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Top 5 Handset Vendors Losing Ground to rich media specialists
Posted: 01-May-2008 [Source: Strategy Analytics]

[Strategy Analytics reports the top five handset vendors are experiencing reduced income while RIM, HTC and Apple continue on the upswing.]

Boston -- The Strategy Analytics Wireless Device Strategies service report, "Rich Media Specialists Increase Share Of Global $19 Billion Profits," reveals falling profits for the traditional top five handset vendors. Their share of industry profits has fallen from 92% in 2004 to 84% in 2007.

"The top 5 vendors may seem to be more dominant than 3 years ago but their income actually shrank," states Tom Kang, Senior Analyst in the Strategy Analytics Wireless Device Strategies service. "An internal focus of cost cutting and growing scale has drained off resources that should have been channeled into competitive assets for use in the new market landscape. It is no surprise that these same vendors are now struggling to find a viable strategy in this new market paradigm. RIM (Research In Motion) on the other hand has only 1% of the volume market, but was able to earn 6% of the industry profits, which raises them up to the number 4 spot."

"RIM has realized a 187% growth in profits over this timeframe and is redefining the competitive landscape of the global handset market along with Apple and HTC," adds Chris Ambrosio, Executive Director in the Wireless Practice at Strategy Analytics. "These rich media specialists have carved out a 16% share of industry profits in 2007 using a device appeal that is uniquely complemented by a powerful mix of value-added services, applications and rich-media presentation."

In addition Global ASPs have fallen at a 7% CAGR through 2007. The market catalyst vendors realize ASPs that are on average 250% higher than the industry average.

Table of Profit Share by Handset Vendor in 2007 Vendor Share of Realized Profits in 2007

Nokia 56%

Samsung 13.5%

Sony Ericsson 11%

LG 5%

RIM 6%

HTC 4%

Apple 2%

Source : Strategy Analytics

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