Linked by Thom Holwerda on Fri 26th Jul 2013 14:56 UTC
PDAs, Cellphones, Wireless "In smartphones, it's not all about Apple and Samsung anymore. For several years, these two companies have dominated the mobile phone-making business, successively one-upping each other with ever sleeker, more technologically sophisticated iPhones and Galaxy handsets that left would-be rivals grasping. But now the competition is stirring, and consumers are giving another look to brands they once ignored." Not only is Samsung now more profitable in mobile than Apple (next goalpost please), smaller Android manufacturers, such as LG, ZTE, and Lenovo, are making huge inroads, and are raking in growing profits - in fact, these three now belong to the top 5 mobile device makers. The common parlance that only Samsung is making a profit off Android is simply no longer true.
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Profit or market share
by avgalen on Fri 26th Jul 2013 15:04 UTC
avgalen
Member since:
2010-09-23

[quote]smaller Android manufacturers, such as LG, ZTE, and Lenovo, are making huge inroads, and are raking in growing profits - in fact, these three now belong to the top 5 mobile device makers. The common parlance that only Samsung is making a profit off Android is simply no longer true.[/quote]

I couldn't find any evidence of those companies "raking in profits". Do you have any numbers?

Reply Score: 6

RE: Profit or market share
by bowkota on Sat 27th Jul 2013 09:31 UTC in reply to "Profit or market share"
bowkota Member since:
2011-10-12


I couldn't find any evidence of those companies "raking in profits". Do you have any numbers?


He won't post any numbers because he can't find them. Sure enough they might be selling but all the big majority of profits goes to Samsung and Apple.

Reply Score: 3

RE[2]: Profit or market share
by Nelson on Sat 27th Jul 2013 12:12 UTC in reply to "RE: Profit or market share"
Nelson Member since:
2005-11-29

And crickets chirp waiting for such proof.

Reply Score: 3

RE[3]: Profit or market share
by Thom_Holwerda on Sat 27th Jul 2013 14:36 UTC in reply to "RE[2]: Profit or market share"
Thom_Holwerda Member since:
2005-06-29

LG, for instance, increased its year-over-year profits in mobile by 34.5%.

http://www.engadget.com/2013/07/24/lg-q2-earnings-record-smartphone...

Reply Score: 1

RE[4]: Profit or market share
by Nelson on Sat 27th Jul 2013 16:35 UTC in reply to "RE[3]: Profit or market share"
Nelson Member since:
2005-11-29

How much of it was derived from their handset sales, and what's their profit share of the smartphone market as a percentage?

And lets see the same thing for the other Android OEMs.

You're not going to like the result.

Reply Score: 3

RE[5]: Profit or market share
by chithanh on Sun 28th Jul 2013 17:04 UTC in reply to "RE[4]: Profit or market share"
chithanh Member since:
2006-06-18

what's their profit share
Their profits don't become somehow worse just because someone else makes even more profits.

And lets see the same thing for the other Android OEMs.
Which OEMs are you talking about? Not a Top 10 vendor for sure? Sony, Huawei and HTC are profitable

Reply Score: 1

RE[6]: Profit or market share
by Nelson on Mon 29th Jul 2013 00:49 UTC in reply to "RE[5]: Profit or market share"
Nelson Member since:
2005-11-29

Their profits don't become somehow worse just because someone else makes even more profits.


Let's dig further into this:

(Using Q1 2013 numbers, most recent I could find but will serve well for illustrative purposes)

It turns out that once you place numbers to the percentages it does matter. Samsung rakes in 95% of Android profits with $5.1 billion dollars in profit.

LG was second place with 100 million dollars in profit, leaving the remaining 100 million dollars for every other Android OEM to fight over

http://blogs.strategyanalytics.com/WSS/post/2013/05/15/Samsung-Capt...

Samsung's dominance is attributed to their complete and utter control of the supply chain and their sheer scale allowing them to crowd out every other OEM with marketing dollars. This is a huge freaking problem.

Which OEMs are you talking about? Not a Top 10 vendor for sure? Sony, Huawei and HTC are profitable


I'll ask you the same question I asked Thom: How much of that profit is derived from Android handset sales? Not much at all. I mean damn man, do a little research.

Reply Score: 3

RE[7]: Profit or market share
by chithanh on Mon 29th Jul 2013 09:03 UTC in reply to "RE[6]: Profit or market share"
chithanh Member since:
2006-06-18

How much of that profit is derived from Android handset sales? Not much at all. I mean damn man, do a little research.
The market is highly competitive and the margins are slim. So what? All the Android vendors among the top 10 smartphone vendors, plus dozens of smaller Chinese and Indian vendors show that you can sell Android for a profit.

Of course they cannot replicate the profit margins that Apple and Samsung are seeing, but there is no need to either.

Reply Score: 1

Comment by cdude
by cdude on Fri 26th Jul 2013 15:11 UTC
cdude
Member since:
2008-09-21

An this comes a week after Nokia's Elop changed his original "why not Android?" statement once more.

http://gadgets.ndtv.com/mobiles/news/nokia-ceo-explains-why-they-ch...

What a bad timing :-)

Reply Score: 1

RE: Comment by cdude
by Nelson on Fri 26th Jul 2013 16:10 UTC in reply to "Comment by cdude"
Nelson Member since:
2005-11-29

If you look at volumes shipped, Nokia is within spitting distance of those OEMs. They will crack that list before the end of the year.

According to you, they were going to be dead in Q2.

Reply Score: 1

RE[2]: Comment by cdude
by Thom_Holwerda on Fri 26th Jul 2013 16:21 UTC in reply to "RE: Comment by cdude"
Thom_Holwerda Member since:
2005-06-29

Including or excluding the rapidly declining Asha and feature phones?

Reply Score: 4

RE[3]: Comment by cdude
by Nelson on Fri 26th Jul 2013 18:55 UTC in reply to "RE[2]: Comment by cdude"
Nelson Member since:
2005-11-29

Excluding.

Reply Score: 3

RE[2]: Comment by cdude
by Bill Shooter of Bul on Fri 26th Jul 2013 16:28 UTC in reply to "RE: Comment by cdude"
Bill Shooter of Bul Member since:
2006-07-14

Its sometimes possible to be presented with a win win option, where you'll be successful regardless of which option you choose.

That's not really the point, the point the parent was making is that it wasn't the lose with android or win with Microsoft option that Elop thought it was.

I guess your point, which is masked with your blindly argumentative post, is that it wasn't a win with Android, lose with Microsoft option that many people think it was.

I'm not sure I can trust either set of numbers at this point. I'd like to wait and see how well Motorola does with the Moto X and a few more data points showing the robust health of the android manufactures as well as some more quarters of Nokia to see if windows phone adoption actually picks up enough steam to replace their former symbian revenues.

Reply Score: 2

RE[3]: Comment by cdude
by cdude on Fri 26th Jul 2013 17:36 UTC in reply to "RE[2]: Comment by cdude"
cdude Member since:
2008-09-21

LG is a prime example. They went WP, fall down to 2% marks share, shifted to Android just some time ago and have now near double as much smartphones sold this quarter then Nokia has (Asha's are not smartphones dear Nelson). Huawei and Lenovo are two more newcomers jumping from zero to profitable using Android.

Moto is exceptional, more difficult to compare with, cause of there stand as Google owned company. If Moto grows fast people, like our Nelson, will point out that's the reason. The other candidates, where no such inter-connection exists, are much closer to Nokia. Except Nokia, back then, would not start from zero but as market leader with the most loyal customer base. A highly profitable well-connected mobile gorilla multiple factors larger then Samsung and Apple back then.

Point is, those latest arguments given by Nokia's Elop why not also* Android are now even more wrong then before. That's what this article and the sudden success of LG, Huawei, Lenovo shows. Even Samsung shows it since back then it wasn't Samsung leading Android, it was HTC.

* The question is not and never was WP or Android. The question is why only WP? No competitor went all in**. Even ZTE, growing with Android, is also doing FirefoxOS now.

** Even Microsoft not went all in with Nokia. Samsung, HTC, Huawei do WP too.

Edited 2013-07-26 17:46 UTC

Reply Score: 4

RE[4]: Comment by cdude
by Bill Shooter of Bul on Fri 26th Jul 2013 18:10 UTC in reply to "RE[3]: Comment by cdude"
Bill Shooter of Bul Member since:
2006-07-14

The only reason I listed Motorola, is for the counter example. If Motorola can't be profitable despite its close ties to Google, well then its really difficult to make money with android and Nokia might have a valid point.

You can't forget that HTC despite its stellar phones and reviews is not very profitable with android. If others besides samsung are doing well, then it must be something HTC is doing wrong. When Nokia made the statement, they were kind of pointing at HTC as the poster child of a company destroyed by samsung.

Reply Score: 3

RE[5]: Comment by cdude
by judgen on Fri 26th Jul 2013 21:06 UTC in reply to "RE[4]: Comment by cdude"
judgen Member since:
2006-07-12

To be frank: The lack of HTC profits is due to paying the microsoft tax on trheir android devices. The others that are making money do not.

Reply Score: 3

RE[6]: Comment by cdude
by Bill Shooter of Bul on Fri 26th Jul 2013 21:12 UTC in reply to "RE[5]: Comment by cdude"
Bill Shooter of Bul Member since:
2006-07-14

I thought there were other vendors that had also capitulated. In anycase, I'd re-examine those. things like the fat patents shouldn't really be an issue if there is no external sdcard and they use MTP for file transfers.

Reply Score: 3

RE[5]: Comment by cdude
by Fergy on Sat 27th Jul 2013 18:01 UTC in reply to "RE[4]: Comment by cdude"
Fergy Member since:
2006-04-10

You can't forget that HTC despite its stellar phones and reviews is not very profitable with android. If others besides samsung are doing well, then it must be something HTC is doing wrong. When Nokia made the statement, they were kind of pointing at HTC as the poster child of a company destroyed by samsung.

And your point is that had they gone with only Windows Phone they would have flourished?
I liked my HTC Desire until HTC refused to update my phone. That meant I had to go Nexus to get the treatment I deserve. I wonder if that had something to do with HTC's nosedive? I also wonder if releasing 22 android phones in 2011 was smart.

Reply Score: 1

RE[6]: Comment by cdude
by Bill Shooter of Bul on Sun 28th Jul 2013 03:07 UTC in reply to "RE[5]: Comment by cdude"
Bill Shooter of Bul Member since:
2006-07-14

No, that's not my point at all. Go back and re read for comprehension. Its pretty stinking obvious.

Reply Score: 2

RE[5]: Comment by cdude
by cdude on Sun 28th Jul 2013 14:12 UTC in reply to "RE[4]: Comment by cdude"
cdude Member since:
2008-09-21

The only reason I listed Motorola, is for the counter example. If Motorola can't be profitable despite its close ties to Google, well then its really difficult to make money with android


That counter-example is wrong. If Motorola can't be profitable with Android then it shows only one thing: the close ties to Google are not competative advantage enough.

The whole mobile segment is full competition. Making products that sell good is what counts.

Reply Score: 1

RE[4]: Comment by cdude
by Nelson on Fri 26th Jul 2013 19:15 UTC in reply to "RE[3]: Comment by cdude"
Nelson Member since:
2005-11-29

LG is a prime example. They went WP, fall down to 2% marks share, shifted to Android just some time ago and have now near double as much smartphones sold this quarter then Nokia has (Asha's are not smartphones dear Nelson). Huawei and Lenovo are two more newcomers jumping from zero to profitable using Android.


I'm not counting Asha shipments, I don't much care. Nokia is fast approaching double digit millions with Lumia shipments, and them cracking that list will prove WP is moving mainstream. Something some have said was impossible.

LG never really tried with WP, Nokia did.


Moto is exceptional, more difficult to compare with, cause of there stand as Google owned company. If Moto grows fast people, like our Nelson, will point out that's the reason.


Actually no. Drop the strawman. Ill go on record and say that Moto wont really grow quickly at all. If they do, come back and quote me on this.

The other candidates, where no such inter-connection exists, are much closer to Nokia. Except Nokia, back then, would not start from zero but as market leader with the most loyal customer base. A highly profitable well-connected mobile gorilla multiple factors larger then Samsung and Apple back then.


Moto will likely do no better than LG or Sony. I'd be extremely surprised. Everyone says wait for Moto X, so I'll wait, but well see.

These were probably the only coherent set of points in your comment so I'll stop here.

Reply Score: 2

RE[3]: Comment by cdude
by Nelson on Fri 26th Jul 2013 19:08 UTC in reply to "RE[2]: Comment by cdude"
Nelson Member since:
2005-11-29

Its sometimes possible to be presented with a win win option, where you'll be successful regardless of which option you choose.

That's not really the point, the point the parent was making is that it wasn't the lose with android or win with Microsoft option that Elop thought it was.


There's still the issue of Samsung utterly dominating Android, which despite Thoms best efforts, isn't exactly disproven by these articles.

What is important is that Nokia is leading the Windows Phone charge and actively increasing volumes despite what many on this website wish would happen.

What's also important is that Nokia chose an OS more closely aligned to its own design centric nature and a partner in Microsoft which offered it much more financial support, both in the form of platform installments and in marketing dollars.

It also served to help them in todays competitive dynamic by offering a clear differentiation against a sea of Android, where OEMs are itching to hedge their bets against the established duopoly.

Its also kind of backwards to suggest a company under the financial strain Nokia was under would be able to do a three way juggle, or even two way between Symbian, Android, and WP.

That's an incredible proposition and I'm surprised that what would otherwise be very serious people are suggesting that.


I guess your point, which is masked with your blindly argumentative post, is that it wasn't a win with Android, lose with Microsoft option that many people think it was.


I think I am within my right, considering that I am the few that actually stake out a tangible position and provide hard estimates, and am willing to take people up on bets as to what will happen, to want to cash in when I am proven right.

Anyone who could read a damn financial report knew Nokia was in a bad, but not terminal state. I'm just tired of the faux insight peddled by people who preach a desired narrative. Its easy to get upvoted when the target audience hates Microsoft to begin with.

So yes, I will loudly proclaim when the bets I make pay off and when my analysis ends up being spot on. I suggest that Nokia will increase volumes, and in called a blind defender. When Nokia increases volumes, you bet your ass I'm going to be argumentative.


I'm not sure I can trust either set of numbers at this point. I'd like to wait and see how well Motorola does with the Moto X and a few more data points showing the robust health of the android manufactures as well as some more quarters of Nokia to see if windows phone adoption actually picks up enough steam to replace their former symbian revenues.


I think this is sensible, I'm waiting to see how Nokia holds up in Q3, in order to see if they can maintain momentum. I'm also interested in their bottom line moving forward given that the brunt of restructuring charges are behind them.

This is where underlying profitability and IFRS profit gaps start to become less pronounced and a clearer view of the company emerges.

Reply Score: 2

RE[3]: Comment by cdude
by zima on Fri 2nd Aug 2013 22:36 UTC in reply to "RE[2]: Comment by cdude"
zima Member since:
2005-07-06

see if windows phone adoption actually picks up enough steam to replace their former symbian revenues.

It needs to do more than that - Symbian formed a minority of Nokia revenue (and was a huge costs sink, with R&D budget ~3-4 years ago larger than the entire R&D of Apple; for meagre results...), what kept Nokia afloat all those years were Series40 "feature phones" ...sales of which are drying up, so far captured largely by lower-end Androids; but Lumia 520 supposedly shows promising sales...

Edited 2013-08-02 22:38 UTC

Reply Score: 2

RE[2]: Comment by cdude
by przemo_li on Sat 27th Jul 2013 07:29 UTC in reply to "RE: Comment by cdude"
przemo_li Member since:
2010-06-01

You mean ~8mln vs ~10-14mln?

That would be spitting distance (if seen in bigger picture of whole market)

Though:

1) Nokia loose 14% per Lumia sold (in 2Q13).
2) Nokia is far behind in actual GROWTH numbers (so likely Android OEM's will outpace Nokia even more in next quater)

Will see in next Q if this trend continue, and how good Nokia is at it.

Reply Score: 1

RE[3]: Comment by cdude
by Nelson on Sat 27th Jul 2013 12:09 UTC in reply to "RE[2]: Comment by cdude"
Nelson Member since:
2005-11-29


1) Nokia loose 14% per Lumia sold (in 2Q13).


And these are mainly due to increased operating expenses, but down dramatically YoY and also down sequentially. So things are getting better as Nokia cuts costs. I expect this trend to continue.

This is also an aside, as it has nothing to do with the volumes shipped.


2) Nokia is far behind in actual GROWTH numbers (so likely Android OEM's will outpace Nokia even more in next quater)


The YoY growth numbers for OEMs were impressive, no doubt. Triple digits is nothing to sneeze at.

Sequentially, LG for example sold 17% QoQ which Nokia outdid with over 30% growth in Lumia volume shipments.

For reference, the Smart Phone market grew 10% QoQ.
If Nokia keeps up this growth trajectory then they will indeed catch up to the Android OEMs rate of growth. Which kind of calls into question the "Windows Phone isn't selling" meme.


Will see in next Q if this trend continue, and how good Nokia is at it.


Indeed. I am interested in seeing if Nokia can sustain this growth into Q3.

Positive catalysts for me are:

- Introduction of the Lumia 1020
- Full Q availability of the Lumia 925
- Full Q availability of the Lumia 928
- Full Q availability of the Lumia 520/521
- 521 roll outs on MetroPCS and Prepaid AT&T in the US
- 625 roll out in China

The many simultaneous product launches will undoubtedly show a positive shift upwards in device ASP and in Lumia volumes. The magnitudes of these shifts is what's too early to tell, and once some reports start coming out it should make the picture less fuzzy ahead of the Q3 results.

I personally estimated 7.7 - 8 in Q2 so I was off a bit and probably due to a little confirmation bias, but we'll see.

Reply Score: 3

Poor chart
by tkeith on Fri 26th Jul 2013 16:26 UTC
tkeith
Member since:
2010-09-01

Why leave "other" at 42%? It would be nice to see where Motorola, HTC, Nokia and others stand. I'm guessing ZTE and Lenovo sales must be mainly from China since they're practically non-existent in the US.

Reply Score: 1

RE: Poor chart
by Lennie on Fri 26th Jul 2013 23:17 UTC in reply to "Poor chart"
Lennie Member since:
2007-09-22

yes, I noticed that too 42% is a lot. I guess an other large player in the other secion is Huawei ?

Reply Score: 2

RE: Poor chart
by Soulbender on Sat 27th Jul 2013 04:22 UTC in reply to "Poor chart"
Soulbender Member since:
2005-08-18

must be mainly from China since they're practically non-existent in the US


OR, you know, the rest of the world....

Reply Score: 4

RE[2]: Poor chart
by Nelson on Sat 27th Jul 2013 12:11 UTC in reply to "RE: Poor chart"
Nelson Member since:
2005-11-29

That's only a matter of time too imo. Lenovo is an excellent, smart, and capable OEM. They're practically the only good Windows OEM left, and they're coming in very strong into the mobile market.

They're a sleeper imo

Reply Score: 3

Raking in growing profits???
by bentoo on Fri 26th Jul 2013 18:23 UTC
bentoo
Member since:
2012-09-21

Nice spin. The article you posted actually agrees with the "common parlance that only Samsung is making a profit off Android."

More importantly, the company realized a profit from its steady diet of Android-powered smartphones, a feat that very few Android vendors have been able to realize.


Edited 2013-07-26 18:23 UTC

Reply Score: 2

Samsung profits on mobile
by Windows Sucks on Sat 27th Jul 2013 23:16 UTC
Windows Sucks
Member since:
2005-11-10

Interesting being that Samsung does not break out its mobile profits how do we know what Samsung makes on mobile.

Samsung electronics sells a lot more then just mobile phones and makes a ton of profits off Apple for chips and the like.

I will bet that Apple still makes a good amount more off the iPhone then Sammy makes off all it's phones.

Remember that Sammy's sales guesstimates (Since they don't give actual numbers) are 1. Based on sales into the channel and not to customers and 2. Include a ton of cheap low margin phones.

I think that if you take the cheap stuff out the mix you would see that Apple sells a good amount more phones on the high end and also makes a good amount more profit.

Reply Score: 1