Is something terribly wrong in mobile industry ?

mobile-handset-salesA new research note from Canaccord Genuity analyst T. Michael Walkley in Fortune raises question on the business strategy of majority of mobile phone manufacturers.

When you see the pie chart on the right, it is clear that Apple manufactures a tiny fraction (about 2.8%) of total handsets manufactured in the world, not a big players in terms of handsets sold.

Nokia, Samsung, and LG in the other hand are the major player with more than 65% of the share in the mobile industry. But, when we see the revenue those handsets bring, one can’t stop wondering what might be wrong in their business strategies.


When you see the chart above, Apple is gaining 39% of total revenue with its 2.8% handsets. Nokia, Samsung and LG get only 32% from the 65% of market share and others enjoy the 29% share.

Mobile phone is one of the innovative, fast changing, and profitable business. But, why only Apple is benefiting from it? It is to be noted that Apple has only one phone model – iPhone. The iPhone was the first smartphone to break the corporate barrier and has appealed the general people.

With the popularity of Android, release of Windows Phone 7, HP’s Palm push, and most unlikely Facebook phone, the equation should be changing soon. Inability of other players to challenge iPhone technologically, has triggered strong sales in spite of its 50% gross margin and 30%+ operating margin.


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