Seven predictions for handset OEMs
(11/13/2009 8:17 $Ä EST)
SAN JOSE, Calif. — Handset OEMs have recently launched a number of new phones.
Apple, Motorola, Nokia, Palm, Samsung and others have rolled out new products. So how are these products doing? And what are Google’s future plans in the arena?
Here’s what analysts think and predict:
1. IPhone fades
Daniel Amir, an analyst at Lazard Capital Markets, on Apple’s iPhone: ”Our latest channel checks indicate that October iPhone shipments increased 80 percent-plus over September levels, reaching a historical high at 5.4 million units. We believe that 1.1 million units were iPhone 3G and 4.3 million units were iPhone 3GS. iPhone shipments are projected to drop 40 percent in November (month-over-month) followed by another 14 percent month-over-month drop in December, in line with seasonality.
Total 4Q ’09 iPhone shipments are likely to come in at (about) 11 million units which equates to (about) 40 percent quarter-over-quarter growth and about 160 percent year-over-year growth. For 1Q10, initial projections target shipments of 7.2 million units, a 35 percent drop quarter-over-quarter and a 90 percent increase year-over-year. Overall, sell-through for 4Q for Apple should be in the 7.5 million unit range, which suggests that the build for China was significant.”
2. IPhone expands horizons (or Verizon)
Ashok Kumar, an analyst from Northeast Securities, on the iPhone: ”Our supply chain checks indicate that Apple will launch a WCDMA/CDMA 2000 iPhone through Verizon by summer. This Qualcomm powered world phone will facilitate Apple to be carrier agnostic.
We had stated before that the weak pre sales of iPhone at China Unicom will translate to disappointing sell through. Most of the take up thus far through China Unicom has been by their own employees who have been incentivized with heavy subsidizes on their tariff. In response to the weak adoption of iPhone in China, Apple is expected to cut prices. But weak WCDMA network coverage and unattractive plans remain structural head winds.”
3. Droid to bomb?
Kumar on Motorola’s Droid: ”We have argued earlier that the Droid is largely a me-too product and the take up will disappoint. Our checks indicate that the sales through the Verizon channel have moderated significantly since the launch.
We have posited that when the dust settles, Motorola’s offerings will be largely undifferentiated in an increasingly crowded Android lineup. The iPhone launch through Verizon next year will completely take the air out of the Motorola story.”
4. Nokia woes
Kumar on Nokia’s woes: ”The primary headwinds for Nokia are the mix shift to low end, continued share loss in smart phones and the resultant pricing and margin pressure. Weak capital outlays will also delay the recovery of the network segment. Less than 5 cents of every dollar of revenue drops to the bottom line and there is no turn around in sight.
Lack of product differentiation in Nokia high-end road map has significantly reduced the draw for application developers. While the Linux based Maemo platform is considered an improvement over Symbian OS, it is unlikely to garner much support in the developer community against Android and Linux Mobile.”
5. Samsung rules
Steven Pelayo, an analyst at HSBC, on Samsung’s handset business: ”3Q operating margins were flattish at (about) 10 percent as higher R&D/marketing offset by improved mix. Shipped 60.2 million units (+15 percent quarter-over-quarter and 16 percent year-over-year) for 20 percent global market share. Guides full year to 200 million units (+7 percent year-over-year verses overall market down). Now sees ASPs down high single digits this year (verses previous flat to slightly down).”
6. Slap a Palm
Kumar on Palm’s Pre: ”Our domestic sell through checks indicate a substantial decline in Pre sales in the first month of the current quarter. Heavy price discounting has thus far failed to stem the decline in sales. It appears unlikely that the launch of Pixi will reverse this negative trend.
Palm has limited carrier sponsorship (Sprint, Bell Canada, O2 and Telefonica). As a fading brand, carriers are likely to see better returns on their promotional and advertising dollars with other vendors. Palm has exited key markets and its geographic footprint limited to North America, UK, Germany and Spain further exacerbating the downward spiral.
WebOS has negligible smart phone OS share, 0.2 percent per Gartner estimates, and is unlikely to attract any meaningful third party application support. Palm has bet the farm on WebOS and there is a real possibility that they may not achieve critical mass.”
7. Google a contender?
Kumar on Google’s plans: ”Goggle is expected to launch a self-branded smartphone by year end followed by netbook early next year. In its smartphone push, Google is expected to embrace the retail channel at the expenses of carrier with the intent of greater account control. It will embed the same iteration of Android as the Motorola Droid. The hardware, featuring Qualcomm baseband, is expected to be competitive with Motorola’s offering.
Google is also expected to launch a branded netbook, again embedding Qualcomm Snapdragon, early next year. Thus far, Linux has not been able to get a toehold in the netbook segment. But the Chrome OS could be the tipping point.”