The smartphone market performed fairly well in the September quarter, posting an increase of 3% year on year in terms of global shipments and accounting for 58% of the total phones shipped. ASP (average selling price) declined 1% sequentially, but overall it was up 11% year on year on an improving smartphone mix. BMO capital market analysts Tim Long, Alex Spektor and Ari Klein upgraded their global handset model after noting the third quarter performance of the phone market.
Analysts note that the update “is slightly lighter than our prior estimates.”
Smartphone ASP to decline
For fiscal 2013, total unit growth is estimated at 4.2% compared to 4.5% growth expected in the previous report. Also, analysts note that the smartphone market will surge 38% over the same period, instead of 37% modeled previously. Industry ASP was expected to rise by 12% in 2013 while ASPs for smartphone may decline by 10%. In the third quarter, revenue through handsets increased 16%, which is ahead of last year’s 12% growth.
Overall, analysts expect ASP of the industry to go up backed by increasing an smartphone mix, reaching $210 in 2016.
Apple, Samsung to dominate
Analysts are expecting that Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) and Apple Inc. (NASDAQ:AAPL) will dominate the Industry. For the third quarter, Samsung outpaced rivals in the industry in terms of units and revenue, whereas Apple dominated through profit share. Both Samsung and Apple took away over 95% share of operating profits. According to analysts, both theses smartphone leaders invest in sales and marketing as well as research and development more than any other smartphone maker, which will lead them to dominate the major share of revenue and profit.
Company takeaways
Analysts note that Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) shipped the “industry’s highest-ever Q3 volume,” which totaled to 120 million handsets. The company garnered a 28% global market share, which is almost two times that of Nokia. In smartphone segment, total units shipped by Samsung were above the next five rivals combined. The report notes that ASP for Samsung handsets will come down 8% quarter on quarter to $228 in the third quarter. Also, the greater mix of smartphones was unable to stop smartphone ASP from declining 11% quarter over quarter to $299.
Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has outperformed the analysts’ expectations and shipped 8.8 million Lumia in the third quarter fueled by strong sales of the low-priced Lumia 520. Average selling price has declined 9% quarter on quarter to $193.
The revenues of CDMA and LTE based devices look strong as well, which is a positive for Qualcomm.
