Saturday, May 03, 2008

Top 5 Mobile Phone Companies: How they are Doing?

Did you know that of the top 5 mobile phone companies in the world now, 2.5 companies are from Asia? If you did not know this information then no problem. Read the whole entry and you will came to know about it. Since, this is a blog about Asian Business therefore, I am excited with this news. Interesting thing is that Korean companies are now coming forward and dominating in the mobile phone sector. Well, the other half is non Asian and I am talking about all the 5 top names in Mobile Phone world today.

1. Nokia: Nokia has around 40% market share in the world now. Nokia Corporation (NYSE:NOK) is a Finnish company and it has continued to impress everyone year after year. Nokia is very strong in Asia and you can be quite sure that mobile phone industry will witness massive growth in China, India, Pakistan, Bangladesh, Indonesia (together they have over 1.5 billion population) for years to come as mobile phone penetration is not even 50% in these countries. Unless, something terribly goes wrong for the company, Nokia will surely dominate in the mobile phone market for quite some time. It seems that Nokia has by default the first position and other companies have to try for the second position.

2. Samsung: What makes me very interested about Samsung is that it is a very diversified company. I mean that Samsung Group is engaged in different kinds of business sectors. You know that Nokia is totally focused on telecommunication sector but Samsung produces many items. In fact, Samsung Electronics Co., Ltd. (SEO:005930) is a part of Samsung Group and even Samsung Electronics Co., Ltd. Produces a wide range of products- not just mobile phone sets. Thus it shows that Samsung has a strong and good management team who are good at their business. One thing that Samsung has tried to do in the last few years is that to offer a wide range of mobile phone sets. Samsung also is strong in R&D.

3. Motorola: I guess that many of you did not expect Motorola to be here in the third position. Motorola is having a tough time. First of all, the company is finding it very difficult to make profit. In Q4 2007, Motorola, Inc. (NYSE:MOT) suffered over $1 billion loss in the mobile phone handset business. To add insult to injury, Motorola lost around 9% of market share (from 18.4% in 2007 to 9.7% now) in the world. In the last one year, Motorola slipped a lot and fell behind Samsung and became third largest mobile phone maker. Motorola is traditionally strong in the US market. It is still doing well in the US market. However, I think that this is the main problem for the company. The US market is already over saturated and last year, iPhone got all the media attention not any model of Motorola. Another problem is that both Samsung and LG have put up a strong fight against Motorola in the US market.

4. LG: In 2008, LG seems to be the emerging giant in mobile phone world. Only 2-3 years ago, many people in the mobile phone industry did not consider LG as a top class player. Well, this has changed a lot in 2008. LG is now the 4th largest name in mobile phone industry. LG has overtaken Sony Ericsson. The main strength of LG is perhaps in its ability to produce a lot of models at a short time. LG has also taken the Asian market seriously. LG has invested a lot in Indian market in the last two years. At the same, LG is doing well in the US market too. The same goes for Samsung. These two Korean companies are performing both in the rich American market and not so rich Asian market. LG is also investing heavily in R&D and while Motorola failed to make any profit, LG saw its profit soaring in mobile handset business.

5. Sony Ericsson:Neither Sony nor Ericsson now makes any mobile phone set. Rather, the joint venture company, Sony Ericsson produces handsets. Sony Ericsson is famous to many Tennis fans because it is the sponsor of Women's Tennis Association (WTA) and you know that WTA is the place for some of the most beautiful and popular female players on earth (like Sharapova and Ivanovic). So, Sony Ericsson should not have any problem about branding and visibility. That is why, I am surprised to see that LG could surpass Sony Ericsson. Well, it seems that Sony Ericsson will face a tough time in future and it may follow the example of Motorola. By the way, I said 2.5 of the top 5 mobile phone companies are Asian because Sony Ericsson is half Asian (Japanese Sony) and half European.

Four months of 2008 have passed. I am not sure if there would be any major change in the ranking of these 5 companies in the rest of the year. There is a slim possibility that LG can overtake Motorola and become number 3 mobile phone handset makers in the world.

Will it happen? What do you think?

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