The Trillion-Dollar Smartphone War Has Just Begun: Nokia Corporation (ADR) (NOK), Apple Inc. (AAPL), Google Inc (GOOG)

Page 1 of 2

There are almost as many mobile phone subscriptions on the planet as there are people. At the end of 2012, the world had 6.7 billion mobile subscriptions, effectively covering 94% of the world’s population. Aside from agriculture, no other industry in the history of the world has ever been this far-reaching. Accounting for duplicate SIM cards, there’s a whopping 4.3 billion mobile phone users in the world, who own 5.3 billion mobile phones. When I say that smartphones are all the rage, I mean to say that 1.3 billion smartphones only accounts for 25% of all mobile phones. In other words, the growth opportunity for smartphones remains extremely ripe, being that there’s potentially trillions of dollars of growth to be had, as smartphones continue toward the path of world dominance.

Nokia Corporation (ADR) (NYSE:NOK)Death to dumber phones!
As smartphone technology continues to advance, previous smartphone technologies are likely to become more cost effective, and should ultimately make its way into the lower end market. Currently, a price threshold of $250 for an unsubsidized smartphone has driven Google Inc (NASDAQ:GOOG) Android to become the current smartphone leader in terms of market share. At the end of 2012, IDC believed that Android maintained a dominating 68.3% market share. As Google’s OEM partners are able to offer more phone for less money, it will put continued pressure on the feature phone market, and drive more eyeballs to Google’s ecosystem.

Nokia Corporation (ADR) (NYSE:NOK) may become Android’s next victim, since it shipped 79.6 million “dumb” devices last quarter, which declined 15% year over year, and accounted for nearly 65% of Nokia’s net device sales. Smartphone shipments saw a 66% decline in volumes, and only made up 32% of the segment’s revenue. The result of the smartphone decline is skewed, and can be largely attributed to the recent launch of Microsoft Corporation (NASDAQ:MSFT) Windows Phone 8.

Like Google Inc (NASDAQ:GOOG), Microsoft uses the power of its OEM network to drive support and distribution of its freshly-minted Windows Phone 8 ecosystem. Emerging markets remain a key focus for Microsoft, which has reportedly partnered with QUALCOMM, Inc. (NASDAQ:QCOM) to develop a Windows Phone 8 reference design for emerging-market OEMs. Devices based on the design are expected to ship in the latter half of the year.

Premium profits
Compared to emerging-markets, the premium smartphone market where Apple Inc. (NASDAQ:AAPL) operates is undoubtedly more saturated. It isn’t expected that Apple will necessarily increase its market share between now and 2016, but the smartphone industry is expected to grow by an average of 18.3% each year. Based on this growth rate, if Apple Inc. (NASDAQ:AAPL) just maintains its current smartphone share, it will have increased its volume by 65% in three years time. The power of compounding can have profound effects on Apple’s earnings potential.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!