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To: Eric L who wrote (3099)	8/1/2003 9:44:18 AM
From: Eric L	Read Replies (1) \| Respond to of 9255

IDC's Worldwide Handset QView for Q2 03 Exhibits below are from the current IDC press release linked below with Q1 shipments plugged in from their press release of 3 months prior. IDC Top 6 Vendors, Worldwide Handset Shipments · Rank Vendor 2Q 2003 2Q 2003 1Q 2003* Shipments Market Share Market Share · 1. Nokia 40,906,111 34.6% 35.5% 2. Motorola 15,800,000 13.4% 15.5% 3. Samsung 12,000,000 10.1% 12.3% 4. Siemens 8,100,000 6.8% 7.4% 5. Sony Ericsson 6,700,000 5.7% 5.0% 6. LGE 5,300,000 4.5% 5.2% Other 34,814,136 24.9% 19.1% =========== Total 1l8,320,247 · * IDC had Q1 shipments at 107.6 million units. Notes: Vendor shipments are branded shipments and exclude OEM sales for all vendors. · Top 5 Vendors, Worldwide Converged Device (Smartphone) Shipments · Rank Vendor 2Q 2003 2Q 2003 1Q 2003* Shipments Market Share Market Share · 1. Nokia 1,200,000 61.0% 57.3 % 2. Sony Ericsson 200,000 10.2% 11.1 % 3. Motorola 115,000 5.8% 7.4 % 4. RIM 89,964 4.6% - 5. Kyocera 51,000 2.6% - ? Samsung 5.1% ? Handspring 4.1 % Other 310,741 15.8% 14.9 % ========= Total 1,966,705 · * IDC had Q1 shipments at 1.76 million units QView Highlights * Nokia - Nokia maintained its market share this quarter and is strengthening its presence in the U.S. and global CDMA markets. In addition, close to one-third of all Nokia phones shipped in the quarter had color screens, multimedia capabilities and a growing number included digital cameras. * Motorola - Motorola's market share dropped in 2Q03 to 13.4% from 17.4% one year ago due mainly to stiff competition in Europe and Asia. Motorola has shipped just 9 new models so far in 2003 and is only just beginning to ship cameraphones. * Samsung - Through an aggressive product strategy, its success in the CDMA market, and a growing GSM presence, Samsung increased [?] its market share to 10.1% and continued to close the gap on Motorola. [? IDC had Samsung at 12.3% market share Q1 so Samsung's sales as well as Motorola's and their market share both decreased and the gap between actually increased]. * Sony Ericsson - Buoyed by the success of its T610 in Europe and its cameraphone efforts in Japan, Sony Ericsson re-entered IDC's top 5 list as it grew its market share to 5.7%. * Converged Handheld Devices - With 61.0% share, Nokia continued to dominate the converged handheld device market in 2Q03. Handspring relinquished its position among the top 5 vendors due to an aging product line, while RIM and Kyocera established themselves as the number 4 and number 5 converged device vendors. >> Second Quarter 2003 Worldwide Handset Shipments Increased More Than 19% Year- Over-Year, IDC Says IDC Framingham, Mass. July 31, 2003 prnewswire.com The worldwide market for handsets took off in the second quarter of 2003, reflecting continued consumer demand for mobile telephony. According to IDC's Worldwide Handset QView, worldwide handset shipments grew by 19.2% year-over-year in 2Q03 and increased sequentially by 6.7% to 118.3 million units. Nokia maintained its top position in the market while Sony Ericsson regained the number 5 spot from LG Electronics. "Despite continued economic uncertainty worldwide, the threat of SARS, and concerns of terrorism, the mobile phone market recorded impressive results this past quarter," said Ross Sealfon, research analyst in IDC's mobile device program. "After remarkable success in Japan, cameraphones are attracting worldwide interest, and coupled with color displays and subsidized pricing, the overall mobile phone market is seeing significant growth in 2003." Within the volume of worldwide handset shipments, the market for converged handheld devices, or 'smartphones,' continues to accelerate. In the second quarter of 2003, the worldwide converged handheld device market grew 330.7% year-over-year and 12.0% sequentially to 1.97 million units. The converged device market now makes up 1.7% of the total mobile phone market, compared with only 0.5% in the same quarter one year ago. During the quarter, a number of new devices were shipped as vendors attempt to determine which combination of functionality, form factor, and price will attract the mass market. "Integrating wireless voice and data capabilities, the converged device market continues to draw broader consumer and enterprise interest, expanding its core customer base," said Sealfon. "With form factors and operating systems improving, this market is poised for steady growth." QView Highlights * Nokia - Nokia maintained its market share this quarter and is strengthening its presence in the U.S. and global CDMA markets. In addition, close to one-third of all Nokia phones shipped in the quarter had color screens, multimedia capabilities and a growing number included digital cameras. * Motorola - Motorola's market share dropped in 2Q03 to 13.4% from 17.4% one year ago due mainly to stiff competition in Europe and Asia. Motorola has shipped just 9 new models so far in 2003 and is only just beginning to ship cameraphones. * Samsung - Through an aggressive product strategy, its success in the CDMA market, and a growing GSM presence, Samsung increased its market share to 10.1% and continued to close the gap on Motorola. * Sony Ericsson - Buoyed by the success of its T610 in Europe and its cameraphone efforts in Japan, Sony Ericsson re-entered IDC's top 5 list as it grew its market share to 5.7%. * Converged Handheld Devices - With 61.0% share, Nokia continued to dominate the converged handheld device market in 2Q03. Handspring relinquished its position among the top 5 vendors due to an aging product line, while RIM and Kyocera established themselves as the number 4 and number 5 converged device vendors. [see modified table above] Handsets -- These small, battery-powered, voice-centric devices utilize operator-provided cellular/PCS air interfaces for voice communication. They are designed primarily, in both form factor and feature set, for a compelling mobile telephony experience, but may also include text- messaging capability. Handsets may include a headset jack for hands-free operation as well as a variety of features, such as personal information management, multimedia, games, or office applications. Handsets exist at all points along the form factor, price point, and feature set continua. Handsets that combine voice communications capabilities with pen or keypad handheld data features are tracked within the Converged Devices category. [see modified table above] Converged Handheld Devices -- These mobile devices are either voice or data centric and are capable of synchronizing personal information and/or email with server, desktop, or laptop computers. Positioned to solve the "multiple device question" and replacing the need to carry a mobile phone and a pen-based handheld or a mobile phone and a pager, for example, these devices may also include an expanding list of features, such as multimedia or email. These devices must match wireless telephony capability to evolved operating systems or application environments, such as the Palm OS, Microsoft Pocket PC Phone Edition 2002, Microsoft Windows Smartphone, and the Symbian platform. These devices must include the ability to download data to local storage, run applications, and store user data beyond their required PIM capabilities. Converged handheld devices must also offer the full extent of their application processing capability to the user, regardless of network availability. IDC's Worldwide Handset QView provides device vendors, software developers, service providers, and component suppliers with timely and accurate information on the worldwide handset market. The program provides quarterly measurements of worldwide unit shipments and vendor market shares. For more information about IDC's Worldwide Handheld Qview program, please contact Demetrios Louloudes at 508-935-4356 or dlouloudes@idc.com. About IDC IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations. IDC is a division of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com All product and company names may be trademarks or registered trademarks of their respective holders. << For More Q1 & Q2 2003 Handset Sales data see: Message 19154648 For Historical Handset Sales data see: Message 18708054 - Eric -

To: Eric L who wrote (3099)	8/18/2003 1:02:34 PM
From: Eric L	Respond to of 9255

The Handset Game: Nokia and Samsung and Motorola: Back in July 2001 Samsung (SEC IR) made this comment about a US listing: US listing requires enormous amount of accounting work. Currently SEC is running almost hundreds of overseas subsidiaries. To meet the listing requirement, each subsidiaries' Financial Statement must be reconciled with US GAAP. To be able to do so in ongoing basis, we are working on to establish accounting systems these days. Other than the accounting issue, we have to look into the semiconductor cycle carefully to maximize the upside potential of US listing. (09, July, 2001) One advantage of a US listing is that we'll be able to get a better handle on their numbers. Obviously they are doing well, but its difficult to tell how well the wireless unit is really doing. At the beginning of 2001 their net margins were about 11% (pretty good at a time when only Nokia was really profitable amongst their peers). By the beginning of 2002, they caught Nokia in net margins and actually for 4 consecutive quarters surpassed Nokia). They slipped behind Nokia Q1, and slipped further in Q2, but their margins are still the 2nd healthiest in an industry where few players have any profit. Without calculating I would guess off the cuff that Nokia is taking 65% to 70% of handset industry profit, and Samsung ~25% to ~28%. I recently made the following comment on TMF: Per the recent CC they expect at least 20% growth QoQ in GSM going forward with only moderate growth in CDMA and TDMA going forward. Their GSM ASP is currently $180 and they expect that to increase to $190 because of new features (cameras, MMS, etc.). Currently over 50% of their GSM models are GPRS enabled and that's increasing. I do think the fact that they internally source high end color displays, memory and such, helps maintain margin on their high ASP, and in addition they have some volume clout with Qualcomm chipset pricing wise as they are Qualcomm's biggest customer, which I think is one reason they are low keying their own internally developed 1xRTT chipset for the time being. Samsung has really come on strong since they expanded into GSM and along with Nokia, they really have Rotomola caught in the pincers, and I don't see anyone really threatening them from behind, although NEC is worth watching, as is Matsushita, but that's more of a 3GSM game than 2.5G GSM or 2.5G 1xRTT. Worldwide Terminal Sales Estimates For H1 2003 · Company 1Q 03* 1Q 03 2Q 03** 2Q 03 H1 03 H1 03 Units MktSh Units MktSh Units MktSh · Nokia 39.5m 35.0% 41.0m 36.6% 80.5m 35.8% Motorola 16.6m 14.7% 15.8m 14.1% 32.4m 14.4% Samsung 11.9m 10.5% 12.0m 10.7% 23.9m 10.6% Siemens 8.6m 7.6% 8.1m 7.2% 16.7m 7.4% Sony Ericsson 5.4m 4.8% 6.7m 6.0% 12.1m 5.4% LGE 5.1m 4.5% 5.3m 4.7% 10.4m 4.6% Panasonic 3.8m 3.4% NR NR NA NA NEC 2.9m 2.6% NR NR NA NA Others 18.9m 16.9% 23.4m 20.7% 49.0m 21.8% ====== ====== Total Market 112.7m 100.0% 112.3m 100% 225.0m 100% * Gartner Dataquest Sell-Through I am awaiting Dataquest's Q2 analysis and am estimating Q2 Sell-Through at 112.3m units in the interim · Comparative, Margin, and Cost · Margin & Cost does not take SG&A and R&D into consideration and that is impossible to get at for Samsung (unlike Nokia or Motorola). · U.S. S.Korean Operating Average Average Euro (USD) Won (KRW) Margin Cost USD Cost € · Nokia €134.50 $153.87 183,534 23.1% $118.32 €103.43 Motorola €129.44 $148.00 176,534 3.3% $143.12 €129.44 Samsung €170.96 $195.47 233,000 20.0% $156.38 €136.77 Siemens €109.32 $125.00 149,174 0.2% $124.25 €108.23 SEricsson €167.91 $192.09 229,124 (4.5%) $200.73 €175.47 LGE €142.45 $162.88 194,150 2.1% $159.46 €139.46 On the market share side (units) historical comparative market share looks like this: · Year to Year Market Share · 1997 1998 1999 2000 2001 2002 2003 Q2 YTD · Nokia 20.1% 24.3% 26.9% 30.6% 35.0% 35.8% Motorola 28.8 23.2 16.9% 14.6% 14.8% 15.3% Samsung 3.6 4.2 6.2% 5.0% 7.1% 9.8% 10.5% · Sources for above statistics: Herschel Shosteck for 1997 and 1998 and Gartner Dataquest for 1999 through 2003. · .Samsung v. Nokia - 5 Year Market Share Increase: · Nokia Samsung · 1998 + 4.2 % points .6 % points 1999 + 2.6 % points 2.0 % points 2000 + 3.7 % points - 1.2 % points 2001 + 4.4 % points 2.1 % points 2002 + .8 % points + 2.7 % points -------------- ------------- + 15.7 % points + 6.2 % points · Samsung v. Motorola - 5 Year Market Share Increase:** · Motorola Samsung · 1998 - 5.6 % points .6 % points 1999 - 6.3 % points 2.0 % points 2000 - 2.3 % points - 1.2 % points 2001 + 0.2 % points 2.1 % points 2002 + 0.5 % points + 2.7 % points -------------- ------------- - 13.5 % points + 6.2 % points Because of their high industry high ASPs (~$194) market share revenue wise would be higher than noted above and Rotomola would slip to 3rd. Nokias's current share would remain about the same because their ASPs are marginally above industry average. In their most recent CC Samsung kind of dodged a question about whether they would move downstream, and the implication was that they have some doubt about their ability to maintain margin if they do, or at least that is how I read their response. Focus on the high end is the one thing holding them back im overtaking Rotomola. Samsung brand is also coming on strong: Message 19145949 Best to all, - Eric -

To: Eric L who wrote (3099)	9/2/2003 3:51:43 PM
From: Eric L	Respond to of 9255

The Handset Market Share Game: H1 2003 (Gartner, IDC, SA) Gartner Dataquest checks in rounding out the major research agencies reports: Finnish handset maker Nokia Corp. continued to lead the pack in terms of units sold, taking 35.9 percent of the market for the second quarter, up from 34.2 percent during the same period last year. Nokia was aided by heightened demand in emerging markets and its success with CDMA (Code Division Multiple Access) handsets - Gartner Dataquest - Gartner Dataquest Global Sales to End Users (Sell-Through) in H1 2003 · Vendor 1Q 03 1Q 03 2Q 03 2Q 03 H1 03 2Q 03 Units Market Units Market Units Market Share Share Share · 1. Nokia 39.479m 35.0% 41.2m 35.9% 80.7m 35.5% 2. Motorola 16.561m 14.7% 16.7m 14.6% 33.3m 14.6% 3. Samsung 11.879m 10.5% 11.3m 9.9% 23.2m 10.2% 4. Siemens 8.585m 7.6% 8.1m 7.0% 16.7m 7.3% 5. SEricsson 5.385m 4.8% 6.3m 5.5% 11.7m 5.1% 6. LG 5.016m 4.5% 4.4m 3.8% 9.4m 4.1% Others 25.769m 22.9m 26.9m 23.3% 49.5m 23.2% ======== ====== ====== ====== ====== ====== Total 112.674m 100.0% 114.9m 100.0% 227.6m 100.0% · Source: Gartner Dataquest: The table includes iDEN shipments, but excludes WLL and ODM to original equipment manufacturer shipments. · IDC H1 2003 Worldwide Handset Shipments and Market Share · Vendor 1Q 03 1Q 03 2Q 03 2Q 03 H1 03 H1 03 Units Market Units Market Units Market Share Share Share · 1. Nokia 38.150m 35.5% 40.906m 34.6% 79.057m 35.0% 2. Motorola 16.700m 15.5% 15.800m 13.4% 32.500m 14.4% 3. Samsung 13.200m 12.3% 12.000m 10.1% 25.200m 11.2% 4. Siemens 8.000m 7.4% 8.100m 6.8% 16.100m 7.1% 5. SEricsson 5.379m 5.0% 6.700m 5.7% 12.079m 5.3% 6. LGE 5.620m 5.2% 5.300m 4.5% 10.920m 4.8% Other 20.536m 19.1% 29.514m 24.9% 50.050m 22.2% ======== ====== ======== ====== ======== ====== Total 107.586m 100.0% 1l8.320m 100.0% 225.907m 100.00% · Note: Vendor shipments are branded shipments and exclude OEM sales for all vendors. · Nokia leading on the high end as well as low end: · IDC's Top Vendors, Worldwide Converged Device (Smartphone) Shipments · Rank Vendor 2Q 2003 2Q 2003 1Q 2003* Shipments Market Share Market Share · 1. Nokia 1,200,000 61.0% 57.3 % 2. Sony Ericsson 200,000 10.2% 11.1 % 3. Motorola 115,000 5.8% 7.4 % 4. RIM 89,964 4.6% - 5. Kyocera 51,000 2.6% - ? Samsung 5.1% ? Handspring 4.1 % Other 310,741 15.8% 14.9 % ========= Total 1,966,705 · * IDC had Q1 Smartphone shipments at 1.76 million units · Strategy Analytics Q1 & Q2 2003 Handset Shipment Market Share · Q1 03 02 03 H1 03 · Nokia 35.0% 37.0% 36.0% Motorola 15.4% 14.2% 14.8% Samsung 12.1% 10.8% 11.3% Siemens 7.4% 7.3% 7.4% Sony Ericsson 5.0% 6.0% 5.6% LGE 5.2% 4.8% 5.0% Other 19.9% 19.9% 19.9% · * Strategy Analytics said 220 million units were shipped in the first half of 2003. · * Strategy Analytics had 2003 Q2 sell-in at 110.9 million units and sell-through at 108.1 million units. · Gartner Dataquest on Q2 03 v. Q2 02 Market Share Performance · Sales Mkt Share Sales Mkt Share Gain/Loss Company 2Q 2003 2Q 2003 2Q 2002 2Q 2002 % Points · Nokia 41.2m 35.9% 35.1m 34.2% + 1.7 % points Motorola 16.7m 14.6% 17.4m 17.0% - 2.4 % points Samsung 11.3m 9.9% 9.8m 9.5% + 0.4 % points Siemens 8.1m 7.0% 8.2m 8.0% - 1.2 % points Sony Ericsson 6.3m 5.5% 5.3m 5.2% + 1.0 % points LG Telecom 4.4m 3.8% 3.1m 3.0% + 1.3 % points Others 26.9m 23.3% 23.7m 23.1% + 3.2 % points ====== ====== Total 114.9m 102.7m Nokia's share rose to 35.9 percent from 34.2 percent in the second quarter of 2002. Motorola’s share of sales diminished to 14.6 percent from 17 percent and Siemens declined to 7 percent from 8 percent on the year. Samsung’s slice of the market pie grew 0.4 percentage points to 9.9 percent. Sony Ericsson rose to 5.5 percent from 5.2 percent. - Gartner Dataquest - >> Handset Sales Grow, but China Faces Crisis Maija Pesola The Financial Times September 2 2003 news.ft.com A second consecutive quarter of unexpectedly strong handset sales worldwide has led analyst to predict a bumper year for 2003, with full-year sales expected to exceed 450m units. However, manufacturers in China are seeing no relief from an 'escalating crisis' in sales sparked by the recent outbreak of Severe Acute Respiratory Syndrome (SARS). Some 114.9m mobile handset units were sold across the world in the three months to the end of June, according to the latest figures by Gartner, the technology research group. This was 12 per cent higher than sales in the same period last year and 2 per cent higher than in the first quarter, which itself saw record sales. "The second-quarter growth was a bit of a surprise, as normally this is a very quiet quarter and the figures include the impact of the Sars crisis in April and May," said Ben Wood, principal analyst at Gartner. "The indicators for the year are very positive." However, Mr Wood said he remained very concerned about China, where sales were severely disrupted during the Sars outbreak, leading to a huge build-up in inventories, which companies are still struggling to work through. Motorola, the market leader in China, was hardest hit by the crisis, with sales down on last year and its share of the global market falling to 14.6 per cent, from 17 per cent a year earlier. Earlier this summer Motorola lowered its second-quarter sales forecasts to $6bn-$6.2bn, from earlier estimates of $6.4bn-$6.6bn, and said earnings before special items would breakeven, against an earlier forecast of 3-5 cents a share. The Chinese telecoms market is the world's largest and the fastest growing, but is getting increasingly difficult to manoeuvre in as regulation remains opaque and domestic companies begin to flex their muscles. The FT outlines the issues. Go there However, the difficult Chinese climate is also thought likely to take a heavy toll on smaller, local manufacturers. Ann Liang, a Gartner analyst in the Asia Pacific region said the Chinese handset market was set for a "profound correction", including a hefty scaling back of production, consolidation and the exit from the market of smaller companies. According to Gartner, local manufacturers are selling handsets for as little as Rmb300 ($36.30) underscoring their desperation to offload stocks. "Something has to give. There are many weeks of excess stock built up, and it is going to take several quarter to burn off the inventory bubble," Mr Wood said. In Europe and North America mobile phone sales remain driven by fashion, as consumers upgrade to new handsets with colour screens and built-in cameras. Nokia continued to dominate the market, increasing its share to 35.9 per cent. Samsung, the third-largest mobile manufacturer, also increased its market share to 9.9 per cent from 9.5 per cent last year. Sony Ericsson, the struggling Swedish-Japanese joint venture, surprised analysts with strong gains, increasing its market share to 5.5 per cent from 5.2 per cent. The company's strong performance in Japan and a good reception for its T610 camera-phone in Europe had helped push up sales, Gartner said. However, Sony Ericsson's goal of achieving 7-10 per cent market share by the end of the year still looks tough, Gartner said. The second half of the year is likely to see intense competition, with Samsung and Motorola in particular vying with each other to launch record numbers of new models in time for the key Christmas sales period. << >> Global Mobile Handset Sales Up 12% At 115 Million In 2Q-Gartner Berlin Dow Jones Business News September 2, 2003 biz.yahoo.com Sales of mobile phone handsets worldwide rose 12% in the second quarter amid growth in Asia, Latin America and developing markets in Central and Eastern Europe, research firm Gartner Inc. said Tuesday. Handset sales totaled 114.9 million in the second quarter, according to Gartner. Nokia Corp. continued to dominate with a 35.9% market share. The Finnish company's nearest rival is Motorola Inc. had 14.6% of the market. If the current pace of mobile phone production and consumption continues in the second half, the global market will achieve strong growth for 2003 after two years of de facto stagnation, Gartner said. The research company predicts unit sales of more than 450 million this year, analyst Ben Wood said. That's in line with the forecasts from the major handset makers. Siemens AG, which had a 7.0% market share in the second quarter, said Friday it expects industry sales to rise 10% to about 450 million handsets, while Nokia also sees 10% growth this year. Sequentially, global handset sales increased 2% in the second quarter from the first, Gartner said. "Strong sell-through momentum was again evident across all geographical regions, despite the unquestionably negative impact of the Severe Acute Respiratory Syndrome (SARS) epidemic in the Asia/Pacific region during April and May," Gartner analyst Bryan Prohm said in a statement. Sales in Japan, Latin America, developing regions in Central and Eastern Europe, and the Middle East and Africa "far exceeded" expectations in the second quarter, he said. Nokia continued to dominate amid strong market share growth in Asia/Pacific as well as successes with Code Division Multiple Access, or CDMA, the leading wireless standard in the U.S. and many parts of Asia, Gartner said. Sony Ericsson, the venture of Sony Corp. and Telefon AB LM Ericsson , boosted its market share to 5.5%, thanks to a solid performance in Japan and the positive reception to its T610 handset in Western Europe, Gartner said. Motorola, the market leader in China, was hurt by SARS and saw its share drop to 14.6%, it said. Samsung Electronics Co. upped its share of the market to 9.9% in the period, Gartner added. The Western European market remains driven as much by fashion as technology, Wood said. Network operators and handset makers are continuing "relentless marketing campaigns" as the competition to win and keep customers intensifies, he noted. The analyst sees a clear split in the global market. Replacement growth is driving sales in mature regions like Western Europe and North America, while new sales are lifting demand in emerging markets like Africa, China and Eastern Europe, he said. Company Web site: gartner.com << - Eric -