With the decline in the market share of traditional mobile phone giants, the performance of important chip providers such as Texas Instruments has been directly affected.
Texas Instruments yesterday (September 29) told the Daily Economic News reporter that “The decline in performance was caused by the declining overall economic environment, not caused by the reduction of single customer orders.â€
Some industry sources believe that the decline in the market of traditional mobile phone giants including Nokia has brought a significant impact to chip suppliers and foundries. It is inevitable that the latter two companies will improve their related businesses.
Nokia market is significantly down
According to the latest data from iMedia, the number of mobile phone users in China reached 930 million in 2011, an annual growth rate of 8.1%. In the stock data, the number of users of feature phones increased from 600 million in 2008 to 720 million in 2010, but the market share fell from 93.6% in 2008 to 88.3% in 2010. After entering 2011, the functional mobile phone market accounted for only 76%.
“The main reason for the decline in the market share of functional mobile phones is the impact of Android smartphones and iPhones.†Yi Yi Consulting CEO Zhang Yi said in an interview with “Daily Economic News†that the main reason for exiting the market was the use of MTK and Spreadtrum’s media. High-end price feature phones, as well as cottage phones with no guarantee of quality, Nokia also has a certain share in it. He also predicted that in 2012, China's feature phone users will drop to 630 million, accounting for 65.2% of the market.
Nokia's smartphone business is more affected by Android and iPhone. Data show that in the second quarter of this year, Nokia's global smartphone market share has dropped to third, from the 38.1% in the same period last year to the current 15.2%. The market share of Nokia's Saipan system in China's smartphone operating system slipped from 66.1% in 2008 to 38.5% in August 2010, while the Android system increased from 0.3% to 30.9%.
Related supporting companies are affected
"The decline in Nokia's market share has a great impact on the relevant chip manufacturers." Analysys International analyst Wang Ying believes that the first and foremost is Texas Instruments, which is the world's leading manufacturer of mobile phone chips.
According to market research agency Strategy Analytics, Texas Instruments' application processor output accounted for 85% of Nokia's total in 2010, and 92.7% of Saipan's mobile phone products. The company lowered its second-quarter sales forecast at the beginning of September, and its profit decreased by 13% compared with the same period of last year. The industry believes that the main reason is that Nokia orders have dropped sharply. According to the data, due to over-reliance on Nokia, TI's market share of application processors fell to 19.2% in the first quarter, which was far lower than the 34.5% in the same period of last year.
Texas Instruments related departments told the reporter of “Daily Economic News†that because Nokia is a very important customer of Texas Instruments, it is inconvenient to make too many comments on issues related to Nokia. A related person in the company stated that the current decline in performance was caused by the declining overall economic environment, not caused by the reduction of single customer orders.
It is not Texas Instruments that is affected by the decline in Nokia's performance. It is understood that the second quarter revenue of STMicroelectronics' wireless chip division, which provided mobile phone chips for Nokia, fell 34% year-on-year to US$347 million, with an operating loss of US$102 million.
Wang Ying said that the decline in the Nokia market has also affected its foundry business in mainland China.
Foxconn International's 2010 annual report shows that the company's orders from Nokia dropped by 10%, resulting in its 2010 revenue decline of 40% year-on-year. In the first half of 2011, revenue decreased year-on-year, and net profit even lost $18 million.
The same situation with Foxconn International is BYD Electronics. The latter's income for the first half of 2011 was 7.754 billion yuan, an increase of only 3.82% over the same period last year, and a net profit of 335 million yuan, a year-on-year decrease of 7.56%. Its parent company BYD Co., Ltd. (01211, HK) also stated in its financial report that delays in orders for the single largest customer of the company’s mobile phone business have affected the growth of the company’s mobile phone business performance. This single largest customer is Nokia.
Significant signs of transformation and development
"Not only Nokia's suppliers have been affected." Wang Ying said that the rise of the iPhone and smartphones using the Android operating system has eroded market share including BlackBerry maker RIM Corp. of Canada.
Apple and Samsung rely on their own design and manufacturing teams and do not purchase chips outside. Wang Ying believes that this allows chip makers to respond quickly to changes in hardware requirements.
Texas Instruments told reporters that it is optimistic about the market prospects of smart phones, tablet computers and Other products, and there are corresponding solutions to meet the rapidly growing customer demand. The company is currently investing heavily in the Android operating system and has targeted other device markets beyond smartphones, including video players, e-book readers and commercial devices.
Nokia's move to Microsoft Windows may be a new opportunity for chip makers. Wang Ying believes that Nokia's market and channel base are very good after all. The release of Windows is likely to help pull back some market share. Secondly, mobile phone manufacturers in the Android camp are affected by Google’s acquisition of Moto or re-select operating systems.
"Developing new customers and cooperating with China-made mobile phone manufacturers will be a good development direction. China's smart phone market is developing rapidly. The user base and development space can tell the capital market a very good story." Ai Media Consulting CEO Zhang Yi said. Foxconn International Chairman and Chief Executive Chen Weiliang stressed that the company's next priority is to develop new customers and continue to focus on the smart phone market.
The latest news shows that due to the continuous decline in the global market share of Nokia smartphones leading to insufficient demand, Taiwan's mobile phone component manufacturers, including Silitech, Merit Industries and Egao Technologies, have been making efforts to seek access to the supply of HTC and mainland mobile phone manufacturers. The chain, of which Hui Hui Industrial has successfully entered the supply chain of ZTE smart phones.
Texas Instruments yesterday (September 29) told the Daily Economic News reporter that “The decline in performance was caused by the declining overall economic environment, not caused by the reduction of single customer orders.â€
Some industry sources believe that the decline in the market of traditional mobile phone giants including Nokia has brought a significant impact to chip suppliers and foundries. It is inevitable that the latter two companies will improve their related businesses.
Nokia market is significantly down
According to the latest data from iMedia, the number of mobile phone users in China reached 930 million in 2011, an annual growth rate of 8.1%. In the stock data, the number of users of feature phones increased from 600 million in 2008 to 720 million in 2010, but the market share fell from 93.6% in 2008 to 88.3% in 2010. After entering 2011, the functional mobile phone market accounted for only 76%.
“The main reason for the decline in the market share of functional mobile phones is the impact of Android smartphones and iPhones.†Yi Yi Consulting CEO Zhang Yi said in an interview with “Daily Economic News†that the main reason for exiting the market was the use of MTK and Spreadtrum’s media. High-end price feature phones, as well as cottage phones with no guarantee of quality, Nokia also has a certain share in it. He also predicted that in 2012, China's feature phone users will drop to 630 million, accounting for 65.2% of the market.
Nokia's smartphone business is more affected by Android and iPhone. Data show that in the second quarter of this year, Nokia's global smartphone market share has dropped to third, from the 38.1% in the same period last year to the current 15.2%. The market share of Nokia's Saipan system in China's smartphone operating system slipped from 66.1% in 2008 to 38.5% in August 2010, while the Android system increased from 0.3% to 30.9%.
Related supporting companies are affected
"The decline in Nokia's market share has a great impact on the relevant chip manufacturers." Analysys International analyst Wang Ying believes that the first and foremost is Texas Instruments, which is the world's leading manufacturer of mobile phone chips.
According to market research agency Strategy Analytics, Texas Instruments' application processor output accounted for 85% of Nokia's total in 2010, and 92.7% of Saipan's mobile phone products. The company lowered its second-quarter sales forecast at the beginning of September, and its profit decreased by 13% compared with the same period of last year. The industry believes that the main reason is that Nokia orders have dropped sharply. According to the data, due to over-reliance on Nokia, TI's market share of application processors fell to 19.2% in the first quarter, which was far lower than the 34.5% in the same period of last year.
Texas Instruments related departments told the reporter of “Daily Economic News†that because Nokia is a very important customer of Texas Instruments, it is inconvenient to make too many comments on issues related to Nokia. A related person in the company stated that the current decline in performance was caused by the declining overall economic environment, not caused by the reduction of single customer orders.
It is not Texas Instruments that is affected by the decline in Nokia's performance. It is understood that the second quarter revenue of STMicroelectronics' wireless chip division, which provided mobile phone chips for Nokia, fell 34% year-on-year to US$347 million, with an operating loss of US$102 million.
Wang Ying said that the decline in the Nokia market has also affected its foundry business in mainland China.
Foxconn International's 2010 annual report shows that the company's orders from Nokia dropped by 10%, resulting in its 2010 revenue decline of 40% year-on-year. In the first half of 2011, revenue decreased year-on-year, and net profit even lost $18 million.
The same situation with Foxconn International is BYD Electronics. The latter's income for the first half of 2011 was 7.754 billion yuan, an increase of only 3.82% over the same period last year, and a net profit of 335 million yuan, a year-on-year decrease of 7.56%. Its parent company BYD Co., Ltd. (01211, HK) also stated in its financial report that delays in orders for the single largest customer of the company’s mobile phone business have affected the growth of the company’s mobile phone business performance. This single largest customer is Nokia.
Significant signs of transformation and development
"Not only Nokia's suppliers have been affected." Wang Ying said that the rise of the iPhone and smartphones using the Android operating system has eroded market share including BlackBerry maker RIM Corp. of Canada.
Apple and Samsung rely on their own design and manufacturing teams and do not purchase chips outside. Wang Ying believes that this allows chip makers to respond quickly to changes in hardware requirements.
Texas Instruments told reporters that it is optimistic about the market prospects of smart phones, tablet computers and Other products, and there are corresponding solutions to meet the rapidly growing customer demand. The company is currently investing heavily in the Android operating system and has targeted other device markets beyond smartphones, including video players, e-book readers and commercial devices.
Nokia's move to Microsoft Windows may be a new opportunity for chip makers. Wang Ying believes that Nokia's market and channel base are very good after all. The release of Windows is likely to help pull back some market share. Secondly, mobile phone manufacturers in the Android camp are affected by Google’s acquisition of Moto or re-select operating systems.
"Developing new customers and cooperating with China-made mobile phone manufacturers will be a good development direction. China's smart phone market is developing rapidly. The user base and development space can tell the capital market a very good story." Ai Media Consulting CEO Zhang Yi said. Foxconn International Chairman and Chief Executive Chen Weiliang stressed that the company's next priority is to develop new customers and continue to focus on the smart phone market.
The latest news shows that due to the continuous decline in the global market share of Nokia smartphones leading to insufficient demand, Taiwan's mobile phone component manufacturers, including Silitech, Merit Industries and Egao Technologies, have been making efforts to seek access to the supply of HTC and mainland mobile phone manufacturers. The chain, of which Hui Hui Industrial has successfully entered the supply chain of ZTE smart phones.
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