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Monday, October 17, 2005

Who cares about mobile phone volume shipments?

Why is it that the mobile phone industry (and its financial watchers) still clings to "volume market share" as such an important indicator? Given that phone prices span the range from $30 to $1000, surely it's an increasingly irrelevant statistic.

It's notable that watch manufacturers tend to quote revenue numbers rather than units. And if people do comment on volumes, they focus on a specific segment like "fashion watches" - they don't lump Fossil, Swatch and Seiko shipments in with cheap $5 watches from China or $20k Rolexes.

Personally, I expect cellphone market volumes to continue to rise, but predominantly at the low end. I'll make a bet that exhibitors at trade shows in 2009 will be giving away cute freebie branded phones with $2 prepaid credits, instead of mouse mats, coffee mugs or USB memory sticks. They'll start coming free in packets of cereal by 2015.

So forget volume, unless it's in a particular market segment like "featurephones". Tell us about the aggregate value or the profit margin instead.

And don't get me started on the mystical status of mobile operator ARPU as a useful number either.

1 comment:

Anonymous said...

Shipments are pretty important as volume and economies of scale are very important in affecting profiatbility...EG Nokia's margins tend to fluctuate with volume more than t hey do with ASPs...Market size and market share also helps to understand how agressive the competition has been....This explains why the companies and finacial people focus on this as a key area...