Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Wall Street Beat: Earnings highlight smartphones as key to growth

Marc Ferranti | April 29, 2013
With Apple reporting a decline in profit margins and Samsung consolidating its leadership in the mobile device market, earnings results and market research reports this week point to the ever-increasing importance of smartphones as key to growth in tech.

Samsung remains the undisputed champion in the global smartphone battle. By the end of the first quarter, IDC said, Samsung shipped 70.7 million units, more than the next four vendors combined (which are, in order of market share: Apple, LG Electronics, Huawei and ZTE).

While Samsung's global smartphone market share increased year over year from 28.8 percent to 32.7 percent, Apple's share declined from 23 percent to 17.3 percent, IDC said.

Though Apple's iPad sales increased 65 percent year over year to 19.5 million units, it wasn't enough to boost profit, which declined for the first time in 10 years.

As Apple's iPhone shipments slowed, its profit dropped year over year. Reporting results for the quarter ending March 30, Apple Tuesday said profit declined year over year to $9.5 billion from $11.6 billion. Total revenue was $43.6 billion, increasing from $39.19 billion in the year-ago quarter.

The decline in profit and margins raised concerns, however, causing Apple shares to decline $0.67 to $405.46 on Wednesday, though they rose toward the end of the week.

The mobile market as a whole is fueling growth for equipment makers. For example Alcatel-Lucent, reporting results Friday, said its wireless division accounted for the majority of sales, totaling €966 million (US$.13 billion), a 4.9 percent increase year on year. The LTE business experienced record revenue, as network deployments in the U.S. continued.

Though first quarter revenue was up 0.6 percent year on year to €3.2 billion, restructuring charges helped push the company to a loss of €353 million.

The week ended on a down note for tech, which has trailed other sectors in the markets all year. The Nasdaq Computer Index declined .02 percent to 1574.46 points Friday. Amazon shares, which declined by $19.89 to close at $254.81, weighed down the Nasdaq.

Amazon on Thursday said net income for the quarter ending March 31 totaled $82 million, down $130 million year over year, though revenue rose to $16.1 billion from $13.2 billion. The profit drop was due to increased spending and a tough sales environment in Europe.

Tech earnings season continues next week, with Facebook results providing a highlight.

 

Previous Page  1  2 

Sign up for CIO Asia eNewsletters.