The Handset Game: The Quarter that Was
With Sony Ericsson's report published, Strategy Analytics (SA) has published its preliminary estimates of Q1'07 global mobile handset shipments and states:
Global mobile phone shipments grew a sluggish 12 percent year-over-year, to reach 252 million units in Q1 2007. This was the first quarter in almost 2 years that annual growth has been below the 20% mark.
Neil Mawston, Associate Director at Strategy Analytics said, “Worldwide cell phone shipments have been growing at an average annual rate of 25% over the past 6 quarters. While Q1 growth is seasonally slower, the 12 percent growth registered in the first quarter of 2007 is markedly down on that longer-term trend.”
Bonny Joy, Analyst at Strategy Analytics, added, “A moderate buildup of inventory in Q4 2006 led to weaker shipments during Q1 2007. We estimate a sizeable 9 million units of excess inventory were sold off worldwide during the first quarter. Looking ahead to the second quarter, we expect more stock to be cleared from channels and the supply chain should eventually return to normal levels early in the second half of the year.”
They also noted:
• Samsung rebounded with strong volumes, while LG strengthened its profit margins. These are tentative signs that the big Korean players are on the verge of a comeback.
• Nokia widened its market share lead over Motorola to 18 percentage points in Q1 2007. This is the largest gap between the two since Q4 2003
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In Q1'07 Nokia sold 2.1x the number of mobile handsets as its next nearest competitor (Motorola) and had twice their revenue sales. They continue to enjoy industry leading margins but both Sony Ericsson and Samsung also enjoyed double digit operating margins in Q1.
The quarter was really healthier than it appears. It is now apparent that there was considerable inventory in channels entering the quarter. Much not all of it, Motorola's. and Samsung probably had the least. Subsequent quarters with the possible exception of Q4 will likely have better than the 11.5% YoY increase exhibited in this quarter and for the year 12% to 14% is likely to be the range of growth in unit sales this year and that translates into 1,125 million 1,155 units that will ship into channels this year.
As I somewhat expected, SA adjusted downwards its sales by 'Others' for both Q1 and Q4 2006 (and probably Q2 and Q3 although not shown) since originally publishing last years preliminaries and recalculated share for those quarters and 2006. Their total 2006 sell-in estimate was reduced by 4 million. Nokia's 2006 share was increased. The table below is updated to include these changes.
Global Mobile Device Sell-In for Last 18 Months
Global
Sell-In Q4 '05 2005 Q1 '06 Q2 '06 Q3 '06 Q4 '06 2006 Q1 '07
========= ====== ====== ====== ====== ====== ====== ====== ======
Nokia 83.7m 264.9m 75.1m 78.4m 88.5m 105.5m 347.5m 91.1m
34.1% 32.4% 33.2% 33.3% 34.5% 35.7% 34.2% 36.2%
--------- ------ ------ ------ ------ ------ ------ ------ ------
Motorola 44.7m 146.0m 46.1m 51.9m 53.7m 65.7m 217.4m 45.4m
8.2% 17.9% 20.4% 22.1% 21.0% 22.2% 21.4% 18.0%
--------- ------ ------ ------ ------ ------ ------ ------ ------
Samsung 27.2m 102.9m 29.0m 26.3m 30.7m 32.0m 118.0m 34.8m
11.1% 12.6% 12.8% 11.2% 12.0% 10.8% 11.6% 13.8%
--------- ------ ------ ------ ------ ------ ------ ------ ------
SEricsson 16.1m 51.1m 13.3m 15.7m 19.8m 26.0m 74.8m 21.8m
6.6% 6.3% 5.9% 6.7% 7.7% 8.8% 7.4% 8.7%
--------- ------ ------ ------ ------ ------ ------ ------ ------
LG 16.2m 54.9m 15.6m 15.3m 16.5m 17.0m 64.4m 15.8m
6.6% 6.7% 6.9% 6.5% 6.4% 5.8% 6.3% 6.3%
--------- ------ ------ ------ ------ ------ ------ ------ ------
Others 57.6m 197.2m 46.9m 47.7m 47.0m 49.4m 192.6m 43.1m
23.5% 24.1% 20.7% 20.3% 18.3% 16.7% 19.0% 17.1%
========= ====== ====== ====== ====== ------ ------ ------ ------
Total 245.5m 817.0m 225.7m 235.3m 256.2m 295.6m 1,014.7m 252.0m
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
========= ====== ====== ====== ====== ====== ------ ------ ------
Growth YoY 24.9% 20.1% 29.6% 25.7% 21.9% 22.0% 24.7% 11.5%
Key Mobile Device Metrics for Q1 2007
Nokia¹ Motorola Samsung SEricsson LG
========== ========== ========== ========== ==========
Revenue (EUR) €8,161 Bil €4.061 Bil €3.491 Bil €2,925 Bil €1.781 Bil
Revenue (USD) $10,876 Bil $5.412 Bil $4.652 Bil $3,898 Bil $2.374 Bil
Units 91.1m 45.4m 34.8m 21.8m 15.8m
Share 35.2% 17.1% 13.1% 8.7% 6.1%
ASP (EUR) €89 €89 €116 €134 €113
ASP (USD) $119 $119 $155 $179 $150
Op. Margin 16.2% -4.8% 13.0% 11.8% 4.7%
·
¹ Nokia combines 3 divisions sales: Mobile Phones, Multimedia Enterprise
Notes:
• All currency conversions made at March 30, 2007 Interbank rates.
Caveat:
• The usual applies. I may have inadvertently made typos, transposition errors, currency conversion errors, or calculation errors in compiling data. If anyone spots one, please advise.
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- Eric - |
