According to the latest research by IDC, worldwide shipment of mobile phones jumped 14.5% year over year to 317.5 million units in the second quarter of 2010. The year-over-over growth was mainly attributable to a rising demand for smartphones and iPhones as well as increased user base and a greater usage for cell phones.
The cell phones shipments continues to grow as in the first quarter of 2010, the worldwide mobile phone market had grown 21.7%, fueled by a surge in demand for smartphones and a strong recovery from the recession.
Another market research firm, Strategy Analytics, stated that the global handset market in the second quarter 2010 rose 13% to 308 million units from 273 million units in the comparable year-ago period, driven by the increased shipment of lower-end 2G phones in the emerging markets and higher-end 3G touch phones in mature markets.
The research firm said that the 13% year over year growth in the second quarter of 2010 was above the 8% growth recorded in the second quarter of 2009; however was lower than the 17% average of the previous two quarters. Strategy Analytics anticipates that the worldwide mobile phone shipment will be 325 million units in the third quarter 2010, an increase of 12% year over year.
The global economic recovery in the mobile phone market is clearly visible from the first half of 2010, which is driven by new launches, growth in iPhones, increased customer satisfaction and the large addressable market. We believe the second half of 2010 to be up as major handset vendors are expected to release new handsets during this period.
Although global cell phone shipments have continued to increase and recovered from the 2009 level, market share of mobile phones manufacturers has been decreasing, which is a concern. Moreover, the mounting pricing pressure could hurt margins.
Nokia Corp. (NOK) remained the market leader in the phone industry for the second quarter. However, the company witnessed a slower growth compared with the overall industry as its market share dropped to 35% from 40% reported in 2008. South Korean handset manufacturers, Samsung Electronics Co. and LG Electronics Inc. held second and third position with market share of 20.7% (previously 19.1%) and 10% (previously 10.9%), respectively.
The blackberry manufacturer, Research In Motion Ltd. (RIMM) grabbed the fourth position (market share increased to 3.6% from 2.9%) in the worldwide phone shipment with 11.2 million units shipped. Apple Inc. (AAPL) held the fifth position (market share increased to 3% from 2%) in phone shipment with 8.4 million units while the Taiwanese mobile phone maker, HTC Corp. came in at the sixth position with 6.5 million phone shipment
Sony Ericsson’s market share fell to 3.6% from 5.1% as the company refocused on high-end 3G phones and the number of available models decreased.
Motorola Inc. (MOT) was worst hit from competition and its worldwide market position fell to seventh position from the third position earlier.
The following is the last quarter summary for each of the companies mentioned above.
Nokia Corp. - Nokia’s net revenue of $12.8 million was 1.4% above the Zacks Consensus Estimate in the second quarter of 2010, primarily driven by the increase in the mobile phones shipment. Nokia shipped a total 111.1 million mobile handsets, up 8% year over year. The company’s global market share in overall mobile handset market was 33% in the second quarter of 2010, compared with 35% in the year-ago quarter. For full fiscal 2010, Nokia expects global mobile handset market to be up by 10% and anticipates that it will maintain its current market share for mobile handset. Earnings per share of 14 cents were in line with the Zacks Consensus Estimate.
Although the new N8 smart phone (expected to ship in the third quarter 2010) has a host of new features and could drive 2010 sales, Nokia is unable to introduce any market leading high-end smartphone. The company has struggled to make a retail presence in the U.S, which is hindered by intense competition. Currently, Nokia has a Zacks #4 Rank (Sell) rating.
Samsung, LG & Sony Ericsson - Samsung shipped 63.8 million units, up 22%, boosted by the new Galaxy S smart phone. LG shipped 30.6 million handsets, up 3%, while Sony Ericsson shipped 11 million handsets in the last quarter, down 20%.
Research In Motion Ltd. - Research In Motion’s first quarter 2011 earnings per share of $1.38 exceeded the Zacks Consensus Estimate by 4 cents and revenues soared 24% year over year. Better-than-expected results were primarily attributable to the introduction of new models and increased Blackberry shipment.
Research In Motion shipped 11.2 million BlackBerry devices, up 40% from the year-ago quarter and added 4.9 million net new BlackBerry subscribers in the quarter. However, it was impacted by a loss of market share to iPhone maker, Apple Inc. and the DROID smartphone of Motorola Inc. based on the Android operating system of Google Inc. (GOOG).
Despite increased competition, Research In Motion’s profitability could be spurred based on the new range of exciting Blackberry products to be launched in the coming months, and the growth in 3G phones. Further, the Blackberry OS 6 upgrade should help the company deliver better results boosting its market share. Currently, Research In Motion has a Zacks #3 Rank (Hold) rating.
Apple Inc. - Apple’s third quarter 2010 results blew past the Zacks Consensus Estimate, fueled by strong iPhone sales, record Mac sales, increased iPad sales and success of new product launches. Earnings in the quarter were a record at $3.51 per share, beating the Zacks Consensus Estimate of $3.08 by 43 cents per share. Revenues leaped 61.3% year over year to $15.70 billion.
Overall, iPhone unit sales were 8.4 million during the quarter, representing a 61% unit growth over the year-ago quarter. This includes over 1.7 million iPhone 4 sales in the initial five countries where it was launched.
According to IDC, the overall smartphone market grew 38% in the June quarter, almost half of the Apple’s 61% growth. Apple’s share of the global smartphone market reached 15.8%, and the company ranks No. 3 behind Nokia and Research In Motion. Research firm, IDC further said that 66% of current iPhone 4 owners were delaying their iPhone 4 upgrades due to an ongoing antenna issue. Although the issue could impact near-term results, in the longer term we expect the iPhones to be a growth driver. Currently, Apple has a Zacks #1 Rank (Strong Buy) rating.
Motorola Inc. - Supported by an increasing market traction of 3G Android-based smartphones, Motorola’s second quarter 2010 net profit of 7 cents per share surpassed the Zacks Consensus Estimate of 6 cents. Quarterly total revenue of $5,414 million was well ahead of the Zacks Consensus Estimate of $5,150 million.
During the quarter, Motorola shipped 8.3 million mobile phones, including 2.7 million of smartphones, mainly attributable to a solid growth of the company’s flagship DROID product.
During the quarter, the company launched 4 new 3G smartphones (total smartphone portfolio increased to 12 devices) based on Google’s Android operating system. Although, Motorola’s highly recognized that DRIODX smartphone is receiving encouraging market traction, we opine that a real turnaround will not happen until Motorola makes a smartphone that can out perform the market. Motorola is currently a short-term Zacks #3 Rank (Hold) stock.
APPLE INC (AAPL): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
MOTOROLA INC (MOT): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): Free Stock Analysis Report
RESEARCH IN MOT (RIMM): Free Stock Analysis Report
Zacks Investment Research
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Another market research firm, Strategy Analytics, stated that the global handset market in the second quarter 2010 rose 13% to 308 million units from 273 million units in the comparable year-ago period, driven by the increased shipment of lower-end 2G phones in the emerging markets and higher-end 3G touch phones in mature markets.
The research firm said that the 13% year over year growth in the second quarter of 2010 was above the 8% growth recorded in the second quarter of 2009; however was lower than the 17% average of the previous two quarters. Strategy Analytics anticipates that the worldwide mobile phone shipment will be 325 million units in the third quarter 2010, an increase of 12% year over year.
The global economic recovery in the mobile phone market is clearly visible from the first half of 2010, which is driven by new launches, growth in iPhones, increased customer satisfaction and the large addressable market. We believe the second half of 2010 to be up as major handset vendors are expected to release new handsets during this period.
Although global cell phone shipments have continued to increase and recovered from the 2009 level, market share of mobile phones manufacturers has been decreasing, which is a concern. Moreover, the mounting pricing pressure could hurt margins.
Nokia Corp. (NOK) remained the market leader in the phone industry for the second quarter. However, the company witnessed a slower growth compared with the overall industry as its market share dropped to 35% from 40% reported in 2008. South Korean handset manufacturers, Samsung Electronics Co. and LG Electronics Inc. held second and third position with market share of 20.7% (previously 19.1%) and 10% (previously 10.9%), respectively.
The blackberry manufacturer, Research In Motion Ltd. (RIMM) grabbed the fourth position (market share increased to 3.6% from 2.9%) in the worldwide phone shipment with 11.2 million units shipped. Apple Inc. (AAPL) held the fifth position (market share increased to 3% from 2%) in phone shipment with 8.4 million units while the Taiwanese mobile phone maker, HTC Corp. came in at the sixth position with 6.5 million phone shipment
Sony Ericsson’s market share fell to 3.6% from 5.1% as the company refocused on high-end 3G phones and the number of available models decreased.
Motorola Inc. (MOT) was worst hit from competition and its worldwide market position fell to seventh position from the third position earlier.
The following is the last quarter summary for each of the companies mentioned above.
Nokia Corp. - Nokia’s net revenue of $12.8 million was 1.4% above the Zacks Consensus Estimate in the second quarter of 2010, primarily driven by the increase in the mobile phones shipment. Nokia shipped a total 111.1 million mobile handsets, up 8% year over year. The company’s global market share in overall mobile handset market was 33% in the second quarter of 2010, compared with 35% in the year-ago quarter. For full fiscal 2010, Nokia expects global mobile handset market to be up by 10% and anticipates that it will maintain its current market share for mobile handset. Earnings per share of 14 cents were in line with the Zacks Consensus Estimate.
Although the new N8 smart phone (expected to ship in the third quarter 2010) has a host of new features and could drive 2010 sales, Nokia is unable to introduce any market leading high-end smartphone. The company has struggled to make a retail presence in the U.S, which is hindered by intense competition. Currently, Nokia has a Zacks #4 Rank (Sell) rating.
Samsung, LG & Sony Ericsson - Samsung shipped 63.8 million units, up 22%, boosted by the new Galaxy S smart phone. LG shipped 30.6 million handsets, up 3%, while Sony Ericsson shipped 11 million handsets in the last quarter, down 20%.
Research In Motion Ltd. - Research In Motion’s first quarter 2011 earnings per share of $1.38 exceeded the Zacks Consensus Estimate by 4 cents and revenues soared 24% year over year. Better-than-expected results were primarily attributable to the introduction of new models and increased Blackberry shipment.
Research In Motion shipped 11.2 million BlackBerry devices, up 40% from the year-ago quarter and added 4.9 million net new BlackBerry subscribers in the quarter. However, it was impacted by a loss of market share to iPhone maker, Apple Inc. and the DROID smartphone of Motorola Inc. based on the Android operating system of Google Inc. (GOOG).
Despite increased competition, Research In Motion’s profitability could be spurred based on the new range of exciting Blackberry products to be launched in the coming months, and the growth in 3G phones. Further, the Blackberry OS 6 upgrade should help the company deliver better results boosting its market share. Currently, Research In Motion has a Zacks #3 Rank (Hold) rating.
Apple Inc. - Apple’s third quarter 2010 results blew past the Zacks Consensus Estimate, fueled by strong iPhone sales, record Mac sales, increased iPad sales and success of new product launches. Earnings in the quarter were a record at $3.51 per share, beating the Zacks Consensus Estimate of $3.08 by 43 cents per share. Revenues leaped 61.3% year over year to $15.70 billion.
Overall, iPhone unit sales were 8.4 million during the quarter, representing a 61% unit growth over the year-ago quarter. This includes over 1.7 million iPhone 4 sales in the initial five countries where it was launched.
According to IDC, the overall smartphone market grew 38% in the June quarter, almost half of the Apple’s 61% growth. Apple’s share of the global smartphone market reached 15.8%, and the company ranks No. 3 behind Nokia and Research In Motion. Research firm, IDC further said that 66% of current iPhone 4 owners were delaying their iPhone 4 upgrades due to an ongoing antenna issue. Although the issue could impact near-term results, in the longer term we expect the iPhones to be a growth driver. Currently, Apple has a Zacks #1 Rank (Strong Buy) rating.
Motorola Inc. - Supported by an increasing market traction of 3G Android-based smartphones, Motorola’s second quarter 2010 net profit of 7 cents per share surpassed the Zacks Consensus Estimate of 6 cents. Quarterly total revenue of $5,414 million was well ahead of the Zacks Consensus Estimate of $5,150 million.
During the quarter, Motorola shipped 8.3 million mobile phones, including 2.7 million of smartphones, mainly attributable to a solid growth of the company’s flagship DROID product.
During the quarter, the company launched 4 new 3G smartphones (total smartphone portfolio increased to 12 devices) based on Google’s Android operating system. Although, Motorola’s highly recognized that DRIODX smartphone is receiving encouraging market traction, we opine that a real turnaround will not happen until Motorola makes a smartphone that can out perform the market. Motorola is currently a short-term Zacks #3 Rank (Hold) stock.
APPLE INC (AAPL): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
MOTOROLA INC (MOT): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): Free Stock Analysis Report
RESEARCH IN MOT (RIMM): Free Stock Analysis Report
Zacks Investment Research
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