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Global - Mobile Phones 0199 - 0152 - 2014

MarketLine Industry Profile

Global Mobile Phones June 2015

Reference Code: 0199-0152

Publication Date: June 2015

WWW.MARKETLINE.COM

MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED

http://www.marketlineinfo.com/

Global - Mobile Phones 0199 - 0152 - 2014

EXECUTIVE SUMMARY

Market value The global mobile phones market grew by 2.4% in 2014 to reach a value of $385.9 billion.

Market value forecast In 2019, the global mobile phones market is forecast to have a value of $440.9 billion, an increase of 14.2% since 2014.

Market volume The global mobile phones market shrank by 3.8% in 2014 to reach a volume of 1,655.9 million handsets.

Market volume forecast In 2019, the global mobile phones market is forecast to have a volume of 2,339.9 million handsets, an increase of 41.3%

since 2014.

Category segmentation Smartphone is the largest segment of the global mobile phones market, accounting for 67.9% of the market's total

volume.

Geography segmentation Asia-Pacific accounts for 47.3% of the global mobile phones market value.

Market rivalry This market is dominated by a small number of large, well-known companies such as Apple, Lenovo and Samsung. This

intensifies rivalry as they can harness greater resources for research and competition.

Global - Mobile Phones 0199 - 0152 - 2014

TABLE OF CONTENTS

Executive Summary ....................................................................................................................................................... 2

Market value ............................................................................................................................................................... 2

Market value forecast ................................................................................................................................................. 2

Market volume ............................................................................................................................................................ 2

Market volume forecast .............................................................................................................................................. 2

Category segmentation .............................................................................................................................................. 2

Geography segmentation ........................................................................................................................................... 2

Market rivalry .............................................................................................................................................................. 2

Market Overview ............................................................................................................................................................ 7

Market definition ......................................................................................................................................................... 7

Market analysis .......................................................................................................................................................... 7

Market Data ................................................................................................................................................................... 9

Market value ............................................................................................................................................................... 9

Market volume .......................................................................................................................................................... 10

Market Segmentation ................................................................................................................................................... 11

Category segmentation ............................................................................................................................................ 11

Geography segmentation ......................................................................................................................................... 12

Market Outlook ............................................................................................................................................................. 13

Market value forecast ............................................................................................................................................... 13

Market volume forecast ............................................................................................................................................ 14

Five Forces Analysis .................................................................................................................................................... 15

Summary .................................................................................................................................................................. 15

Buyer power ............................................................................................................................................................. 16

Supplier power ......................................................................................................................................................... 17

New entrants ............................................................................................................................................................ 18

Threat of substitutes ................................................................................................................................................. 20

Degree of rivalry ....................................................................................................................................................... 21

Leading Companies ..................................................................................................................................................... 23

Global - Mobile Phones 0199 - 0152 - 2014

Apple Inc. ................................................................................................................................................................. 23

Lenovo Group Limited .............................................................................................................................................. 28

Samsung Electronics Co., Ltd. ................................................................................................................................. 31

Xiaomi Inc. ............................................................................................................................................................... 34

Methodology................................................................................................................................................................. 35

Industry associations ................................................................................................................................................ 36

Related MarketLine research ................................................................................................................................... 36

Appendix ...................................................................................................................................................................... 37

About MarketLine ..................................................................................................................................................... 37

Global - Mobile Phones 0199 - 0152 - 2014

LIST OF TABLES

Table 1: Global mobile phones market value: $ billion, 2010–14 ................................................................................... 9

Table 2: Global mobile phones market volume: million handsets, 2010–14 ................................................................. 10

Table 3: Global mobile phones market category segmentation: million handsets, 2014 .............................................. 11

Table 4: Global mobile phones market geography segmentation: $ billion, 2014 ........................................................ 12

Table 5: Global mobile phones market value forecast: $ billion, 2014–19 ................................................................... 13

Table 6: Global mobile phones market volume forecast: million handsets, 2014–19 ................................................... 14

Table 7: Apple Inc.: key facts ....................................................................................................................................... 23

Table 8: Apple Inc.: key financials ($) .......................................................................................................................... 26

Table 9: Apple Inc.: key financial ratios ........................................................................................................................ 26

Table 10: Lenovo Group Limited: key facts .................................................................................................................. 28

Table 11: Lenovo Group Limited: key financials ($) ..................................................................................................... 29

Table 12: Lenovo Group Limited: key financial ratios ................................................................................................... 29

Table 13: Samsung Electronics Co., Ltd.: key facts ..................................................................................................... 31

Table 14: Samsung Electronics Co., Ltd.: key financials ($) ........................................................................................ 32

Table 15: Samsung Electronics Co., Ltd.: key financials (KRW) .................................................................................. 32

Table 16: Samsung Electronics Co., Ltd.: key financial ratios ...................................................................................... 32

Table 17: Xiaomi Inc.: key facts ................................................................................................................................... 34

Global - Mobile Phones 0199 - 0152 - 2014

LIST OF FIGURES

Figure 1: Global mobile phones market value: $ billion, 2010–14 .................................................................................. 9

Figure 2: Global mobile phones market volume: million handsets, 2010–14 ............................................................... 10

Figure 3: Global mobile phones market category segmentation: % share, by volume, 2014 ....................................... 11

Figure 4: Global mobile phones market geography segmentation: % share, by value, 2014 ....................................... 12

Figure 5: Global mobile phones market value forecast: $ billion, 2014–19 .................................................................. 13

Figure 6: Global mobile phones market volume forecast: million handsets, 2014–19 .................................................. 14

Figure 7: Forces driving competition in the global mobile phones market, 2014 .......................................................... 15

Figure 8: Drivers of buyer power in the global mobile phones market, 2014 ................................................................ 16

Figure 9: Drivers of supplier power in the global mobile phones market, 2014 ............................................................ 17

Figure 10: Factors influencing the likelihood of new entrants in the global mobile phones market, 2014 .................... 18

Figure 11: Factors influencing the threat of substitutes in the global mobile phones market, 2014 ............................. 20

Figure 12: Drivers of degree of rivalry in the global mobile phones market, 2014 ........................................................ 21

Figure 13: Apple Inc.: revenues & profitability .............................................................................................................. 26

Figure 14: Apple Inc.: assets & liabilities ...................................................................................................................... 27

Figure 15: Lenovo Group Limited: revenues & profitability ........................................................................................... 30

Figure 16: Lenovo Group Limited: assets & liabilities ................................................................................................... 30

Figure 17: Samsung Electronics Co., Ltd.: revenues & profitability .............................................................................. 33

Figure 18: Samsung Electronics Co., Ltd.: assets & liabilities ...................................................................................... 33

Global - Mobile Phones 0199 - 0152 - 2014

MARKET OVERVIEW

Market definition The mobile phone market consists of all cell phones used for mobile telephony. The market is split into two segments:

feature phones and smartphones. Smartphones are defined as advanced cell phones that serve as computing devices in

addition to being mobile handsets and that run on an advanced mobile operating system. Key examples of smartphones

include the Apple iPhone range (which run on the iOS operating system), Samsung Galaxy S6 (which runs on the

Android operating system) and Blackberry and Windows Phone handsets. Feature phones are defined as cell phones

that are not considered to be smartphones. Feature phones may still offer some features that smartphones do, such as

the ability to browse the Internet, listen to music or take pictures, but have significantly less computational power than

smartphones. Key examples of feature phones include the Nokia 215 and the LG Rumor Touch. The market does not

include other types of handset, such as cordless phones in which a short-range radio link is used to communicate

between the handset and a fixed-line base station, or those used for specialized applications such as two-way radio, etc.

Market volumes for a given year are defined as the number of shipments to end-users, including both new uptake and

renewal purchases and market values have been calculated using average selling prices before the impact of carrier

subsidies. The units in the report represent number of phones delivered to users each year, not the total number of

phones in existence. All currency conversions are carried out at constant average annual 2014 exchange rates.

For the purposes of this report, North America consists of Canada, Mexico, and the United States.

South America comprises Argentina, Brazil, Chile, Colombia, and Venezuela.

Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy,

Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

Scandinavia comprises Denmark, Finland, Norway, and Sweden.

Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand,

Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.

Market analysis The global mobile phones market value has experienced dynamic growth over the past few years, with volumes also

growing at a very strong overall rate. Market value growth did, however, severely decelerate in 2014 as market volumes

contracted. The market volume is expected to grow at a strong overall rate over the forecast period while value growth

will be more moderate, with decline expected at the end of the forecast period in 2019.

The rising popularity of smartphones, in both mature and emerging markets, over the past few years has contributed to

the significant level of market value growth as many consumers have upgraded their old feature phones with more

advanced, and expensive, devices. This has meant that the overall average selling price of mobile phones has been on

the rise as smartphones account for an increasing proportion of the market volume. Volume growth is expected to be

buoyed by emerging markets in the Asia-Pacific region, such as Indonesia and India – both of which are also expected to

continue to be value drivers due to the relatively lower proportion of mobile phone sales currently accounted for by

smartphones in the two countries. However, many mature markets with high mobile phone, and smartphone, penetration

levels do not hold the same growth potential and lower demand for smartphones as saturation occurs, coupled with

falling average smartphone selling prices, is expected to lead to market value decline.

The global mobile phones market had total revenues of $385.9bn in 2014, representing a compound annual growth rate

(CAGR) of 22.8% between 2010 and 2014. In comparison, the European and Asia-Pacific markets grew with CAGRs of

14.5% and 28.3% respectively, over the same period, to reach respective values of $73.3bn and $182.6bn in 2014.

Global - Mobile Phones 0199 - 0152 - 2014

The market volume increased with a CAGR of 10.2% between 2010 and 2014, to reach a total of 1,655.9 million

handsets in 2014. The market's volume is expected to rise to 2,339.9 million handsets by the end of 2019, representing a

CAGR of 7.2% for the 2014-2019 period.

Smartphone sales had the highest volume in the global mobile phones market in 2014, with total sales of 1,123.6 million

handsets, equivalent to 67.9% of the market's overall volume. In comparison, sales of feature phones had a volume of

532.3 million handsets in 2014, equating to 32.1% of the market total.

The proportion of market volume accounted for by smartphones varies significantly between countries. The Chinese

market, for instance, is dominated by smartphones, with the segment accounting for 86.1% of the market volume in

2014. By way of contrast, smartphones accounted for just 26.4% of the market volume in India during the same year.

While China’s extensive and still expanding population means that the market still has growth potential, it is markets

such as India – where higher-value smartphones still have significant room for growth within the existing market – that

have the greatest potential for value growth, as increases in the smartphone segment’s share of the total market volume

should outweigh the impact of declining average smartphone selling prices.

The performance of the market is forecast to decelerate, with an anticipated CAGR of 2.7% for the five-year period 2014

- 2019, which is expected to drive the market to a value of $440.9bn by the end of 2019. Comparatively, the European

market will decline with a CARC of -1.2%, and the Asia-Pacific market will increase with a CAGR of 5%, over the same

period, to reach respective values of $69.2bn and $233.4bn in 2019.

Global - Mobile Phones 0199 - 0152 - 2014

MARKET DATA

Market value The global mobile phones market grew by 2.4% in 2014 to reach a value of $385.9 billion.

The compound annual growth rate of the market in the period 2010–14 was 22.8%.

Table 1: Global mobile phones market value: $ billion, 2010–14

Year $ billion € billion % Growth

2010 169.5 127.5

2011 247.4 186.1 46.0%

2012 329.0 247.5 33.0%

2013 376.9 283.6 14.6%

2014 385.9 290.4 2.4%

CAGR: 2010–14 22.8%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 1: Global mobile phones market value: $ billion, 2010–14

SOURCE: MARKETLINE M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

Market volume The global mobile phones market shrank by 3.8% in 2014 to reach a volume of 1,655.9 million handsets.

The compound annual growth rate of the market in the period 2010–14 was 10.2%.

Table 2: Global mobile phones market volume: million handsets, 2010–14

Year million handsets % Growth

2010 1,122.5

2011 1,264.2 12.6%

2012 1,516.6 20.0%

2013 1,720.9 13.5%

2014 1,655.9 (3.8%)

CAGR: 2010–14 10.2%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 2: Global mobile phones market volume: million handsets, 2010–14

SOURCE: MARKETLINE M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

MARKET SEGMENTATION

Category segmentation Smartphone is the largest segment of the global mobile phones market, accounting for 67.9% of the market's total

volume.

The Feature phone segment accounts for the remaining 32.1% of the market.

Table 3: Global mobile phones market category segmentation: million handsets, 2014

Category 2014 %

Smartphone 1,123.6 67.9%

Feature phone 532.3 32.1%

Total 1,655.9 100%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 3: Global mobile phones market category segmentation: % share, by volume, 2014

SOURCE: MARKETLINE M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

Geography segmentation Asia-Pacific accounts for 47.3% of the global mobile phones market value.

Americas accounts for a further 29% of the global market.

Table 4: Global mobile phones market geography segmentation: $ billion, 2014

Geography 2014 %

Asia-Pacific 182.6 47.3

Americas 111.8 29.0

Europe 73.3 19.0

Middle East 10.8 2.8

Rest of the World 7.4 1.9

Total 385.9 100%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 4: Global mobile phones market geography segmentation: % share, by value, 2014

SOURCE: MARKETLINE M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

MARKET OUTLOOK

Market value forecast In 2019, the global mobile phones market is forecast to have a value of $440.9 billion, an increase of 14.2% since 2014.

The compound annual growth rate of the market in the period 2014–19 is predicted to be 2.7%.

Table 5: Global mobile phones market value forecast: $ billion, 2014–19

Year $ billion € billion % Growth

2014 385.9 290.4 2.4%

2015 408.8 307.6 5.9%

2016 426.1 320.6 4.2%

2017 440.0 331.1 3.3%

2018 449.6 338.3 2.2%

2019 440.9 331.7 (2.0%)

CAGR: 2014–19 2.7%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 5: Global mobile phones market value forecast: $ billion, 2014–19

SOURCE: MARKETLINE M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

Market volume forecast In 2019, the global mobile phones market is forecast to have a volume of 2,339.9 million handsets, an increase of 41.3%

since 2014.

The compound annual growth rate of the market in the period 2014–19 is predicted to be 7.2%.

Table 6: Global mobile phones market volume forecast: million handsets, 2014–19

Year million handsets % Growth

2014 1,655.9 (3.8%)

2015 1,780.2 7.5%

2016 1,917.0 7.7%

2017 2,055.5 7.2%

2018 2,197.0 6.9%

2019 2,339.9 6.5%

CAGR: 2014–19 7.2%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 6: Global mobile phones market volume forecast: million handsets, 2014–19

SOURCE: MARKETLINE M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

FIVE FORCES ANALYSIS

The mobile phones market will be analyzed taking mobile phone manufacturers as players. The key buyers will be taken

as network operators and retailers, and entities providing technology, equipment and parts for mobile telephone

manufacture as the key suppliers.

Summary

Figure 7: Forces driving competition in the global mobile phones market, 2014

SOURCE: MARKETLINE M A R K E T L I N E

This market is dominated by a small number of large, well-known companies such as Apple, Lenovo and Samsung. This

intensifies rivalry as they can harness greater resources for research and competition.

Buyers tend to be large, and are therefore able to negotiate favorable contracts, although they will find it necessary to

stock the latest handsets to meet end-user demand and this reduces their power. Suppliers provide technology,

equipment and parts for mobile phone manufacturing. Such technology is often highly specialized, leaving suppliers

reliant on this supply agreement, particularly as some parts can be unique to a certain manufacturer. The rise of the

smartphone allows for new entrants to exploit a burgeoning position in the market, although in some developed

economies such as Germany and the UK, this sector is becoming highly saturated. Despite strong overall historical

growth, newcomers may be put off by high capital outlay, the scale economies necessary to compete with incumbents

who have excellent brand reputations, and strict regulations regarding health and safety and the environment.

Global - Mobile Phones 0199 - 0152 - 2014

Buyer power

Figure 8: Drivers of buyer power in the global mobile phones market, 2014

SOURCE: MARKETLINE M A R K E T L I N E

This market is made up of two categories of buyers. Firstly, there are retail outlets such as the Carphone Warehouse in

Europe and big store retailers such as Wal-Mart in the US, which purchase handsets to sell on to end-users. The second

category of buyers is mobile network operators such as AT&T, Verizon, and T-Mobile, many of whom now conduct their

own retail operations. There are a small number of large mobile network operators, strengthening their position when

bidding for contracts with market players, although the size of the market players themselves may negate this

advantage. However, their position is precarious, as the rise of the smartphone and rapid technological progress mean

buyers are required to stock the latest innovative products in order to meet end-user demand. Buyers are also open to

exclusive deals with manufacturers.

Furthermore, some market players, most notably Apple with 447 retail stores in 16 countries as of time of publication, are

capable of forward integration by conducting their own retail operations, thus diluting buyer power. While Apple continues

to charge premium prices for its products, whether through a reseller or directly through its retail stores, other companies

have taken to direct-to-consumer distribution strategies in order to keep the cost of their devices down. A key example of

such a player is the Chinese manufacturer Xiaomi, which offers high-spec devices, comparable with high-end offerings

from the likes of Apple and Samsung, for much lower prices. Overall, buyer power is assessed as moderate.

Global - Mobile Phones 0199 - 0152 - 2014

Supplier power

Figure 9: Drivers of supplier power in the global mobile phones market, 2014

SOURCE: MARKETLINE M A R K E T L I N E

As manufacturers are typically much larger companies than suppliers, they are able to better influence supply contracts.

One example is Nokia, which carries out assessments on its suppliers to make sure they meet certain standards. This

has increasingly come into focus in recent years following damning revelations about working conditions at Foxconn, a

Taiwanese supplier of components to the likes of Apple, BlackBerry, Dell, Motorola, and Sony. Market players are

heavily reliant on the quality and efficiency of the software and products provided. Moreover, some of the hardware, such

as integrated circuits, can be specific to an individual supplier, which strengthens their position. Manufacturers have to

be careful over whom they choose to supply them as unethical suppliers could result in negative connotations with their

brand image. Examples include the usage of tantalum purchased from the Congo, which is believed to help fund conflict

in the region, or the alleged poor treatment of factory workers at companies like Foxconn.

Revenues to suppliers that are generated from supply to mobile phone manufacturers are not essential to them, as

suppliers provide services to a wide range of industries, particularly in the electronics field. This may also be said for

marketing and advertising companies that provide services to the mobile phone market. There has been instability in raw

material prices, with the uncertainty generated adversely affecting manufacturers' margins. The trend for smartphones

has strengthened supplier power, as more complex components require further rare earth materials for their production.

On a global scale, sales of smartphones have now overtaken feature phones. Operating systems such as Windows

Phone, BlackBerry OS, Android and iOS (used in Apple products) are essential components for smartphone

manufacturers, although in the case of Apple and BlackBerry these are developed by the manufacturers themselves. As

entry barriers fall in markets throughout the world it is likely that profitability is likely to flow away from handset

manufacturers to manufacturers of key performance enhancing components and modules (both hardware and software).

The supply chain of this market is made more complicated by the fact that some players also act as suppliers. For

instance, Samsung – which enjoys a greater degree of diversification than some of its rivals in the market –

manufactures a proportion of Apple's iPhone processors. Furthermore another rival, LG, is said to supply Apple with

screens for its iPhone 6. While Apple is seeking to reduce its reliance on Samsung in the wake of increased competition

and animosity between the two, this level of integration increases supplier power in Samsung's case. Samsung's

vertically integrated position also gives it a further competitive advantage as far as access to components is concerned.

Overall supplier power is assessed as moderate.

Global - Mobile Phones 0199 - 0152 - 2014

New entrants

Figure 10: Factors influencing the likelihood of new entrants in the global mobile phones market, 2014

SOURCE: MARKETLINE M A R K E T L I N E

The increasing popularity of smartphones means several newcomers have successfully entered the market in recent

years, with examples including Apple, HTC and, more recently, Xiaomi. Smartphones offer the basic functions of a

regular mobile phone along with, for example, touchscreen, cameras, GPS navigation, Wi-Fi and mobile broadband

access. There is also a market for cheap feature phones still available in developing economies, with features such as

dual-SIM preferred to more expensive smartphones with limited coverage, although even consumers in emerging

markets are now rapidly moving towards smartphones. Many of the established mobile phone manufacturers offer their

own smartphones, with this section of the market experiencing strong growth, this trend is likely to increase over the next

few years. This offers an attractive outlook that may lure potential entrants. It is expected that, just as with the PC

industry, as the world of mobile handsets moves towards a higher degree of specialization, the barriers to entry for new

entrants will fall.

However, entering the market as a completely new entity proves problematic due to the presence of large incumbents.

Capital outlay involving research and development in new technology and production facilities is costly and competing

with the likes of Apple and Samsung on this front is virtually impossible for a new entrant. Nevertheless, localized

players, such as Telpa in Turkey and Mundo Reader in Spain have been able to successfully challenge the dominance

of the key global manufacturers, becoming popular amongst consumers.

Global - Mobile Phones 0199 - 0152 - 2014

There are restrictions in this market, most of which relate to human health and safety and environmental issues. There

are stringent laws relating to science-based regulation and the adoption of emission guidance by the International

Commission on Non-Ionizing Radiation. Furthermore, the effect of the use of mobile phones on health is closely

monitored, with studies being conducted on the possible side effects to the electromagnetic radiation produced by mobile

phones. Intellectual property rights can also serve as a strong barrier to entry, as the prolonged dispute between

Samsung and Apple over patents demonstrates. In 2013, Samsung was ordered to pay Apple $1.05bn in relation to

mobile phone software patents as part of a case that began in 2011. Patenting forces competitors to innovate, but

success is not guaranteed and other platforms, such as Windows Phone or Blackberry, have floundered in the market.

The increasing adoption of Android as the operating system (it has a global smartphone market share of around 75%) of

choice for many manufacturers has played a key role in this and illustrates how important an agreement with a sought-

after OS system developer is. Strong growth in this market serves as an attractive prospect to new entrants, although

declining handset prices and slowing smartphone sales may mean that profitability in the future may prove elusive,

especially for new players looking to corner the budget end of the market. In fact Xiaomi, a Chinese new entrant that has

successfully conquered the Chinese smartphone market following its formation in 2010, only enjoys a profit margin of

around 1.3%. Critically, Xiaomi offers highly specified devices at significantly lower prices than its incumbent rivals which,

although a key driver of unit sales and revenues does little to boost profitability as far as hardware is concerned. A direct

distribution model is key to Xiaomi's strategy in keeping costs down. However, the company's main intention is to bolster

device penetration in order to build a substantial customer base that it can monetize on a recurring basis through the

sale of applications and software; Xiaomi essentially sees itself as a software company, not as a hardware manufacturer.

Attempts at customer base monetization have also been made by main players in the market - such as Apple's App

Store and Samsung's App Store - to varying degrees of success, although such players typically accrue revenues by

taking a cut of the proceeds from the sale of apps produced by third parties through their respective digital distribution

platforms, rather than their own software. Overall, the threat of new entrants is assessed as moderate.

Global - Mobile Phones 0199 - 0152 - 2014

Threat of substitutes

Figure 11: Factors influencing the threat of substitutes in the global mobile phones market, 2014

SOURCE: MARKETLINE M A R K E T L I N E

One possible substitute for mobile phones is fixed line telephones. However, this threat is seen as minimal, as mobile

phones offer the advantage of usage in a much wider geographical area - wherever they pick up a signal. Moreover,

many mobile phones now offer such benefits that they have become substitutes for many other electrical appliances,

including laptops, televisions, MP3 players and cameras. Whilst laptops also offer many of the features that mobile

phones are marketed on, such as internet access, video calling through programs such as Skype, email, TV, GPS, music

and portability, they are not a strong substitute, as they also do not possess many of the benefits of a mobile phone,

such as size, weight and the seamless ability to call others. Tablet computers could be seen as a substitute for

smartphones, but large-screened smartphones (known as "phablets") negate this threat to a large extent. Overall, the

threat of substitutes is assessed as weak.

Global - Mobile Phones 0199 - 0152 - 2014

Degree of rivalry

Figure 12: Drivers of degree of rivalry in the global mobile phones market, 2014

SOURCE: MARKETLINE M A R K E T L I N E

This market is dominated by a small number of large, well-known companies such as Apple, Lenovo and Samsung. This

intensifies rivalry as they can harness greater resources for research and competition. The introduction of smartphones

has added another competitive dimension, with Apple and those using the Android operating system (including HTC, LG,

Samsung and Sony) benefitting and establishing themselves as major players. Simultaneously, some of the most

established mobile phone manufacturers have experienced an adverse effect. For example, Nokia has been adversely

affected by the rise in popularity of smartphones, with its Lumia range failing to make a significant impression when

compared to the likes of Apple and Samsung's flagship handsets. Additionally, BlackBerry, a company that was

successful in the early smartphone market, has seen revenues, and profitability, plummet over the past few years as

consumers have moved to competitors' offerings. This followed a period of dynamic growth between 2005 and 2011,

during which the company's revenues from the sale of devices increased by over 1,600% to reach around $16bn.

Also present in this market, however, is a second tier of smaller manufacturers with phones that are targeted towards

niche markets or produced for specific regions. In fact, many companies focus on offering budget alternatives to the main

players' core offerings - such as Xiaomi - which puts significant pressure on the leading players to drop prices to remain

competitive. While Apple operates very much independently of many players in the market by virtue of its closed iOS

ecosystem - which itself serves as a means of differentiation and appeal, especially amongst its large and loyal customer

base - the open Android platform is much more fragmented and competitive. In the Android sector, budget devices sit

alongside high-end, flagship smartphones from the major manufacturers, varying in form factor, screen size, build quality

and processing power and, most importantly, price. However, as the market progresses, the differentiation that premium

devices hold over their budget competitors will diminish and consumers are already moving towards cheaper devices,

bringing down the average selling price of mobile phones. As such, market leaders are faced with a difficult decision to

make: do they bring the price of their flagship models down to compete more effectively with budget manufacturers; or

do they invest in expensive R&D to give their next model a new differentiating feature? Either would have a negative

impact on profitability, and there is no guarantee that any differentiating feature will be met with enthusiasm by

consumers. Of course, most of the major manufacturers in this market have a product range that spans the budget and

premium sectors, but even consumer shift from a manufacturers' high-end offering to its mid-range selection of handsets

would have a negative top and bottom-line impact. In essence, as the number of budget offerings in the market

increases, so too will the level of competition.

Global - Mobile Phones 0199 - 0152 - 2014

Market penetration is high, and when including phones that are not acquired with a contract, market saturation is even

higher. This puts more pressure on manufacturers to continually invest in new technologies in order to encourage

existing mobile subscribers to upgrade their existing handsets. This, in addition to high fixed costs, serves to increase the

level of rivalry in the market. Although mobile cellular subscriptions are highest in Western countries, developing

countries such as China and India have experienced astonishing growth in recent years.

Some leading companies like LG Electronics and Samsung Electronics have diversified operations and manufacture a

range of consumer electronics, such as TVs and home appliances. However, due to the dynamic growth in the value of

the smartphone segment over the past few years, leading companies have seen mobile phone sales become a dominant

part of their revenue stream. For example, Samsung reported a decline of 27% in net profit in FY15 over the previous

year, as mobile phone revenues declined by 21%, demonstrating the reliance that the company has on this market as

both a revenue and profit driver.

Divestment is another potential exit route and Google followed this route when it sold Motorola Mobility to Lenovo for

$2.9bn in January 2014. Furthermore, Nokia completed the divestment of its struggling Devices & Services business to

Microsoft in April 2014 for around EUR4.4bn (approximately $5.9bn). This reduces exit barriers to some extent, but such

deals require the interest of large companies with extensive capital reserves. Overall rivalry is assessed as strong.

Global - Mobile Phones 0199 - 0152 - 2014

LEADING COMPANIES

Apple Inc.

Table 7: Apple Inc.: key facts

Head office: 1 Infinite Loop, Cupertino, California 95014, USA

Telephone: 1 408 996 1010

Website: www.apple.com

Financial year-end: September

Ticker: AAPL

Stock exchange: NASDAQ

SOURCE: COMPANY WEBSITE M A R K E T L I N E

Apple Inc. (Apple or the company) is a technology company that offers personal communication devices and related

software and solutions. The company's products and services include iPhone; iPad; Mac; iPod; Apple TV; a portfolio of

consumer and professional software applications; the iOS and OS X operating systems; iCloud ; and a variety of

accessory, service and support offerings. The company also sells and delivers digital content and applications through

the iTunes Store, App Store, iBooks Store, and Mac App Store. Apple sells its products worldwide through its retail

stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers

and value-added resellers. In addition, the company sells a variety of third-party products that are compatible with

iPhone, iPad, Mac and iPod, including application software, and various accessories, through its online and retail stores.

Apple sells its products to consumers; small and mid-sized businesses (SMB); and education, enterprise and

government customers. The company has operations in Americas, Europe, and Asia-Pacific.

The company manages its business primarily on a geographic basis: the Americas, Europe, Japan, Greater China, rest

of Asia-Pacific and retail operations. Each operating segment provides similar hardware and software products and

similar services. The Americas segment includes both North and South America. The Europe segment includes

European countries, as well as India, the Middle East and Africa. The Greater China segment includes China, Hong

Kong and Taiwan. The rest of Asia-Pacific segment includes Australia and Asian countries, other than those countries

included in the company's other operating segments. The retail segment operates Apple retail stores in various

countries, including the US.

Apple offers products, operating system software, application software, and accessories.

The company's products include iPhone; iPad; Mac; iPod; iTunes and the iTunes Store; Mac App Store; iCloud; and

Apple Pay.

iPhone is the company's line of smartphones that combine a phone, music player, and internet device in one product,

and is based on Apple's iOS Multi-Touch operating system. iPhone has an integrated photo and video camera and photo

library app, and on qualifying devices, also includes Siri, a voice activated intelligent assistant. iPhone uses Apple's

iTunes Store, App Store and iBooks Store to purchase and organize music, movies, television (TV) shows, podcasts,

books, and apps. Apple's iPhone is compatible with both Mac and Windows personal computers (PCs) and Apple's

iCloud services which provide synchronization of mail, contacts, calendars, apps, music, photos, documents, and more

across users' devices. The company sold approximately 169.2 million iPhones during the financial year ended

September 2014 (FY2014).

Global - Mobile Phones 0199 - 0152 - 2014

iPad is the company's line of multi-purpose tablets based on Apple's iOS Multi-Touch operating system, which includes

iPad Air and iPad mini. iPad has an integrated photo and video camera and photo library app, and on qualifying devices,

also includes Siri. iPad works with the iTunes Store, the iBooks Store and the App Store for purchasing, organizing and

playing music, movies, TV shows, podcasts, books and apps. iPad is compatible with both Mac and Windows PCs and

Apple's iCloud services. Apple sold approximately 68 million iPads in FY2014.

Mac is the company's line of desktop and portable PCs. Macs feature Intel microprocessors, the OS X operating system

and include mail, Safari web browser, messages, calendars, reminders, contacts and the iLife apps. The company's

desktop computers include iMac, Mac Pro and Mac mini. Its portable computers include MacBook Pro and MacBook Air.

The company sold approximately 18.9 million Mac products in FY2014.

The company's iPod line of portable digital music and media players includes iPod touch, iPod nano, iPod shuffle and

iPod classic. iPods work with iTunes to purchase and synchronize content. iPod touch, based on the company's iOS

Multi-Touch operating system, is a flash memory- based iPod with an integrated photo and video camera and photo

library app, and also includes Siri. iPod touch is compatible with both Mac and Windows PCs and Apple's iCloud

services. Apple sold approximately 14.4 million iPods in FY2014.

Apple's iTunes app, available for iOS devices, Mac and Windows PCs and Apple TV, keeps users' music, movies, and

TV shows organized in one place. iTunes is integrated with the iTunes Store, the App Store, the iBooks Store, iTunes U

and iTunes Radio. The iTunes Store allows users to purchase and download music and TV shows, rent or purchase

movies and download free Podcasts. The App Store allows customers to discover and download apps and purchase in-

app content. The iBooks Store features e-books from major and independent publishers. iTunes U allows users to

download free lectures, videos, and more from top universities, museums, and other institutions. iTunes Radio provides

a free internet streaming service that allows users to personalize radio stations featuring music from the iTunes Store.

The company also owns Beats Music, which offers a subscription streaming music service that offers a curated listening

experience and complements the company's other music services and offerings.

The Mac App Store allows customers to discover, download and install Mac apps. The Mac App Store offers applications

in education, games, graphics and design, lifestyle, productivity, utilities and other categories. iCloud is the company's

cloud service, which stores music, photos, applications, contacts, calendars, documents and more, and is made

available to multiple iOS devices and Mac and Windows PCs and Apple TV. iCloud's services include iTunes in the

cloud; iCloud Drive; iCloud Photo Sharing; Family Sharing; Find My iPhone; and iPad or Mac and iCloud Backup for iOS

devices. Apple Pay is a service aimed at making mobile payments easy, secure and private.

Apple's operating system software includes iOS and OS X. iOS is the company's Multi-Touch operating system that

serves as the foundation for iOS devices. Apps delivered with iOS for qualifying devices include Safari web browser,

FaceTime video calling, maps, mail, contacts, calendar, clock, weather, calculator, notes, reminders, stocks, compass

and messages. Its other features include predictive typing for Apple's QuickType keyboard, a Health app, and Family

Sharing, which easier sharing of purchases, photos and calendars within the same household. Devices running iOS are

compatible with both Mac and Windows PCs and Apple's iCloud services.

OS X, the company's Mac operating system, is built on an open-source UNIX-based foundation and provides an intuitive

and integrated computer experience. OS X Yosemite is the latest version of OS X. Support for iCloud is built into OS X

so users can access content and information from their other Macs, their iOS devices and other supported devices and

access downloaded content and apps from the iTunes Store. Apps delivered with OS X include mail, Safari web browser,

messages, calendar, reminders, contacts, maps, iBooks and the iLife apps. OS X Yosemite incorporates additional

continuity features including Handoff, which allows users to start an activity on one Mac or iOS device and pass it to

another Mac or iOS device.

Apple's application software includes iLife, iWork, and other application software.

Global - Mobile Phones 0199 - 0152 - 2014

iLife for Mac is the company's consumer-oriented digital lifestyle software application suite included with all Mac

computers. iLife features iPhoto, a digital photo application for storing, viewing, editing and sharing photos; iMovie, a

digital video editing application; and GarageBand, a music creation application that allows customers to play, record and

create music. iWork for Mac is the company's integrated productivity suite designed to help users create, present, and

publish documents, presentations, and spreadsheets. iWork includes Pages for word processing and page layout,

Keynote for presentations, and Numbers for spreadsheets. Apple's other application software includes Final Cut Pro,

Logic Pro X and FileMaker Pro database software.

The company sells a variety of Apple-branded and third-party Mac-compatible and iOS-compatible accessories,

including Apple TV, headphones, cases, displays, storage devices and various other connectivity and computing

products and supplies. It also offers headphones, speakers and audio software under the brand name of Beats.

Apple TV connects to consumers' high definition (HD) TVs and enables them to access iTunes content directly for

streaming HD video, playing music and viewing photos. Content from iTunes Radio, Beats Music and other media

services, including Netflix, YouTube, Flickr, Hulu Plus, Vevo, Major League Baseball (MLB), National Basketball

Association (NBA) and National Hockey League (NHL) is available on Apple TV. Apple TV allows streaming iTunes

content from Macs and Windows PCs through Home Share and through AirPlay from compatible Mac and iOS devices.

Apple Watch is a personal electronic device that combines a watch technology with an iOS-based user interface created

specifically for a smaller device. Apple Watch features Digital Crown, a navigation tool that allows users to scroll, zoom

and navigate. Apple Watch enables customers to communicate in new ways from their wrist and features Force Touch, a

technology that senses the difference between a tap and a press and allows users to access controls within apps.

Apple also offers product support and services under the brand name of AppleCare, which includes a range of support

options for the company's customers. These include assistance that is built into software products, printed and electronic

product manuals, online support including comprehensive product information as well as technical assistance, the

AppleCare Protection Plan (APP) and the AppleCare+ Protection Plan (AC+). APP is a fee-based service that typically

includes two to three years of phone support, hardware repairs and dedicated web-based support resources. AC+ is a

fee-based service available in certain countries for iPhone and iPad. AC+ offers additional coverage under some

circumstances for instances of accidental damage in addition to the services offered by APP.

In addition to the above offerings, the company offers iOS and Mac Developer Programs to support app developers with

the development, testing and distribution of iOS and Mac apps through the App Store and the Mac App Store.

Development tools included with the company's Developer Programs include Xcode, the company's integrated

development environment for creating apps for iOS devices and Macs.

In December 2014, Apple and IBM delivered the first wave of IBM MobileFirst for iOS solutions in a new class of made-

for-business apps and supporting cloud services that bring IBM's big data and analytics capabilities to iPhone and iPad

users in the enterprise. In the same month, Apple's models of iPad Air 2 and iPad mini 3 with cellular networking were

made available in China.

Key Metrics

The company recorded revenues of $182,795 million in the fiscal year ending September 2014, an increase of 7.0%

compared to fiscal 2013. Its net income was $39,510 million in fiscal 2014, compared to a net income of $37,037 million

in the preceding year.

Apple Distribution International, Hollyhill Industrial Estate Hollyhill, Cork, IRL

Global - Mobile Phones 0199 - 0152 - 2014

Table 8: Apple Inc.: key financials ($)

$ million 2010 2011 2012 2013 2014

Revenues 65,225.0 108,249.0 156,508.0 170,910.0 182,795.0

Net income (loss) 14,013.0 25,922.0 41,733.0 37,037.0 39,510.0

Total assets 75,183.0 116,371.0 176,064.0 207,000.0 231,839.0

Total liabilities 27,392.0 39,756.0 57,854.0 83,451.0 120,292.0

Employees 46,600 60,400 72,800 80,300 92,600

SOURCE: COMPANY FILINGS M A R K E T L I N E

Table 9: Apple Inc.: key financial ratios

Ratio 2010 2011 2012 2013 2014

Profit margin 21.5% 23.9% 26.7% 21.7% 21.6%

Revenue growth 52.0% 66.0% 44.6% 9.2% 7.0%

Asset growth 58.3% 54.8% 51.3% 17.6% 12.0%

Liabilities growth 72.7% 45.1% 45.5% 44.2% 44.1%

Debt/asset ratio 36.4% 34.2% 32.9% 40.3% 51.9%

Return on assets 22.8% 27.1% 28.5% 19.3% 18.0%

Revenue per employee $1,399,678 $1,792,202 $2,149,835 $2,128,394 $1,974,028

Profit per employee $300,708 $429,172 $573,255 $461,233 $426,674

SOURCE: COMPANY FILINGS M A R K E T L I N E

Figure 13: Apple Inc.: revenues & profitability

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

Figure 14: Apple Inc.: assets & liabilities

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

Lenovo Group Limited

Table 10: Lenovo Group Limited: key facts

Head office: 23rd Floor, Lincoln House, Taikoo Place, 979 King's Road, Quarry Bay, HKG

Telephone: 852 2516 3838

Website: www.lenovo.com

Financial year-end: March

Ticker: 992

Stock exchange: Hong Kong

SOURCE: COMPANY WEBSITE M A R K E T L I N E

Lenovo Group Limited (Lenovo or "the company") is engaged in the development, manufacturing and marketing of

technology products and services. Its product lines include commercial PCs, consumer PCs, as well as servers,

workstations, and a range of mobile internet devices, including tablets and smartphones. The company serves both

enterprise and consumer markets and has operations across Asia Pacific, Europe and Americas.

The company is organized into four geographical segments: China; Asia-Pacific/Latin America (APLA); Europe, the

Middle East and Africa (EMEA); and North America. The company's product segments include notebook computers,

desktop computers, mobile internet and digital home (MIDH), other personal technology products and services, and

other goods and services.

The notebook computer product segment primarily offers laptops and notebooks to enterprise and consumer markets.

The company offers three lines of laptops and notebooks, which include ThinkPad, IdeaPad and Essential. ThinkPad

notebooks are designed for businesses, schools and power users. IdeaPad notebooks are mainly designed for home,

home office, and school use. The company's Essential series notebooks targets daily computing needs.

The desktop computers products segment mainly offers desktops, all-in-ones PCs, and workstations. Lenovo offers three

lines of PCs, including IdeaCentre, ThinkCentre and Essential. It also offers workstations under the ThinkStation brand.

The company also provides servers under the ThinkServer brand.

The MIDH group is responsible for creating mobile internet-focused devices, including smartphones and tablet products.

The company also offers other related products such as accessories and upgrades, batteries and power, cables and

connectors, carrying cases, docks and port replicators, keyboards and mice, carrying cases, storage, software and

monitors, and tablet accessories.

Lenovo has major research centers in Yamato, Japan; Beijing, Shanghai and Shenzhen, China; and Raleigh, North

Carolina.

In January 2014, the company reorganized its operations into four new segments, including PC business group, which

includes Lenovo and Think brands; mobile business group, which includes smartphones, tablets and smart TVs;

enterprise group which includes servers and storage; and ecosystem and cloud services group, which includes both

Android and Windows opportunities.

In October 2014, Lenovo completed the acquisition of Motorola Mobility from Google for approximately $2.9bn. Motorola

is a leading provider of mobile phones, offering such devices as the Moto X, Moto G, Moto E and DROID series of

smartphones. Subsequent to the acquisition, Motorola operates as a wholly-owned subsidiary of Lenovo.

Global - Mobile Phones 0199 - 0152 - 2014

Key Metrics

The company recorded revenues of $38,707 million in the fiscal year ending March 2014, an increase of 14.3%

compared to fiscal 2013. Its net income was $817 million in fiscal 2014, compared to a net income of $635 million in the

preceding year.

Table 11: Lenovo Group Limited: key financials ($)

$ million 2010 2011 2012 2013 2014

Revenues 16,604.8 21,594.0 29,574.4 33,873.4 38,707.0

Net income (loss) 129.4 273.2 473.0 635.1 817.0

Total assets 8,955.9 10,705.9 15,860.7 16,882.0 18,357.1

Total liabilities 7,349.9 8,871.0 13,412.8 14,201.8 15,332.4

Employees 22,205 27,039 27,000 35,026 54,000

SOURCE: COMPANY FILINGS M A R K E T L I N E

Table 12: Lenovo Group Limited: key financial ratios

Ratio 2010 2011 2012 2013 2014

Profit margin 0.8% 1.3% 1.6% 1.9% 2.1%

Revenue growth 11.4% 30.0% 37.0% 14.5% 14.3%

Asset growth 42.0% 19.5% 48.1% 6.4% 8.7%

Liabilities growth 47.1% 20.7% 51.2% 5.9% 8.0%

Debt/asset ratio 82.1% 82.9% 84.6% 84.1% 83.5%

Return on assets 1.7% 2.8% 3.6% 3.9% 4.6%

Revenue per employee $747,796 $798,624 $1,095,348 $967,093 $716,796

Profit per employee $5,826 $10,105 $17,519 $18,132 $15,130

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

Figure 15: Lenovo Group Limited: revenues & profitability

SOURCE: COMPANY FILINGS M A R K E T L I N E

Figure 16: Lenovo Group Limited: assets & liabilities

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

Samsung Electronics Co., Ltd.

Table 13: Samsung Electronics Co., Ltd.: key facts

Head office: 129 Samsung-ro, Yeongtong-gu, Suwon-si, Gyeonggi-do, KOR

Telephone: 82 2 2255 0114

Website: www.samsung.com

Financial year-end: December

Ticker: 005930, SMSN

Stock exchange: Korea, London

SOURCE: COMPANY WEBSITE M A R K E T L I N E

Samsung Electronics Co., Ltd. (Samsung or "the company") is a global information technology (IT) company engaged in

the manufacture and distribution of home appliances such as televisions (TVs), monitors, printers, refrigerators, and

washing machines as well as mobile telecommunications products such as smartphones and tablets. Samsung also

provides key electronic components such as dynamic random-access memory (DRAM) and non-memory

semiconductors. The company, a part of the Samsung group, operates through more than 220 subsidiaries around the

world.

The company operates through three business divisions: IT and mobile communications (IM), consumer electronics

(CE), and device solutions (DS). DS includes semiconductor and the display panel businesses.

The IM division includes the company's mobile communications, networks, and media solution business. The segm ent's

mobile communications business specializes in manufacture and sale of smartphones, notebooks, tablet personal

computers (PCs), and wearable devices. The networks business offers solutions for mobile worldwide interoperability for

microwave access (WiMAX), long-term evolution (LTE), wideband code division multiple access (W/CDMA) and code

division multiple access (CDMA). Samsung's media solution business offers apps, including ChatON, Group Play and

WatchOn.

The company's CE segment includes visual display, digital appliance, printing solution and health and medical

equipment businesses. The company's visual display business offers TVs, monitors, set-top boxes, home theaters and

sound bars. The digital appliance business offers refrigerators, washing machines, air-conditioners, vacuum cleaners,

smart ovens, and air purifiers. Samsung's printing solution business offers printers and multifunction printers (MFPs).

The health and medical equipment business offers digital X-rays and in-vitro diagnostics devices.

Samsung's DS division includes memory, system large scale integration (LSI) device, and light emitting diode (LED)

businesses. The company's memory business offers dynamic random-access memory (DRAM), NAND Flash, solid-state

drive (SSD) and eMMC-based multi-chip package (eMCP) products. The system LSI business offers Mobile AP (access

points), complementary metal-oxide-semiconductor (CMOS) image sensor and foundry services. The LED business

offers LED packages for TVs and IT products, LED lighting packages, as well as LED packages for automotive lighting.

27 11 254 3600

Key Metrics

The company recorded revenues of $195,768 million in the fiscal year ending December 2014, a decrease of 9.8%

compared to fiscal 2013. Its net income was $21,914 million in fiscal 2014, compared to a net income of $28,312 million

in the preceding year.

Samsung Electronics South Africa Ltd., Cnr. Gazelle & Lechwe Street, Corporte Park Randjespark Ext., 70M

Johannesburg, ZAF

Global - Mobile Phones 0199 - 0152 - 2014

Table 14: Samsung Electronics Co., Ltd.: key financials ($)

$ million 2010 2011 2012 2013 2014

Revenues 146,802.5 156,649.5 190,923.6 217,056.2 195,767.7

Net income (loss) 15,329.6 13,038.8 22,011.7 28,311.6 21,914.0

Total assets 127,491.2 147,752.8 171,906.0 203,238.3 218,758.7

Total liabilities 42,665.1 51,063.3 56,574.5 60,816.3 59,179.3

SOURCE: COMPANY FILINGS M A R K E T L I N E

Table 15: Samsung Electronics Co., Ltd.: key financials (KRW)

KRW million 2010 2011 2012 2013 2014

Revenues 154,630,000.

0 165,002,000.

0 201,103,613.

0 228,629,667.

0 206,205,987.

Net income (loss) 16,147,000.0 13,734,000.0 23,185,375.0 29,821,215.0 23,082,499.0

Total assets 134,289,000.

0 155,631,000.

0 181,072,000.

0 214,075,018.

0 230,422,958.

Total liabilities 44,940,000.0 53,786,000.0 59,591,000.0 64,059,008.0 62,334,770.0

SOURCE: COMPANY FILINGS M A R K E T L I N E

Table 16: Samsung Electronics Co., Ltd.: key financial ratios

Ratio 2010 2011 2012 2013 2014

Profit margin 10.4% 8.3% 11.5% 13.0% 11.2%

Revenue growth 13.4% 6.7% 21.9% 13.7% (9.8%)

Asset growth 19.7% 15.9% 16.3% 18.2% 7.6%

Liabilities growth 14.8% 19.7% 10.8% 7.5% (2.7%)

Debt/asset ratio 33.5% 34.6% 32.9% 29.9% 27.1%

Return on assets 13.1% 9.5% 13.8% 15.1% 10.4%

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

Figure 17: Samsung Electronics Co., Ltd.: revenues & profitability

SOURCE: COMPANY FILINGS M A R K E T L I N E

Figure 18: Samsung Electronics Co., Ltd.: assets & liabilities

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global - Mobile Phones 0199 - 0152 - 2014

Xiaomi Inc.

Table 17: Xiaomi Inc.: key facts

Head office: NO. 68, Qinghe Middle Street, 100102 Beijing, CHN

Telephone: 86 01060606666

Fax: 86 01060606666 1101

Website: www.mi.com

SOURCE: COMPANY WEBSITE M A R K E T L I N E

Xiaomi Inc. (Xiaomi) is a Chinese electronics and technology company. The company's product range includes

smartphones, tablet computers, televisions, set-top boxes, headphones and wearables. In order to retain lower prices,

the company sells its products directly to consumers in China, Taiwan, Hong Kong, Singapore, Malaysia, the Philippines,

India and Indonesia. Xiaomi was founded in 2010 and has since grown to become one of the world's largest smartphon e

manufacturers, selling a total of 61.1 million smartphones in 2014.

Key Metrics

Full financial information is unavailable for this company. However, the company has revealed that it accrued revenues

of CNY74.3bn (approximately $12.1bn) in 2014, an increase of 135% over 2013. However, the company's profit margin

only stood at around 1.3% in 2013.

Global - Mobile Phones 0199 - 0152 - 2014

METHODOLOGY

MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-

checked and presented in a consistent and accessible style.

Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by

analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases

provide the foundation for all related industry profiles

Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company

profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market

overview

Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each

definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the

market and our clients

Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and

trends

MarketLine aggregates and analyzes a number of secondary information sources, including:

- National/Governmental statistics

- International data (official international sources)

- National and International trade associations

- Broker and analyst reports

- Company Annual Reports

- Business information libraries and databases

Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data to

be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can

then be refined according to specific competitive, regulatory and demand-related factors

Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

Global - Mobile Phones 0199 - 0152 - 2014

Industry associations

CTIA - The Wireless Association

1400 16th Street, NW, Suite 600, Washington, DC 20036, USA

Tel.: 1 202 785 0081

Fax: 1 202 785 0721

www.ctia.org

GSMA Floor 2, The Walbrook Building, 25 Walbrook, London, EC4N 8AF, GBR

Tel.: 44 207 356 0600

Fax: 44 20 7356 0601

www.gsma.com

Regulierungsbehörde für Telekommunikation und Post Tulpenfeld 4, 53113 Bonn, DEU

Tel.: 49 228 14 0

Fax: 49 22 814 8872

www.bundesnetzagentur.de

Ofcom (Office of Communications) Ofcom Contact Centre, Riverside House, 2a Southwark Bridge Road, London, SE1 9HA, GBR

Tel.: 44 20 7981 3040

Fax: 44 20 7981 3334

www.ofcom.org.uk

China Mobile Communications Association 11A East Area, Century Golden Resource Hotel, 69 Banjing Road, Haidian District, Beijing, CHN

Tel.: 86 10 88452655

Fax: 86 10 88452630

www.cmca.org.cn

Related MarketLine research

Industry Profile

Mobile Phones in Europe

Mobile Phones in Asia-Pacific

Mobile Phones in the United States

Mobile Phones in Japan

Mobile Phones in China

Global - Mobile Phones 0199 - 0152 - 2014

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