Eurocom Cellular Communications, owned by Eurocom CEO Shaul Alovitz (51%) and Arison Holdings (49%), sold over 500,000 wireless devices in the first half of 2004, considerably more than in the corresponding period last year.
Eurocom Cellular Communications CEO Ilan Greenboim predicts that the company will have a very good second half, and that it will sell one million devices for the year as a whole. Revenue from sales of wireless devices is expected to reach NIS 1.1 billion, similar to the quarterly revenue of an Israeli wireless operator. Communications market sources estimate that the company's revenue will be 70% higher in 2004 than in 2003.
Eurocom Cellular Communications had hundreds of millions of shekels in sales in 2003. Greenboim declined to disclose the company's profit margin, since it is a private company, but it is presumably similar to that of its rival, Suny Electronics (TASE:SUNY), which publishes complete financial reports, as a publicly-traded company.
Apex-Mutavim Investments analyst Moshe Misgav estimates Eurocom Cellular Communications' operating profit margin from the sale of wireless devices at 18%, which means that the company's operating profit is about NIS 200 million.
Apex estimates that 1.9 million wireless devices were sold in Israel in 2003, and that over two million will be sold in 2004. If these numbers are accurate, then Nokia (NYSE; LSE; HEX:NOK) controls almost half of Israel's wireless devices market.
Misgav also estimates that Nokia makes 44% of the 6.5 million wireless devices in Israel, Samsung (KSE:830) makes 35%, and other manufacturers make 21%.
Eurocom Cellular Communications succeeded even though it only sells devices to Cellcom and Partner Communications (Nasdaq:PTNR; TASE:PTNR; LSE:PCCD). Nokia does not market Hebrew-language CDMA telephones, which means it cannot sell to Pele-Phone at this time.
Greenboim said devices would soon be marketed to Pele-Phone as well, probably in early 2005, which would substantially boost Eurocom Cellular Communications' sales potential. "Eurocom's market share with Cellcom and Partner is now almost 70%, and together with Pele-Phone, Eurocom can achieve a much greater share of the Israeli market," said an industry source.
Published by Globes [online] - www.globes.co.il - on July 13, 2004