Wednesday, July 29, 2009

Mobile handset manufacturers: Operating margins.

So I came across this chart from Gigaom which shows operating margins for the handset manufacturers. I think we may be closer to a shakeout than we may realize. (Think 12 months. )

It’s quite amazing how Nokia’s margins have been punished. Remember the time when Nokia smartphones would sell for $700+, and people would lap it up? Those days are gone for good. Which is why I think Nokia will find it really hard to go back to the 50% margin days. 30% margins aren't that bad you know? RIMM is only now getting there. Nokia has one of the best brand values in the world, especially in Asia. It just might be a value buy right now.

Sony Ericsson and Motorola are both hurting bad. At least one of them will not make it through this downturn. Those margins are telling you that betting against RIMM might not be the smart thing to do.

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