Samsung passes Motorola, nabs No. 2 market-share ranking

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Samsung passes Motorola, nabs No. 2 market-share ranking


By Phil Carson
Story posted: July 13, 2007 - 1:29 pm EDT

As the two, next-largest handset vendors fling themselves at the dual prospects of entry-level phones in emerging markets and upgrade cycles in mature markets, all in an effort to compete with Nokia Corp.’s breakaway, a few rivets are coming loose.

Motorola Inc.’s historic stumble has enabled Samsung Electronics Co. Ltd. to seize, by a hair, the global, second-place ranking in market share.

Samsung churned out 37.4 million handsets in the second quarter, compared with Motorola’s self-projected volume of 35 million to 36 million. Samsung’s unit volume is up nearly 50% over the year-ago quarter. Analysts said that the vendor’s efforts in emerging markets are finding a degree of success and, like Sony Ericsson Mobile Communications, it has capitalized on Motorola’s weakness in the European market to gain share.

Samsung’s financial results on its massive second-quarter volume play are another matter. The overall company earned revenue of $16 billion for the second quarter, a 4% nudge up from the year-ago quarter. Net income in the quarter was $1.5 billion, down 5% from the year-ago quarter.

Samsung’s average selling price, as in Sony Ericsson’s case, has eroded with a push for market share. Samsung’s ASP in the quarter was $148, a 5% drop from the previous quarter.

The company attributed its performance to its Ultra Edition line of handsets in mature markets and its increased volume of entry-tier handsets in emerging markets.