MM WORKSHEET 3 SOLUTION.doc

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Department
Business Administration
Course
Business Administration 3301K
Professor
Bob Larose
Semester
Winter

Description
Worksheet: Metric 3 Market Share & Market Analytics (SOLUTION) Use the industry overview below to answer the questions that follow: Mobile Phones in the United States The mobile phone market in the United States covers the sales of mobile phone devices, smart phones, and PDAs (personal digital assistants). Table X below provides the annual sales volume of mobile phones from 2004 to 2009. Table XX details the market share of the top handset manufacturers. Table 1: US Mobile Phones: Sales Volume & Value 2004-2009 2004 2005 2006 2007 2008 2009 ‘000 66,556. 87,543. 110,228 120,629 130,309 134,673 units 1 1 .1 .4 .9 .5 US$ bn 4.1 5.4 6.9 8.3 10.1 10.6 Table 2: Mobile Phones Company Shares 2005-2009 % retail revenue 2005 2006 2007 2008 2009 share Samsung America Inc 15.7 15.1 17.3 22.1 25.4 L.G. Electronics USA 15.9 16.5 15.2 20.6 21.5 Motorola Inc 30.4 34.8 33.5 22.8 16.4 Kyocera International 5.4 4.9 4.0 9.2 9.9 Inc Research in Motion Ltd 0.7 1.1 2.5 6.0 9.0 Apple Inc - - - 4.9 7.4 Nokia United States 15.4 18.1 12.5 7.5 6.5 Sanyo North America 4.3 4.2 4.5 - - Corp Apple Computer Inc - - 1.4 - - Others 12.1 5.4 9.0 6.9 3.8 Total 100.0 100.0 100.0 100.0 100.0 1) What is the annual 2009 revenue in dollars of the top 4 mobile phone companies? Answer: Revenue Market Share (%) = Revenue ($) / Total Market Sales Revenue ($) Revenue ($) = Revenue Market Share (%) * Total Market Sales Revenue ($) Samsung America Inc: Revenue = 25.4% * $10.6 billion = 0.254 * $10.6 billion = $2.6924 billion L.G. Electronics USA: Revenue = 21.5% * $10.6 billion = 0.215 * $10.6 billion = $2.279 billion Motorola Inc: Revenue = 16.4% * $10.6 billion = 0.164 * $10.6 billion = $1.7384 billion Kyocera International Inc: Revenue = 9.9% * $10.6 billion = 0.099 * $10.6 billion = $1.0494 billion 2) If the performance of the US mobile phone market is expected to continue to grow from 2009 to 2012 at a rate of 5% per year, what will the size of the market be by the end of 2012? Answer: Revenue 2009 = $10.6 billion Revenue 2010 = Revenue 2009 + 5% * Revenue 2009 = $10.6 billion + 0.05 * $10.6 billion = $10.6 billion + $0.53 billion = $ 11.13 bill
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