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Is there much money in making smartphones?

I often wonder if there's much money in smartphones. Fair enough for Apple and Samsung and maybe the rest of the Top 5, but what about Nokia/Microsoft, HTC, OnePlus, Jolla, Asus, Acer, Alcatel... the list goes on!

Most Useful Answer AhmadCentral  Nov. 19, 2014 at 19:43

There is money to be made. But only if you're growing at a good rate.

HTC for example are declining in terms of shipments with only 4.8m units shipped last quarter. At one point the were shipping 40m smartphones a year but now they'll be lucky to get much over 20 million. And in a smartphone market that is growing 20%+ every year that is not good.

Microsoft are in a similar position but not as bad, growth of Windows Phone has stagnated, it's not on a decline just yet but they'll need to start expanding some what if they want to be successful.

On the other hand, Apple are doing amazing even if they aren't growing massively YOY. The reason is because they are still growing slightly + the ASP of their phones is very high. Android and WP on the hand have low ASP's that are decreasing all the time.

Alcatel/TCL have shipments grow to 10.9m in the past quarter which is more than double last year. So TCL are having a wicked year, and Asus have gone from shipping 200,000 units in Q1 2014 to selling in over 4,000,000 units during this final quarter of the year. A number of brands like Xiaomi, Huawei and Coolpad are having great years in 2014 due to the fact their smartphone shipments are growing ahead of the curve and therefore leads to higher revenue/profit. Even LG are doing very well thanks to G3 release + higher shipments.

So basically if you're growing, there is money to be made. If you're stagnating or declining then you're going to have a bad time. Samsung are a good example to use, whilst they are still very profitable, their smartphone growth has been very low YOY for 2014 and therefore revenue is down and that will affect overall profits. But they're still number 1 so not in much trouble at the moment.

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AhmadCentral  Nov. 19, 2014 at 19:43

There is money to be made. But only if you're growing at a good rate.

HTC for example are declining in terms of shipments with only 4.8m units shipped last quarter. At one point the were shipping 40m smartphones a year but now they'll be lucky to get much over 20 million. And in a smartphone market that is growing 20%+ every year that is not good.

Microsoft are in a similar position but not as bad, growth of Windows Phone has stagnated, it's not on a decline just yet but they'll need to start expanding some what if they want to be successful.

On the other hand, Apple are doing amazing even if they aren't growing massively YOY. The reason is because they are still growing slightly + the ASP of their phones is very high. Android and WP on the hand have low ASP's that are decreasing all the time.

Alcatel/TCL have shipments grow to 10.9m in the past quarter which is more than double last year. So TCL are having a wicked year, and Asus have gone from shipping 200,000 units in Q1 2014 to selling in over 4,000,000 units during this final quarter of the year. A number of brands like Xiaomi, Huawei and Coolpad are having great years in 2014 due to the fact their smartphone shipments are growing ahead of the curve and therefore leads to higher revenue/profit. Even LG are doing very well thanks to G3 release + higher shipments.

So basically if you're growing, there is money to be made. If you're stagnating or declining then you're going to have a bad time. Samsung are a good example to use, whilst they are still very profitable, their smartphone growth has been very low YOY for 2014 and therefore revenue is down and that will affect overall profits. But they're still number 1 so not in much trouble at the moment.

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