CDMA Market Share Shuffle

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By InCards
December 16, 2003

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At the end of CY 2002 Motorola, who entered the 1xRTT race later than the Koreans and Japanese was struggling to catch up with CDMA market leaders Samsung and LG. Nokia was well back in the pack and ranked 5th (or maybe even 6th, or 7th, for Q4 2002).

In Q1 2003 Strategy Analytics (SA) reported 22.2 million CDMA Handsets [Sell-In] and ranked the CDMA handset manufacturers this way

22.2 million CDMA Handsets [Sell-In] Q1 2003
Samsung     29.0%  6.438m units
LG          20.0%  4.440m units
Motorola    19.0%  4.218m units
Kyocera     11.0%  2.442m units
Nokia        7.6%  1.687m units   
Other       13.4%  2.975m units
� "Other" is probably estimated low by SA since Qualcomm estimates
   higher. Other numbers match  pretty well with numbers reported by
   the manufacturers.

The ranking above is the way these companies started the year, but in Q2 the major surprise to some was that Nokia's market share (at least according to SA) increased to 11%. Unfortunately I have been unable to find few other specific data points for CDMA sales for Q2 other than Qualcomm's revised figure of 23 million sell-in which appears to be about 2 million lower than SA's whose Q1 figure was conversely considerably lower than Qualcomm's.

That said, Slide 23 of Paul Jacobs recent London presentation (while graphical) pretty much bears out what Strategy Analytics reported and it shows market share of the major CDMA handset suppliers in Q2 2003 with CDMA market share leaders breaking out this way and with market share leader Samsung having (I believe) about 22% for Q2:

1. Samsung
2. LG
3. Motorola
4. Kyocera
5. Nokia
6. Audiovox
7. Sanyo
-  Other (total greater than either Sanyo or Audiovox
           share but not Nokia's).

Several sources have recently abstracted data from Strategy Analytics recent Q3 Handset Report. They appear to confirm what I suspected would be the case:

        Q3 2003                          CYTD 2003    
Rank Company    Units Share      Rank Company    Units
===========================      ===========================
1.   LG         6.0m   23.0%     1.   Samsung    14.8m
2.   Samsung    5.1m   19.6%     1.   LG         14.0m
3.   Motorola   5.1m   19.6%     3.   Motorola   12.6m
4.   Nokia      3.3m   12.7%     4.   Nokia       7.8m

My Observations and an opinion or two:

* LG is closing quickly on Samsung for CDMA market lead.

* Nokia has bumped Kyocera from the number 4 slot on both a quarterly and apparently a YTD basis, and as Tony Thornley recently commented in Q&A at Credit Suisse, continues to take CDMA market share.

* Samsung is increasingly focusing attention on the GSM family of products. Their quarterly CDMA market share has declined from ~29% in Q1 to 19.6% in Q3 (at least according to Strategy Analytics - see caveat below).

* Big gainers are LG whose quarterly market share of in Q1 has increased to 23% in Q3 from 20% in Q1, and Nokia who has increased marketshare from 7.6% in Q1 to 12.7% in Q3, despite the fact that by their own admission, it took them 6 to 12 months longer than they anticipated to introduce a 1xRTT product range.

* Motorola's decision to use Qualcomm 1xRTT chipsets rather than their own has not given them a decisive advantage over Nokia who chose a tougher route front end, but one that is likely to pay major dividends longer term s they rapidly broaden their product range.

Caveat: I have a limited set of CY2003 data. Sources are Qualcomm, SA (with some missing data for Q2 and Q3 total sell-in), and various analysts. I'm trying to reconcile that now, and will report further when I conclude. One data point I'm trying to reconcile is Samsung's reported CDMA YTD sell-in of 16 million units v. Strategy Analytics reported total of 14.8 million units. I suspect that Samsung's total of 16 million might include 1.2 million units manufactured for them by others and branded accordingly.

Best to all,

- IC -

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