A Quiz for Quacksters ...
roadie,
<< Maybe you should quit worrying about Quacking when there is plenty of Quaking going on. The King has no clothes. >>
Quack, Quack!
Last I looked King Nokia, a mobile wireless pure play, and the largest and most profitable manufacturer of mobile wireless handset, with the largest market cap, had plenty of clothes. They followed up a very good 2005 in which they increased top and bottom lines and profit, market share, market cap, and shareholder value, with a very good 2006 in which they increased top and bottom lines and profit, market share, brand asset value, and shareholder value, despite the industry's largest R&D and SG&A spend and they are off to a good start in 2007 as they transition and refresh their mid range and low end platforms.
Nokia truly has a wardrobe fit for a King or more properly, even an Emperor.
I'm not sure about your portfolio, but the dog in mine in both 2005 and 2006 was QCOM, but fortunately nice contributions from NOK, and some other industry players I hold in my wireless basket offset the pathetic QCOM performance.
Is the poor performance of QCOM in recent years the reason you can't afford a paying membership with attendant privileges to SI or IHub?
Quack, Quack!
<< NOK was just shown to not be the low cost producer in 3G ... >>
Quack, Quack!
Do you know the difference between a low cost high margin producer (THE low cost high margin producer with the broadest range of models across all price tiers except ULCH in the Nokia case), and a low cost low margin seller as opposed to a low cost high margin seller?
Quack, Quack!
What was the consequence to LG and LG shareholders of LG's giving away low cost CDMA handsets in emerging markets last year?
Quack, Quack!
How many quarters in the last 6 did LG have negative margins for the handset component of their Telecoms division?
Quack, Quack!
What was LG's abysmal operating margin for 2006 and how much was it down from their poor margins in 2005 and how much were the 2005 margins down from their highest ever single digit margins in 2004?
Quack, Quack!
How much did LG increase unit sales in 2006 YoY and conversely how much lower was their handset revenue YoY.
Quack, Quack!
In what quarter of 2006 did Sony Ericsson knock LG out of the 4 slot in handset revenue sales?
Quack, Quack!
In what quarter of 2006 did Sony Ericsson knock LG out of the 4 slot in handset unit sales?
Quack, Quack!
How much market share did LG lose last year?
Quack, Quack!
How much market share did Nokia, Motorola, and Sony Ericsson, gain in 2006 at the expense of LG (and Samsung, and all 'Other' Losers)?
Quack, Quack!
If LG -- who is Quackcom's largest customer -- loses as much money on their low cost UMTS (WCDMA) models, as they have been doing with their low cost CDMA models, do you think that they should stick to manufacturing upscale washers and dryers and abandon handsets altogether?
FYI: The low cost seller of Ultra Low Cost (ULCH) Handsets for GSM in emerging markets has been Motorola, the star-crossed winner/loser of GSMA's 2 ULCH GSM handset awards. Nokia makes upscale entry level handsets, but has chosen not to yet compete in the ULCH bloodbath, preferring to make substantial margin rather than give handsets away. Nokia's entry level handsets are produced by their Mobile Phones division headed by Kai Oistamo and formerly headed by OPK. The division also makes their mid-range EDGE and WEDGE feature phones and now also produces mid-range EDGE and WEDGE smartphones. Kai's division had 17.8% operating margins in Q4 (up YoY) and please note that in Q4 only Nokia and Sony Ericsson had double digit operating margins in handsets. Moto crashed to 4%. Samsung to 8%, and poor old LG was barely profitable despite Chocolate success. Quackcom's other significant customers -- Sanyo, Kyocera, Pantech, BenQ, et al, just continue to bleed red. Amongst 'Others' only RIM and HTC are making profit of consequence and most are losing dinero. Amongst the top 5, the King you claim has no clothes walked away with 51% of the profit for that group. Overall they have over 60% of the industry profit.
Quack, Quack!
<< NOK ... is going to lose margins in smartphones as Quality Q brings that chipset down in cost too. >>
Quack, Quack!
It is about bloody time that Quackcom provided native support for a HLOS (in their case Mobile Linux and Windows for Smartphones for starters) that characterizes a smartphone as opposed to a feature phone. Don't you think so, since in the past Quackcom with its underpowered ARM9 based integrated chipsets has given away the applications processor business for both UMTS (WCDMA) smartphones and CDMA2000 smartphones to TI, Intel (now Marvel), Samsung, et al, even when Quackcom provided the baseband with a no account integrated apps processor. Presumably we'll see QUALCOMM powered smartphones shortly not requiring apps processors from others.
I'm looking forward to seeing the 1st QUALCOMM handset powered by an ARM11 based multi-engine processor, although I'm not holding my breath for the long promised Scorpion/Snapdragon to make an appearnce in handsets commercially. The MSM7200 has been coming, and coming, and coming, and coming, while TI's ARM11 based OMAP2 powers most very high end UMTS smartphones today, and OMAP 3 will likely do so tomorrow long before the appearance of Snapdragon. An ARM9 based HSPA handset doesn't do much for anybody -- particularly in a smartphone -- and Nokia's HSPA handsets announced to date use OMAP2.
FYI: Nokia might (undoubtedly will) lose market share eventually in smartphones as the smartphone market grows dramatically -- they did in 2006 according to Canalys. They were down a few share points YoY to a paltry 50% global share with their Symbian based models the majority of which use their S60 software platform that they license to others like Samsung. Losing MARGIN, however is a different story, even though they are leading the pack in driving the price of mid-range smartphones down dramatically while they concurrently maintain those industry leading high double digit margins.
FYI: The majority of Nokia's smartphones and all the upper tier smartphone models except for the enterprise class older Communicators (Series 80 based) and the S60 based ESeries Symbian models are produced by their Rr&D intensive Multimedia division headed by Anssi Vanjoki. Their margins in Q4 were 15.3% (flat YoY).
You heard it here first. With product refresh happening now, Nokia's Multimedia division margins and those of the even more R&D intensive Enterprise Solutions group whose models are now all Symbian and S60 based will increase, not decrease, in 2007. No manufacturer can match the feature set of these devices across the broad range of models and price points. They sure as heck can't do it with a Quackcom chipset.
In 2006 Symbian's global market share in smartphones increased to 67%.
canalys.com
Do you think that Quackcom should provide native support for the Symbian OS in its high end chipset range?
<< Do you know what the sound of quaking in rubber boots sounds like? >>
I don't, and even you sure aren't hearing it from Nokia, although you might be fanaticizing it, but I am very familiar with the incessant quacking of the all too often poorly informed nutball fringe of QUACKCOM's barmy army of loyal headbangers and SI freeloaders ...
... that is. if their quacking isn't really quaking after all. CDMA handset manufacturers aren't just quaking, they are shaking.
Have a Quacking good Quackcom and Nokia Day.
Let's hope QCOM's gains of last week don't evaporate next week when the industry finds out that there is not going to be an announcement of a Nokia/QUALCOMM settlement when lightweights like Larry Paulson and Jeff Belk participate in a CDG webcast.
Cheers,
- Eriq - |
