Smart Phones Boom Lifts Cell Phone Market
- By Abimbola Tooki
- Published May 2nd, 2011
- News
- Unrated
Strong demand for smart phones gave a further boost to overall cell phone market volumes in January to March, making iPhone supplier Apple a rare winner on the market.
International Data Corporation (IDC) saw January-March market growth of 20 per cent, helped also by strong gains by smaller vendors as the three largest phone makers – Nokia, Samsung Electronics and LG Electronics – lost market share. “The iPhone once again sold particularly well in developed economic regions of the world,” IDC said. Apple is now within striking distance to LG, which had 6.6 per cent market share in the quarter. Nokia’s share dropped to 29 per cent from 35 per cent a year ago, while Samsung slipped to 19 per cent, IDC said.
Strategy Analytics estimated handset shipments grew 17 per cent from a year ago, driven by surging smart phone demand in mature regions and increasingly popular models with multiple SIM cards in emerging markets.
Meanwhile, Microsoft reported a dip in quarterly sales of its core Windows operating system, mirroring a recent downturn in PCs and sending its shares down slightly. The world’s largest software company met Wall Street profit estimates after strong sales of its Office suite of applications and Xbox game systems took up the slack.
But its stock has waned in past weeks, spooked by a dip in PC sales, which generate most of its revenue, and by fears the Apple iPad and other mobile devices will eventually erode the PC business.
“Microsoft to me is no longer a growth stock, but it is a very attractive value stock. They continue to generate tremendous free cash flow. Their balance sheet is really unmatched,” said Channing Smith, co-manager of the Capital Advisors Growth Fund.
“What you will begin to see is a shift away from growth investors. You are seeing that transition where Microsoft is in no man’s land, but I think they will become increasingly more attractive to value investors.”
Microsoft has sold a record-breaking 350 million licences for its Windows 7 operating system since releasing it 18 months ago, but demand appears to be waning in an uncertain economy.
PC sales, the engine guiding Microsoft’s financial success, fell one per cent in the first three months of the year, according to one research firm.
Despite the dip in the Windows unit, overall sales rose 13% to $16.4 billion, ahead of the $16.2 billion expected by analysts, helped by sales of Office and its Xbox game system and Kinect add-on.
Sales at its Windows unit fell four per cent to $4.4 billion, but that was offset by a 21 per cent increase at the Office unit to $5.2 billion, as people continued to buy copies of the new Office 2010, released last year.
The entertainment and devices unit, which makes the Xbox and phone software – posted a 60 per cent increase in sales to $1.9 billion, mostly due to the success of the Kinect motion-sensor, released last November.
The online services unit, which runs the Bing search engine and MSN Web portal, raised revenue 14 per cent to $648 million, but it still made a loss of $726 million in the quarter as Microsoft continued to step up efforts to challenge Google in Internet search. The unit has now lost $7 billion in four years.
International Data Corporation (IDC) saw January-March market growth of 20 per cent, helped also by strong gains by smaller vendors as the three largest phone makers – Nokia, Samsung Electronics and LG Electronics – lost market share. “The iPhone once again sold particularly well in developed economic regions of the world,” IDC said. Apple is now within striking distance to LG, which had 6.6 per cent market share in the quarter. Nokia’s share dropped to 29 per cent from 35 per cent a year ago, while Samsung slipped to 19 per cent, IDC said.
Strategy Analytics estimated handset shipments grew 17 per cent from a year ago, driven by surging smart phone demand in mature regions and increasingly popular models with multiple SIM cards in emerging markets.
Meanwhile, Microsoft reported a dip in quarterly sales of its core Windows operating system, mirroring a recent downturn in PCs and sending its shares down slightly. The world’s largest software company met Wall Street profit estimates after strong sales of its Office suite of applications and Xbox game systems took up the slack.
But its stock has waned in past weeks, spooked by a dip in PC sales, which generate most of its revenue, and by fears the Apple iPad and other mobile devices will eventually erode the PC business.
“Microsoft to me is no longer a growth stock, but it is a very attractive value stock. They continue to generate tremendous free cash flow. Their balance sheet is really unmatched,” said Channing Smith, co-manager of the Capital Advisors Growth Fund.
“What you will begin to see is a shift away from growth investors. You are seeing that transition where Microsoft is in no man’s land, but I think they will become increasingly more attractive to value investors.”
Microsoft has sold a record-breaking 350 million licences for its Windows 7 operating system since releasing it 18 months ago, but demand appears to be waning in an uncertain economy.
PC sales, the engine guiding Microsoft’s financial success, fell one per cent in the first three months of the year, according to one research firm.
Despite the dip in the Windows unit, overall sales rose 13% to $16.4 billion, ahead of the $16.2 billion expected by analysts, helped by sales of Office and its Xbox game system and Kinect add-on.
Sales at its Windows unit fell four per cent to $4.4 billion, but that was offset by a 21 per cent increase at the Office unit to $5.2 billion, as people continued to buy copies of the new Office 2010, released last year.
The entertainment and devices unit, which makes the Xbox and phone software – posted a 60 per cent increase in sales to $1.9 billion, mostly due to the success of the Kinect motion-sensor, released last November.
The online services unit, which runs the Bing search engine and MSN Web portal, raised revenue 14 per cent to $648 million, but it still made a loss of $726 million in the quarter as Microsoft continued to step up efforts to challenge Google in Internet search. The unit has now lost $7 billion in four years.
