Mixed fortunes
It looks like it's a lot easier to make money from selling phone components than it is the phones themselves.
Three giants of the mobile phone world announced their quarterly earnings in the past 24 hours, and while Qualcomm beat expectations with a record quarter, Nokia announced further losses of mobile phone market shares, while Motorola forecast an unexpected loss for this quarter.
Qualcomm managed to increase its revenues for the quarter ending 26 December 2010 by 25 percent to $3.35 billion, yielding a net income of $1.17, which was a 39 percent increase. "We are very pleased to report record revenues, earnings per share and MSM chipset shipments this quarter driven by increased demand for smartphones and data-centric devices across an expanding number of regions and price points," said Paul Jacobs, chairman and CEO of Qualcomm.
"We continue to execute on our strategic objectives as our partners leverage our technologies and solutions to offer leading wireless products and services to consumers around the globe. We believe we are uniquely positioned to benefit from these industry trends and are substantially raising our revenue and earnings guidance for the fiscal year."
Whether Nokia and Motorola are so well positioned remains debatable. The big issue both of them face is the transition from the feature-phone to the smartphone as the default choice, for the developed world at least. While both have, in their time, been at the top of the mobile game, the likes of Apple, Samsung and HTC are out-performing them in smartphones.
In its earnings announcement, Nokia revealed its total mobile device market share last year fell from 34 percent to 32 percent. Apparently, in the subsequent analyst call, Nokia said its smartphone share was down to 31 percent, from 40 percent a year ago and 38 percent the previous quarter. This is in spite of Nokia selling 36 percent more ‘converged mobile devices'.
"In Q4 we delivered solid performance across all three of our businesses, and generated outstanding cash flow," said Nokia CEO Stephen Elop. "Additionally, growth trends in the mobile devices market continue to be encouraging. Yet, Nokia faces some significant challenges in our competitiveness and our execution. In short, the industry changed, and now it's time for Nokia to change faster."
Moto's results for the last quarter were in line with general expectations, but its forecast of a "net loss of $26 million to $62 million," wasn't. "The improvement in our financial results last year, including profitability in the fourth quarter, is indicative of the progress we have made in delivering innovative smartphones and improving the Mobile Devices business," said Sanjay Jha, chairman and CEO of Motorola Mobility.
"Our Home business performed well and remains a premier provider of digital set-tops and end-to-end video solutions. With the global opportunities ahead, along with our diversified portfolio, our brand, and our people, we are well positioned to grow, and further improve our financial results in 2011."
