Not Much Room to Grow
January 2nd, 2011, 1:08pm by KelvinI’ve been thinking that even though smartphones represent only 20% of the smartphone market, their revenue share doesn’t actually leave that much room to grow. I just ran across this year end cell phone stat sheet for 2010. The relevant data:
Average price of smartphones 332 US dollars, average price of dumbphones 61 dollars. The full price pyramid of phones is:
over 450 dollars – 5%
from 250-449 dollars – 9%
from 100-249 dollars – 17%
from 50-99 dollars – 24%
under 50 dollars – 45%
Interesting notes:
• Apple has a virtual monopoly on the highest tier market (only 50-60 million handsets are >$450, and Apple reports an ASP of $600).
• The top 22.5% of the market (virtually all smartphones) currently accounts for 62% of handset revenue.
Bottom line is even though you can still sell the other 80% a smartphone, it will need to appeal to that demographic. That probably means sub-$150 ASPs and no data plans.
January 21st, 2011 at 9:28 pm
Wow, the smartphone market isn’t what it used to be. HTC just posted earnings for 2010:
“Its decision to focus on Android for almost all of 2010 saw it reach a net profit of $501.2 million. A push on North America was evident as more than half of the $9.55 billion in revenue it made in all of 2010, 50.6 percent, came from North America; it shipped 24.6 million phones worldwide last year.”
http://www.electronista.com/articles/11/01/21/htc.has.banner.2010.promises.85m.in.q1.2011/
Remember the days when Palm guided to $1.6B for the a whole fiscal year and was expecting to break even? HTC is killing it on the top line, but GM (~29%) and opex ($2.1B) is really tough. All that work for a 5% operating profit. And it probably will get worse (for all manufacturers except Apple), when Android inevitably moves downmarket.