CEOs Discuss the Mobile Phone Market: Nokia, Qualcomm, Synaptics, Infineon, Agere

by: SA Editors

Interesting quotes from CEOs and CFOs on recent earnings conference calls, discussing their companies and markets:

Nokia CEO Olli-Pekka Kallasvuo

Net sales grew 13% in Q4 and 20% in 2006. Operating profit excluding special items grew 12% in Q4 and 18% in '06. Diluted EPS excluding special items grew 20% in Q4 and 29% in '06. Device volumes grew 26% in Q4 and 31% in 2006, and our world leading device market share of 36% grew two points in Q4 and three points in 2006.

In fact, we have been able to increase our market share and we have maintained a very healthy gap from Motorola. And based on our strengths of world-class brand products, cost structure, and logistics, we were able to increase our device market share significantly in 2006 without sacrificing operating margins or cash flow.

...Let's take a closer look at the overall device market and our device business. We estimate the fourth quarter mobile device market was 290 million units, growing 19% both year-on-year and sequentially. The slide shows our estimates of the regional and technology market statistics for the fourth quarter.

One thing I would like to highlight is that emerging markets were again the driver of growth, with markets like China, Southeast Asia-Pacific, India and Middle East and Africa each seeing year-on-year growth of over 35% in the fourth quarter. The device market in the fourth quarter was slightly stronger than we expected and it looks solid as we start the year. Our estimated device market share was 36% in the fourth quarter, flat sequentially and up 2 points year-on-year.

See the full Nokia conference call transcript.

Synaptics CEO Francis Lee

We also continue to make steady progress in the mobile phone market. Earlier this week, we announced that Pantech & Curitel have added three more mobile phones incorporating Synaptics MobileTouch capacitive sensing technology, which are currently available in Korea. The PTS-280 and PVK-2800 models use our four-button solution on the exterior of the phones for quick accessibility and control popular multimedia on-demand functions.

LED illuminates the touch sensitive buttons on the top side of the phone. The third model, the IMU-160 phone features a similar solution that allows you to navigate quickly and easily through media-on-demand digital content and features such as broadcast television.

We are also very excited about our ClearPad touch screen technology is being used in the new LG KE850 PRADA mobile phone. This solution replaces most of the traditional mechanical button with a large display, with on-screen controls better respond to a light touch or movement of the user's finger.

In addition, the joint partnership of LG and PRADA demonstrates a new level of mobile phone design and a growing trend among cell phone OEMs to use industrial design as the way to differentiate themselves within the marketplace. This phone is expected to be available in Europe next month and parts of Asia in March.

Meanwhile, our Onyx concept phone, which leverages the same ClearPad technology, generates strong media buzz at the recent consumer electronics show and some additional interest from potential new customers.

See the full Synaptics conference call transcript.

Qualcomm CEO Paul Jacobs

In the US, Sprint will be utilizing QChat, the key application driving their iDEN to CDMA migration. Sprint recently commented on the competitive advantage that QChat Push-To-Talk over CDMA provides, and that QChat testing and the deployment of EV-DO Rev. A are on or ahead of schedule.

In QSI, we are working diligently to support the upcoming commercialization of MediaFLO with our launch partner, Verizon, who announced their intention to launch in the first calendar quarter of 2007. We are excited about this upcoming launch because Mobile TV will be the next compelling application, causing upgrade cycle in phones.

At the recent 2007 Consumer Electronic Show, we announced key licensing arrangements with CBS, FOX, NBC, MTV, Comedy Central and Nickelodeon to provide some of the world's best known content. These partnerships will help unlock the true potential of mobile media by delivering consumers their choice of TV programming directly to their mobile devices when and where they want it.

See the full Qualcomm conference call transcript.

Infineon CEO Dr. Wolfgang Ziebart

In our communications solutions segment, revenues and EBIT dropped significantly. Also, revenues with BenQ fell to basically zero. Our base band shipments to other customers increased versus the last quarter. The remainder of the revenue decline is explained mainly by the usual early impact of seasonality in our wireless business.

Our wireline business, by contrast, was more or less stable with strong growth in the DSL activities, where we experienced strong demand for CPE – customer premise equipment – and voice over IP applications. We are very pleased with the business wins in our wireless business and in particular in our mobile phone platform activities.

In the latter, we continue to make excellent progress. I’m pleased to report another large new OEM customer win in the December quarter. Shipments are set to begin in the calendar year 2007. This design win is a clear validation of our technical capabilities and our value proposition for the mobile phone market. It also illustrates that taking the tough decision to remain in the base band business after the BenQ insolvency was the right one. We also believe it clearly shows that our strategy to focus on high value added product offerings for volume customers is not only right, but beginning to pay off.

See the full Infineon conference call transcript.

Agere CEO Rick Clemmer

...our strategy of focusing on the sweet spot of the cell phone market is allowing us to gain share and grow revenue. The fact that we posted revenue growth in December quarter, which has historically been our lower sales quarter for our mobility business, signifies our strength in this market. During the quarter, we announced our TrueNTRY X122 platform, which is lower cost version of Agere’s X125 platform. Like the X125 for EDGE application, the X122 for GPRS makes possible CD-quality music on entry level cell phones.

During the quarter, Samsung rolled out is Ultra Music F-300 mobile phone that uses our baseband solution. The cell phone integrates a complete music player with superb sound quality and offers a dedicated music touch screen interface, that makes it easy to navigate through you music content. The broad -- the product also has all the extra features consumers have come to expect including a 2 megapixel camera and long lasting battery life. Meanwhile, we continue to benefit from Samsung success in their Ultra Edition phone series. The XA20 and DA-30 models are being promoted by Samsung as the world’s thinnest mobile phones in the respective bar and flip phone form factors. These phones use Agere’s innovative package-on-package design, which enables the phones to so thin.

See the full Agere conference call transcript.