Keeping Handset Analysts on Their Toes
Estimates for handset sales continue to rise. However, the impact on individual market players is more mixed.
The Japan Stock Blog notes that NEC handset sales declined.
The Korea Times says “The first three months of the year have been lackluster for Samsung Electronics and LG Electronics, and the outlook for the second quarter is not really encouraging either for Korea’s two leading mobile phone makers.” Exports were down 6% due to “seasonal weakness of the overseas operator market.”
The two Korean firms have been losing share to Motorola (MOT - Annual Report), who said on their conference call last night that that “our Mobile Device market share for Q1 was 21% globally, the first quarter above 20% in seven years.” Still, the stock declined on fears of shrinking margins.
Meanwhile, Texas Instruments (TXN - Annual Report) posted strong gains in revenue on the back of the overall rise in mobile phone sales. Since they sell into many handset makers they are less impacted by shifting market share in that market. However, if Motorola is to boost their margin they will have to put pressure on the suppliers like TXN to cut prices.
Disclosure: Author is long IShares MSCI Japan Index (EWJ) at time of publication.
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