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Technology Stocks : Nokia Corp. (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (4733)	4/12/2007 10:39:42 PM
From: Eric L	Read Replies (2) \| Respond to of 9255

Good Samsung Start ... ... BUT while record handset units were up 30% YoY with solid margin improvement (approaching 13% from 7% in Q4), handset revenue sales were down 2% YoY and lower than expected. Looong Call. Lots of NAND talk. Q1 Samsung Earnings CC Slides here ... sec.co.kr I. Q1 Handset shipments of 34.8mn units (+6% QoQ and 30% YoY) • Export: Shipment increase due to strong sales of “Ultra Edition” and newly launched VGA/Color models in emerging markets (China) despite weak seasonality (worldwide market: down 10% QoQ). • Domestic: Increased shipment with competitive products in intense market share competition amongst operators (up 43% QoQ) • ASP: 4Q’06 $168 to 1Q’07 1Q $155 (down 8% QoQ). ASP decline due to increased sales of VGA/Color models and strong competition in weak seasonality • Best Selling Products: D900, E250 • Telecom division margins (including networks) = 13% (up 29% YoY) • Q1 2007 Samsung Handset Revenue Sales 1Q ’07 Q-on-Q 4Q ’06 1Q ’06 Y-on-Y ======= ====== ====== ====== ====== 4.28¹'² -1% 4.31¹ 4.39¹ -2% · ¹ (Units : Trillion, KRW) ² 4.28 Trillion KRW = $4.652 Billion USD at January 31, 2007 New shooter presenting Telecoms = Dr. David Steel (V.P., Telecommunication Business) is well spoken, soft spoken. II. Business Outlook: Market • ’07 Global handset demand may exceed 1.07B units --> Global market demand to slow down YoY due to decelerated net addition, but to sustain above 10% stable growth --> market growth will be driven by replacement demand of multimedia (music/mega camera) and 3G handsets (mega camera portion: ’06. 23% -> ’07. 38%) --> Domestic market to expand due to strong competition among operators with the launch of HSDPA service II. Business Outlook: Samsung [Music the Key Driver] • Q2 ’07: Shipment increase expected with the launch of new models including Ultra Edition II --> Launch many new models including the UE II, Ultra Music (Beyonce)/Video, HSDPA (4 models) • ’07 total shipment may exceed 133M units --> Strengthen high-end line-up with the Ultra Edition II, specialized feature models (messaging/mobileTV, music) --> Expect increased sales of specialized models for mass market --> Enhance WCDMA product line-up and lead the HSDPA market --> Closer look at emerging markets and lower end sets with good margins but strategy not set, but under $100 sets rose from low 30% of mix in '06 to high 30s in Q1. --> Saw soft market in Europe in Q1 --> Margins likely to be down somewhat in Q2 (SG&A spend) • Expand into global Mobile WiMAX market with various types of Mobile WiMAX devices --> Secure more than 5 new operators to deploy Mobile WiMAX business III. Historical Q1 2006 Key Handset Metrics Sales ASP Revenue Operating Units EURO USD EURO USD Margin ===== ========== ======= ======== ========== Samsung 29.0m €142 $171 €3.784b $4.570b 10.0% 18 Month Global Shipments and Market Share Estimates (Strategy Analytics) Global Sell-In Q3 '05 Q4 '05 2005 Q1 '06 Q2 '06 Q3 '06 Q4 '06 2006 ========= ====== ====== ====== ====== ====== ====== ====== ====== Nokia 66.6m 83.7m 264.9m 75.1m 78.4m 88.5m 105.5m 347.5m 31.7% 34.1% 32.4% 33.3% 33.3% 34.5% 35.2% 34.1% --------- ------ ------ ------ ------ ------ ------ ------ ------ Motorola 38.7m 44.7m 146.0m 46.1m 51.9m 53.7m 65.7m 217.4m 18.4% 18.2% 17.9% 20.4% 22.1% 21.0% 21.9% 21.3% --------- ------ ------ ------ ------ ------ ------ ------ ------ Samsung 26.8m 27.2m 102.9m 29.0m 26.3m 30.7m 32.0m 118.0m 12.8% 11.1% 12.6% 12.8% 11.2% 12.0% 10.7% 11.6% ### >> Samsung Electronics Posts Weak Q1 on Chip Margin Collapse Reuters (Seoul) April 12, 2007 (9:44pm ET) reuters.com Samsung Electronics Co. Ltd., the world's top memory chip maker, reported a 15 percent fall in first-quarter earnings on Friday, hurt by a steep drop in semiconductor margins and lower-than-expected shipments. ... <snip> ... Samsung, the most valuable technology company outside the United States, posted January-March net profit of 1.6 trillion won ($1.72 billion), down from 1.88 trillion won a year earlier -- slightly lower than a forecast for 1.66 trillion won from nine analysts polled by Reuters. ... <Big Snip> ... The world's third-largest maker of mobile phones after Nokia (NOK1V.HE: Quote, Profile , Research) and Motorola (MOT.N), sold 34.8 million handsets in the first quarter, a record after the 32 million sold in the fourth quarter. Mobile phone margins rose to 13 percent from the fourth quarter's revised 7 percent. ... <snip> ... ($1=931.4 Won ### Next to bat is Moto next Wednesday after the bell. It will be interesting to see if Samsung takes over the #2 slot for handset revenue sales. - Eric -