I’m sick and tired of seeing Nokia fanbois flapping their arms in the air, quoting press release statistics about 39% market share, and connecting the next billion people. The only number that a corporation, and stock holders, honestly care about is profit. Whatever market share Sony Ericsson and Motorola have is irrelevant, because they do not make any money. Market share, for the completely clueless, is defined as the number of units your company ships, as a percentage of the number of units the entire industry ships. For every 100 mobile phones sold today, 39 of them are made by Nokia, and people used to care about that number. I stopped caring a long time ago. I stopped caring when I started using smartphones. Even Nokia said, during their Q2 2009 financial call, that they’re going to switch from reporting device ASP (average selling price) to product ASP in Q3 and that this will be the new format going forward. What does that mean? If Nokia sold 100 phones, each for 100 EUR, and each of those 100 people paid 10 EUR for 3 months of turn by turn navigation, the product ASP of those units would be 110 EUR versus the device ASP, which only accounts for the hardware, at 100 EUR.
Today Brian Modoff, an analyst at Deutsche Bank, released a chart that puts market share right along side value share. It boggles the mind why this took so long to happen, but it did. What we see is that Nokia, with their 39% market share, has 60% of the profits for the mobile industry. Impressive, but not as impressive as Apple whose market share looks like an eyelash that has fallen onto the X axis of a printout of a bar graph, yet is responsible for 20% of the profits for the industry. Whether that number is accurate or not can be debated. Apple does not report their financial results broken down by which products made which percentage of their profit. They also use a fiscal system, versus calendar year, which fucks up estimates due to fluctuations caused by seasonality.
I don’t care if Brian’s numbers are right, but I’m absolutely *ecstatic* that one financial analyst is not only looking at value share versus market share, but got the OK from his boss to publish his findings. Pretty soon another analyst will do this, and another, and another, and another, and maybe one day people will stop waving their dicks around about how many boxes they shipped and start looking at which companies are the best at printing money.
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