%
LG Electronics 15.3m 6.4% 12.1m 6.2% 26.4%
Others 50.2m 21.2% 51.2m 26.4% -2.1%
----------------- ---------- --------- ---------- --------- ---------
Worldwide Total 237.8m 100.0% 194.1m 100.0% 22.5%
=====================================================================
·
IDC Q2 QoQ Global Shipments and Market Share Estimates ¹
·
Q2 2006 Q2 2006 Q1 20065 Q1 2006
Unit Market Unit Market QoQ
Vendor Shipments Share Shipments Share Change
----------------- ---------- --------- ---------- --------- ---------
Nokia 78.4m 33.0% 75.1m 33.1% 4.4%
Motorola 51.9m 21.8% 46.1m 20.3% 11.2%
Samsung 26.3m 11.1% 29.0m 12.8% -9.3%
Sony Ericsson 15.7m 6.6% 13.3m 5.9% 18.0%
LG Electronics 15.3m 6.4% 15.6m 6.9% -0.2%
Others 50.2m 21.2% 47.6m 21.0% 5.5%
----------------- ---------- --------- ---------- --------- ---------
Worldwide Total 237.8m 100.0% 226.7m 100.0% 22.5%
=====================================================================
¹ Source: IDC Worldwide Quarterly Mobile Phone Tracker, July 20 2006
Note: Vendor shipments are branded shipments and exclude OEM sales
>> Mobile Phone Shipments Continue Robust Growth in the Second Quarter, According to IDC
Will 2006 Be a Billion Unit Year?
IDC PR
Framingham, MA
July 20, 2006
idc.com
After an impressive first quarter, worldwide mobile phone shipments fell just short of an all-time high in the second quarter of 2006 with volume of 237.8 million units. The robust quarter was enough to boast a 2.1% increase from the first quarter, and 22.5% more than the same quarter one year ago. According to IDC's Worldwide Mobile Phone Tracker, 470.7 million units have shipped so far in 2006, which suggests that the industry may be close to shipping 1 billion units for the full year.
"The industry has been eyeing the milestone of 1 billion handsets shipped in a single year for some time, and many believe 2006 will be the year it happens. However, while the first half of the year has been impressive, IDC does not see this milestone being surpassed this year," said Ryan Reith, research analyst for IDC's Mobile Phone Tracker. "Although the demand for handsets in emerging markets continues to soar, the market's surging growth rate has been balanced by slowing demand in select mature markets."
While the majority of handset shipments were made up of entry-level devices, the second quarter also witnessed strong growth in handsets capable of utilizing bulked-up, third generation network infrastructure. With EV-DO and UMTS now common in the many regions throughout the world, 3G networks and services are becoming an increasingly significant part of the mobility world. The presence of established high-speed networks has resulted in the introduction of new handsets capable of video conferencing, internet access at broadband speeds, and real-time content sharing, all of which drove increased demand during the second quarter.
"With a number of carriers marketing subscription services that take advantage of 3G's advanced capabilities, all of the major vendors are now offering 3G-compatible devices across multiple regions," added Reith. "There has been much talk about 3G being a standard, but that could only become a reality when carriers were able to market services that were appealing to consumers. With competitive services in place to drive usage on mobile phones for applications beyond voice, handset vendors are putting an increasing amount of resources into 3G handsets. Nevertheless, lower-end devices still make up the majority of the market."
Vendor Highlights (IDC)
• Nokia. The second quarter proved to be another impressive quarter for Nokia as they posted 4.3% growth from the previous quarter and a 28.9% increase from one year ago, with an industry-leading 78.4 million units shipped. So far in 2006, Nokia has enjoyed the success of both the E-series and N-series device lines. Several product announcements during Q2 show that the E-series and N-series have the longevity to drive Nokia as an industry leader for some time. The worldwide leader in 3G handset shipments has leveraged these high end lines to continue as the leader in the next-generation technology, while not losing site of the important role they play in supplying entry level devices in emerging markets.
• Motorola. The continued popularity of The RAZR produced another record quarter for Moto – the company's fifth straight – with 51.9 million handsets shipped. This was a sequential increase of 12.5% over 1Q06 and 53.1% growth from one year ago. The big surprise came from iDEN shipments, as Motorola announced a record quarter of shipments driven by new product releases in the first half of the year.
• Samsung. The Korean based company took a 9.4% quarter-over-quarter decrease in 2Q06, with the majority of the loss coming from the EMEA region. With a number of 3G UMTS handsets launching across multiple regions in the second quarter, the time required for consumer adoption took a toll on device shipments. Despite the decrease in shipments from last quarter, Samsung did increase shipments into Asia/Pacific and the Americas, and worldwide shipments were up 8.2% from a year ago.
• Sony Ericsson. The second quarter of 2006 proved to be a strong one for Sony Ericsson as it posted 33.1% year-over-year growth, passing LG Electronics to become the number 4 handset vendor worldwide. The company continued to build on the success of its Walkman-branded phones by launching a number of new devices, including the first UMTS Walkman phone (the W900), and announcing the W850, which will also be UMTS capable.
• LG Electronics. A 1.7% decrease from last quarter was felt primarily in LG's CDMA handset shipments. In North America, which has historically been a strong region for LG, shipments dropped from 6.5 million units in Q1 to 4.3 million units in Q2. On a positive note, LG shipments of WCDMA handsets went up 170.0% in Q2, and HSDPA handset shipments into Europe, coupled with newly announced plans to ship into the U.S., accounted for the company's growth. Worldwide shipments were up 26.4% year on year – slightly ahead of total market growth. <<
Caveats
The usual apply. I may have made typos, transposition errors, or calculation errors in compiling and abstracting the data in this post. If anyone spots any. please advise.
Other Metrics
I'll be adding comparative revenue and revenue share, margins, ASP, share by technology etc., in a future post after I audit this one with a clear head.
- Eric - |
