Operating Profit Share by Top 10 Vendor in 2007
In a recent post I abstracted market share of handset units, revenue, and (pretax) operating profit for Q1 2008.
Q1 2008 Market Share: Handset Units and Revenue, and (PreTax) Operating Profit¹
¹ Positive only -- i.e. not netted down by Motorola's or 'Others" losses.
The Big Five Nokia Samsung SEricsson Motorola LG
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Units 235.9m 49.0% 19.6% 9.5% 11.6% 10.3%
Revenue $32.259b 45.4% 21.1% 13.2% 10.2% 10.1%
Op. Profit $4.701b 63.3% 23.0% 6,5% 0.0% 7.2%
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All Branded Vendors Nokia Samsung SEricsson Motorola LG Others
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Units 289.5m 39.9% 16.0% 7.7% 9.5% 8.4% 19.4%
Revenue $38.905b 37.6% 17.5% 11.0% 8.5% 8.4% 17.1%
Op. Profit $4.701b 63.3% 23.0% 6,5% 0.0% 7.2% 0.0%
Message 24540448
In doing so I noted that ...
Branded 'Others' revenue, and operating profit is strictly a guesstimate calculated from a guestimated ASP of $124 which I think is accurate within ±5%, but although a few 2nd tier niche players like RIM, Apple, HTC (partially unbranded) and possibly Sharp are quite profitable and sell high ASP units, the vast majority of 'other' players sell primarily on price at low ASP, and very few are profitable. On a consolidate basis they are probably selling at a loss which is why I plugged in zero profit.
The final line of the table is not accurate (should be ignored), since as noted, revenue and profit for vendors that in fact have positive profit (RIM, HTC, Apple, and a few others) should be added in. Strategy Analytics adressed that recently and calculated op profit of $19 billion and subsequent share by profitable vendor for calendar year 2007 with RIM, HTC, and Apple included ...
>> Profit Share by Handset Vendor in 2007 Vendor Share of Realized Profits in 2007
Nokia Samsung SEricsson LG RIM HTC Apple
========= ========= ========= ========= ========= ========= =========
56% 13.5% 11% 5% 6% 4% 2%
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Source: Strategy Analytics
>> Top 5 Handset Vendors Losing Ground to Rich Media Specialists
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Strategy Analytics Reports The Top Five Handset Vendors Are Experiencing Reduced Income While RIM, HTC and Apple Continue on the Upswing
Strategy Analytics (Boston)
01-May-2008
mobiletechnews.com
The Strategy Analytics Wireless Device Strategies service report, "Rich Media Specialists Increase Share Of Global $19 Billion Profits," reveals falling profits for the traditional top five handset vendors. Their share of industry profits has fallen from 92% in 2004 to 84% in 2007.
"The top 5 vendors may seem to be more dominant than 3 years ago but their income actually shrank," states Tom Kang, Senior Analyst in the Strategy Analytics Wireless Device Strategies service. "An internal focus of cost cutting and growing scale has drained off resources that should have been channeled into competitive assets for use in the new market landscape. It is no surprise that these same vendors are now struggling to find a viable strategy in this new market paradigm. RIM (Research In Motion) on the other hand has only 1% of the volume market, but was able to earn 6% of the industry profits, which raises them up to the number 4 spot."
"RIM has realized a 187% growth in profits over this timeframe and is redefining the competitive landscape of the global handset market along with Apple and HTC," adds Chris Ambrosio, Executive Director in the Wireless Practice at Strategy Analytics. "These rich media specialists have carved out a 16% share of industry profits in 2007 using a device appeal that is uniquely complemented by a powerful mix of value-added services, applications and rich-media presentation."
In addition Global ASPs have fallen at a 7% CAGR through 2007. The market catalyst vendors realize ASPs that are on average 250% higher than the industry average.
Profit Share by Handset Vendor in 2007 Vendor Share of Realized Profits in 2007
Nokia 56% | Samsung 13.5% | Sony Ericsson 11% | LG 5% | RIM 6% | HTC 4% | Apple 2%
Source : Strategy Analytics strategyanalytics.net ###
- Eric - |
