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Visualized: Apple and Samsung occupy the 99 percent... of phone profits
Financial maven and maker of beautiful graphs Horace Dediu has found that between the top eight mobile phone vendors, Apple and Samsung share 99 percent of the total spoils. Of RIM, LG, Sony (Ericsson), Motorola, Nokia and HTC, only the latter made a profit -- claiming that left over one percent. The remaining six all recorded losses for the quarter, Mr. Deidu adding that several of those companies are carrying feature phone businesses that they should shed before they become an albatross around their neck.
Sharp posts $1.4 billion extraordinary loss, refocuses on mobile displays
Sharp has reported an extraordinary loss of 117.1 billion yen ($1.4 billion) for the financial year ending March 2012. The company has cited restructuring costs and inventory losses as the causes for the write-down, but also projected that its TV business would lose a further 18.7 percent of its projected sales in the current year. The company has decided to convert some of its big-screen LCD production lines into mobile LCDs as it tries to reassert its dwindling display business. It's yet more bad news after the company sold part of its LCD manufacturing business to Hon Hai, Sony withdrew from a joint venture and refused to deal with Sharp in the future, plus an 86 percent collapse in profits.
Nintendo confirms that it's selling 3DS at a loss, expects that to change
Ever since Nintendo slashed the price of the 3DS, there's been plenty of speculation that the gaming giant has been selling the portable console at a loss. The company acknowledged that fact during its disappointing earnings report, stating, "its hardware has been sold below cost because of its significant price cut in the fiscal year ended March 31, 2012," something that's uncharacteristic of the company's past operations. But as with its fairly unfortunate financials, the company plans to turn things around, adding, "Nintendo expects to cease selling it below cost by the middle of the fiscal year ending March 31, 2013."
Sprint reports Q1 2012 results: 1.5 million iPhone sales but a $255 million operating loss
Sprint Nextel has just deployed its Q1 2012 financials and it's a bit of a mixed bag, with a five percent net revenue growth over this time last year and a whopping 1.5 million sales of that iPhone it paid so dearly for -- twice as many as it sold last quarter and, of those, 44 percent were new subscribers. That helped to drive an overall postpaid subscriber growth of 263,000 but, despite some good news, the company is still suffering a $255 million operating loss and a $863 million net loss. Sprint reaffirmed its LTE plans, a pilot launch of six cities sometime in the middle of this year, with 12,000 sites going online before 2012 turns a year older. Will it be enough? Tune in next quarter to find out.
Huawei 2011 financials: 20 million smartphones sold yet profit down 53 percent
Huawei's annual earnings report is out and it's a mixed bag, since while turnover increased by 11.7 percent to 203.9 RMB ($32.3 billion), profits plummeted 53 percent to 11.6 billion RMB ($1.8 billion). Revenue from overseas sales (138.4 billion RMB) equated for over half the company's total income and it boasted of having sold 150 million consumer devices, including 20 million smartphones in the year. The company didn't provide reasons for the drop in profit, emphasizing that it's increased R&D spending by 34.2 percent to 23.7 billion RMB ($3.75 billion) and that in any event, it's got around $30 billion of assets that can shoulder the brunt of a bad year. However, the company may not see a rosy 2012 either, after both America and Australia refused to give the company big infrastructure deals (Huawei's bread and butter) thanks to allegedly close relationships between the company and the Chinese government. It seems to be following a similar trajectory to rival ZTE, which also felt margins squeeze as it entered the global retail space and felt the heat when its political dealings were thrown in the spotlight.
Sony revises projections, sees $6.4 billion net loss for 2011
While we wait to hear Kaz Hirai's new plan for Sony, the news is getting worse before it gets better. The company just announced new projections that are more than double the net loss it predicted in February for the fiscal year 2011, to the tune of $6.4 billion. The reason? According to Reuters, it's additional tax expenses that are causing the pain, as Sony says it's "due to the establishment of valuation allowances against certain deferred tax assets, predominantly in the U.S." There is a silver lining to this cloud however, as the company is projecting an operational profit of 180 billion yen ($2.2 billion US) in 2012, compared to a loss of 95 billion yen ($1.16 billion US) last year. There are already predictions that Kaz will announce significant cuts in jobs and bonuses on the 12th, and from the numbers in the PDF linked below you can see why.
Nokia submits yearly SEC report, details €1.4b loss and Windows Phone risks
Nokia submitted its annual report (Form 20-F) to the SEC today, and -- as required of all publicly traded companies -- the information provided a candid overview of its financial health and market risks. Based on its quarterly reports, we've already known it was a rather bleak year for the Finnish outfit, which saw a €1.4b annual loss compared to €1.3b in profit just one year ago. Further, its net sales similarly took it on the chin, which amounted to €38.6b in 2011 versus €42.4b in the previous year. In terms of units sold, Nokia pushed out 339.8m feature phones during the year -- a three percent decline from the 349.2m units sold during 2010. The company attributed the drop to its aggressively priced competitors, as well as its lack of a dual-SIM handset for the first half of the year. Nokia's smartphone segment took an even harder hit, which fell to 77.3m units sold -- a 25 percent drop from the 103.6m devices shipped just one year ago. Once again, the company cites its aggressive competition as the primary factor for the decline, along with a waning interest in the Symbian platform.In its discussion of potential threats to the company's bottom-line, Nokia provides a rather forthright assessment that accurately pegs its future success in the smartphone marketplace upon the acceptance of Windows Phone among developers and consumers. Likewise, its projections to sell 150 million Symbian units is failing to materialize -- big shocker there -- and Nokia now expects demand for its homegrown platform to continue deteriorating. Nonetheless, it remains stalwart in the commitment to support Symbian through 2016 -- though surprisingly, no comment on how this in itself could be a disaster to the company's bottom-line. Should Nokia's smartphone effort fail, that leaves it with the Series 40 feature phone segment, which it characterizes as a low-margin business that may see its demand erode as smartphones reach even lower price points. Nobody ever said that the mobile industry was a bed of roses, but if you'd like to view the world through Nokia's eyes, you're certain to find its commentary (pages 13 - 47 of the source document) an interesting read.
Sprint reveals it spent $15.5 billion to fuel its iPhone hunger
Sprint's SEC filings have revealed that the carrier has committed to purchasing $15.5 billion worth of iPhones as part of the long-promised $20 billion gamble. If each handset costs around $630 at trade, then we're talking about the network holding nearly 24 million units. Given that the company most recently ate a loss of $1.3 billion, most of which was caused by carrier subsidies for the 4S, there's a genuine fear that the company won't be able to make enough back on each customer to offset the initial outlay. Given the Baller-style purchasing decisions of Dan Hesse of late, we'll be watching how this unfolds with great interest and our fingers very firmly crossed.
Panasonic names Kazuhiro Tsuga as new president after old one loses $9 billion
In the aftermath of company losses that passed $9 billion, Panasonic has announced that Fumio Ohtsubo is to step down as company president. He'll be replaced by current senior executive Kazuhiro Tsuga in an executive reshuffle that'll take place in June, when Ohtsubo will step up to become chairman of the board, replacing Kunio Nakamura who is taking an "advisory role." Tsuga was formerly an exec. at Matsushita (before it was renamed... Panasonic. Confusing, we know), where he spent a lot of time thumbing his nose at HD DVD and promising that Blu-Ray would win the last format war -- so we know his instincts are at least halfway decent.
Nikon posts Q3 2011 earnings, sees significant losses due to Thailand floods
Nikon posted its Q3 earnings report this morning, and there isn't a whole lot to smile about. The cameramaker had to swallow a one-off loss of ¥10.9 billion last quarter (approximately $143.1 million), due to widespread flooding that devastated its Thailand manufacturing plant, in October. Today's report comes just a day after Sony issued similarly dire figures, which it largely attributed to last year's flooding, as well. For the third quarter ended December 31st, Nikon posted a ¥3.7 billion loss (about $48.6 million), compared with the ¥9.7 billion ($127.3 million) it saw in net profits over the same period in 2010. Operating profits also fell to ¥8.2 billion from ¥18.6 billion in 2010, while total revenue dropped from ¥253.8 billion in Q3 2010 to ¥215.4 billion, last quarter. The company remains optimistic about the future, though, forecasting net gains of ¥55 billion this year, coupled with an expected revenue of ¥925 billion. For the full report, check out the source links below.
Nintendo releases quarterly earnings report: 61 percent drop in profit, grim forecast
Nintendo released its latest quarterly earnings report this morning and, as with last quarter's report, there's not a whole lot to celebrate. The company posted profits of ¥40.9 billion (about $631.6 million) for the October - December period, representing a 61 percent quarterly drop. That's especially disappointing, considering that this period has traditionally been strong for Nintendo, which had previously forecast an operating profit of ¥1 billion (around $12.9 million). Those forecasts have since changed, however, with the manufacturer now predicting a ¥45 billion ($580 million) operating loss for the full year, ending March 31st. Nintendo blames the poor showing to sagging 3DS sales, which have forced it to slash prices. Also on Thursday, President Satoru Iwata told reporters that his company plans to release its new Wii U console across the US, Europe Australia and Japan in time for the 2012 year-end holiday season. Read the report in full, at the source link below.
Sony Ericsson swallows $317 million pre-tax loss as end draws near
Sony Ericsson's tearful breakup continues with more woe as as the venture had to eat a pre-tax loss of €247 million (roughly $317 million). Bosses cited "unfavorable macro-economic conditions" and the Thai flooding as the reasons for the loss. Ericsson probably won't mind having such an unfavorable penultimate quarter with the company, given that it's set to receive €1.05 billion (around $1.9 billion) when Sony buys out its share of the joint telecoms business within the next month.
Apple could face huge potential loss if Motorola wins in German court
So far, Apple has been faring pretty well on the various patent disputes it's currently fighting against Samsung and other companies, but Apple's own lawyers agree that stakes are higher than usual in a German case that Motorola has filed against the company. If a German court upholds the order that's trying to halt sales of Apple products in that country because of the patent dispute, Apple says it might lose as much as US$2.7 billion in potential sales. Apple's legal team is arguing that if the order does indeed go through, Motorola should have to put that money up in a bond while the case is still under investigation by the courts. But a lot of this is legal posturing -- as the judge in the hearing says, he's "not yet entirely sure that amount adequately mirrors the commercial value of this dispute." Obviously Apple wants the bond to be as high as possible; if Motorola flinches and can't put up the bond when asked, the case could be weakened. At any rate, there's plenty of time to decide, since the court's ruling isn't due until February 3. It seems unlikely that Motorola could stop Apple's sales in Germany completely, but it sounds like if Motorola pushes to do so, Apple will try to make it pay.
Sony posts $350 million loss in Q2 earnings report, forecasts full-year loss
Sony's Q2 earnings have just come in and, as you might guess, they're not particularly glowing. A few days after announcing plans to buy out Ericsson's stake in Sony Ericsson, the manufacturer posted a quarterly loss of ¥27 billion ($346 million) today, compared with a net income of ¥31.1 billion during the same quarter last year. Last quarter, the firm posted a net loss of ¥15.5 billion, or about $200 million. Sony attributed much of this decline to a stronger yen, lower TV sales and recent flooding in Thailand, which has disrupted its supply chain. On this basis, the company lowered its full year forecast, predicting a net loss of ¥90 billion ($1.2 billion), compared with a net profit of ¥60 billion that it had previously expected. It appears, then, that Sony's TV division is primed to post an annual loss for the 8th straight year, which would certainly explain those plans for a forthcoming shakeup. Find the full report at the source link, below.
Nintendo posts first half loss in earnings report, slashes forecast yet again
Nintendo's latest earnings report may be one of its most forgettable. The company posted a net loss of ¥70.27 billion ($923 million) this morning, in a report covering the first six months of the fiscal year ending on September 30th. That's significantly deeper than the ¥2.01 billion loss Nintendo posted during the same period last year, though Nintendo attributed the result, in part, to a strengthened yen and sagging demand for its 3DS console. Revenue, meanwhile, fell by 40.6 percent on the year, to ¥215.74 billion ($2.84 billion), as the manufacturer reported an operating loss of ¥57.34 billion. Things are looking so bleak, in fact, that Nintendo has decided to slash its financial projections yet again, predicting a net loss of ¥20 billion for the full year (ending in March 2012), compared with the ¥20 billion in profits it projected only in July. And, as Bloomberg notes, if these prognostications hold true, it would mark Nintendo's first annual loss in a full 30 years. Ouch. Check out the full report for yourself at the source link, below.
Acer chairman: iPad "fever" will recede
One thing you can say about the founder and chairman of Taiwan-based PC maker Acer -- they're optimists. A few weeks ago, TUAW ran a story about Acer founder Stan Shih, who was quoted as saying that iPads were a "fad." Now Acer chairman J.T. Wang is on the record in a Reuter's post as saying that "tablet PC fever is receding," and notebooks will regain consumer interest. Wang's comments were made in the face of a T$6.79 billion (US$234.3 million) loss in the second quarter ending June 30. That loss was more than double what analysts expected, and is typical of what most PC makers are seeing with the iPad and other mobile devices eating into sales of netbooks and other low-margin laptops. Acer does stand to benefit from the departure of HP from the PC business. Acer is the number two supplier of consumer PCs in the European market, and between the cold fact of HPs absence and the wishful thinking of Wang that tablets will just go away, the company might be able to make a profit again in the future.
Acer loses $234 million in worse-than-expected Q2
It may be the second largest computer manufacturer in the world, but things are not looking good for Acer. The Taiwanese company lost 6.79 billion New Taiwan Dollars (TWD), about $234.1 million, in Q2, far more than the already sizable anticipated shortfall of 3.3 billion TWD (around $114.7 million). That's a dramatic drop off from the 1.19 billion TWD profit the company posted in Q1. Things are expected to improve in Q3, but Acer still expects to operating in the red until at least Q4. Some of the problems can be blamed on recent restructuring that has the vendor increasingly focused on mobile devices and less on netbooks, which were successful for the company but have quickly declined in popularity. The extremely brief PR can be found after the break.
Motorola Mobility reports $56 million net loss in Q2, $3.3 billion in revenue, Bionic debut in September
Back in the last quarter of 2010, Motorola Mobility predicted a rocky road for future business, and its Q2 earnings seem to be right on track. The company reported total net revenues of $3.3 billion in the second quarter, up 28 percent year-over-year, but saw a net loss of $56 million, compared to earnings of $80 million in the second quarter of 2010. Mobile Devices saw an operating loss of $85 million, compared to the previous year's earnings of $87 million. Moto's not all doom and gloom however, as it predicts profitability in mobile devices by Q4. In terms of sales, the company reportedly shipped 11 million mobile devices, including 4.4 million smartphones and 440,000 Xoom tablets. Here's hoping Motorola's powers of prediction remain strong.Full PR after the break. We'd heard that the Droid Bionic was "coming soon," but up until today, we still didn't have a firm date for the LTE Android phone. Well, the cat is sort of out of the bag, as Mobility CEO Sanjay Jha has just announced that the long-awaited handset will hit stores in September. When in September is still anyone's guess, but we'll keep you posted as we learn more.
Nokia Q2 2011: 'clearly disappointing' results as challenges prove 'greater than expected'
With Nokia still yet to fully dive in to the Windows Phone swimming hole, you had to know it was going to be another ugly quarter's worth of results. And it is. The company just posted its Q2 2011 numbers and there's a definite downward trend. Operating profits declined 44 percent since Q1, 391 million Euro compared to 704, and net sales of mobile devices are down 23 percent over the same period -- 20 percent compared to Q2 last year. CEO Stephen Elop quite naturally tried to spin this thing in the right direction: The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011. However, even within the quarter, I believe our actions to mitigate the impact of these challenges have started to have a positive impact on the underlying health of our business. Most importantly, we are making better-than expected progress toward our strategic goals. But, he can't deny the obvious, calling the results "clearly disappointing." Looking forward, Elop expects "competitive pressures to continue," but indicates the company has a "clear strategy" to improve things. He says those who have seen the company's early Windows Phone devices (really, who hasn't) are "very optimistic" about their potential and that they hope to launch this year with a "sequence of concentrated product launches. Very expensive launches, we hear. Update: Elop just wrapped up his portion of the company's earning call. A summary and a few choice quotes are available below.
Sony Ericsson posts surprising Q2 loss, blames Japanese earthquake
Many analysts and market watchers were expecting a strong Q2 earnings report from Sony Ericsson today, but the company took them by surprise, posting a net loss of some €50 million (about $70.5 million), compared with a net gain of €12 million (around $17 million) at the same time last year. The manufacturer also sold only 7.6 million phones during the quarter, marking a 31 percent year-on-year decrease, while overall revenue fell from €1.76 billion (about $2.5 billion) last year to €1.19 billion (almost $1.7 billion) during Q2 2011. CEO Bert Nordberg attributed much of the decline to the Japanese earthquake, which disrupted the venture's supply chain, resulting in the loss of around 1.5 million devices. The report comes after Sony Ericsson launched a widespread cost-cutting campaign and re-focused its efforts on smartphone production, which comprised more than 70 percent of all sales during Q2, compared with just 40 percent at the end of last year. For a more thorough breakdown, head past the break for the full press release.
