Smartphone Industry Financial Analysis - 3204 Words

A Financial Analysis of the Smartphone Industry Maria Thompson Jared Fowler John Froman Michael Collingsworth Emily Barnes Emily Pounders Robert Crittenden The University of North Alabama September 23, 2011 A Financial Analysis of the Smartphone Industry The industry of Smartphones is rapidly growing. Through our analysis, we have seen companies that have taken advantage of this rapid growth and some that have only experienced moderate growth. Through comparative analysis of financial statements, such as the income statement and balance sheet and the use of various ratios, we have analyzed the difference between seven companies in the smartphone industry. Upon close look at certain growth trends and common size ratio†¦show more content†¦In this same year, Alcatel reported an operating income loss of $409.49 million. This is significantly better than the loss of $7,474.58 million they reported at the end of 2008. Alcatel has reported losses in operating income for four out of five years which resulted in Alcatel’s operating income growth being negative as well. Motorola has also had consistent poor operating income growth with a negative four out of the five years. Nokia, Motorola, Hewlett-Packard, and Dell, all had operating margins in the single digits, from 4.00% to 9.00%. Research in Motion had a 23.29% margin. Research in Motion actually had a better operating margin than Apple for three of the past five years. Research in Motion could be using a cost cutting strategy to be able to compete in the market. Most of these companies were in other aspects of the electronics industry before venturing into the Smartphone segment. As a result, their marketing division hasn’t caught up the marketing exposure that Apple has. Net Income Growth The Net Income category has Apple leading with $14.01 million in 2010. Although Hewlett-Packard recorded higher profits at the beginning, they have followed second to Apple for the last two years. Alcatel, on the other hand, remained in the negative all five years in this category. The companies with net income problems have also had operating income inequalities. The lossShow MoreRelatedSkype: Strategic Management and Sara Lee1472 Words   |  6 PagesApple’s strategy in computers, personal media players, and smartphones? Have its strategies in its core businesses yielded success? Explain. 3. What does a competitive strength assessment reveal about Apple’s computer business, as compared to the leaders in the personal computer industry? Use the methodology in Table 4.2 to support your answer. 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