The global handset market was up by 13% in Q2 this year to 308 million shipments, after sales were bolstered by particularly successful quarters from HTC and Apple. The growth sees the market on the road to recovery, with around 1.3 billion units shipped by the end of the year, according to analyst firm CCS Insight.
HTC reported a 36% increase in profit year on year and 65% sequentially for the three months ended 30 June 2010 to £187m.
One of HTC’s biggest spikes was in shipments. During Q2 2009, the manufacturer shipped three million units, and in Q1 this year it increased shipments by 300,000 to 3.3 million. During Q2 2010, shipments grew to 5.4 million units – a surge of 2.1 million, over three months.
However, gross profit margin fell from 30.6% last quarter to 29.7% this quarter, as the manufacturer’s portfolio widened to include entry-level handsets.
CCS Insight analyst Geoff Blaber said: ‘HTC’s margin was down because its portfolio has changed since last year. It has relatively high tier handsets but it now has a strong range of entry products such as the Wildfire and Smart.’
Meanwhile, struggling manufacturer Nokia reported a 40% year on year decline in profits for the three months ended on 30 June 2010 to £191m. LG, which has never before reported a loss in its handset division, posted a shortfall of £64m for Q2.
Blaber said: ‘Nokia’s problem is a long-term one. Symbian is under-performing, and they were caught flat-footed by the iPhone and the shift to touch. On the devices side, they need to compete at the top end. The N8 at the end of the year will help but they still lack a platform. They face difficult challenges ahead.’
He added: ‘LG’s portfolio hasn’t evolved while the other manufacturers have. It’s going to take some time for LG to get back on track. HTC has had a strong quarter, despite component shortages. But there is a huge gap between Apple and the others in terms of margin.’
Apple reported record second quarter earnings as the iPad helped boost revenues 88% to £10.2bn. Profit was up 78% to £1.9bn, while the number of iPhones sold rose 61% year on year to 8.4 million.
RIM sold 11.2 million handsets, slightly ahead of Sony Ericsson’s 11 million.
But Sony Ericsson, which suffered in 2009 due to software problems and plummeting profits, reported a second consecutive quarterly profit, driven by sales of its Xperia X10 and Vivaz smartphones.
Meanwhile, Samsung posted an operating profit of £340.5m on revenue of £4.7bn. The company sold 63.8 million handsets during the second quarter, an increase of 22% year on year.
Blaber added: ‘RIM has been phenomenal and Apple is out performing, especially in margin.’
Motorola reports profit up six-fold
Motorola has reported a six-fold increase in profit to £104m, as it issued an optimistic outlook for its handset division. Motorola’s mobile division saw revenue fall by 6% to $1.08bn during the second quarter ended 30 June. The company sold 2.7 million smartphones in the quarter, up from 2.3 million during the previous quarter, and 5.6 million basic handsets.