Samsung Displaces Nokia as Top Cellphone Brand in 2012 and Takes Decisive Smartphone Lead Over Apple December 18, 2012 WAYNE LAM For the first time in 14 years, wireless communications giant Nokia will not sit atop the global cellphone business on an annual basis at the end of 2012— with Samsung set to seize the mobile handset market’s market’s top rank.
Samsung is expected to account for 29 percent of worldwide cellphone shipments, up from 24 percent in 2011, according to the IHS iSuppli Mobile and Wireless Communications Service at information and analytics provider IHS (NYSE: IHS). Nokia’s share this year will drop to 24 percent, down from 30 percent last year, as presented in Table 1.
A dislodged Nokia will cause Samsung to rise to first place for the full year of 2012, up from the second rank in 2011, the first time the South Korean electronics titan will occupy the top on a yearly basis. Nokia will fall to the runner-up runner-up spot, the first time since since 1998 it won’t be in peak position position for overall cellphone shipments during a full calendar year.
“The competitive reality of the cellphone market in 2012 was ‘live by the smartphone; die by the smartphone,’” smartphone,’” said Wayne Lam, senior analyst for wireless communications at IHS. “Smartphones represent the fastest-growing segment of the cellphone market—and will account for nearly half of all wireless handset shipments for all of 2012. Samsung’s successes and Nokia’s struggles in the cellphone market this year were determined entirely by the two companies’ divergent fortunes in the smartphone sector.”
Global smartphone shipments are set to rise by 35.5 percent this year, while overall cellphone shipments will increase by approximately 1 percent. This rapid growth will propel 2012 smartphone penetration to 47 percent, up from 35 percent in 2011.
Samsung’s Success vs. Nokia’s Nosedive Samsung's success has been built on its “fast follower” strategy for design and manufacturing. The company produces dozens of new smartphone models every year that address all segments of the market, from the high end to the low end. Samsung monitors the big trends in smartphone design, user needs and unmet market opportunities, then creates products to fit those markets quickly and efficiently.
Meanwhile, Finnish-based Nokia is mired in transitioning its smartphone line to the Windows operating system, resulting in declining shipments for the company. Sales of the company’s older Symbian-based phones have plunged, while its new Microsoft Windows 7-based handsets haven’t been able to make up for the loss so far.
Samsung is expected to post the best performance among the Top 5 smartphone brands in 2012, with its share of global smartphone shipments rising 8 points to 28 percent, up from 20 percent in 2011. In contrast, Nokia will suffer the biggest decrease, with its share forecast to plunge by 11 points to 5 percent in 2012, down from 16 percent in 2011, as presented in Table 2.
Samsung Pulls Ahead of Apple Samsung and Apple ended 2011 in a neck-and-neck battle for leadership in the smartphone market, with only 1 percentage point of market share separating them. However, entering the 2012 year, Samsung moved ahead decisively ahead of Apple with a wide range of Android smartphone offerings. Samsung made significant gains in both the high end as well as the low-cost market with its Galaxy line of smartphones. This diversified market approach has allowed Samsung to address a larger target audience for its phones than Apple’s limited premium iPhone line.
The Samsung and Apple duopoly represents the dominant force in the smartphone market, with the two companies accounting for 49 percent of shipments in 2012, up from 39 percent in 2011. While Nokia and Canada’s Research in Motion (RIM) also held double-digit shares of the market in 2011, Samsung and Apple remain the only two players that will each command a double-digit portion of the smartphone space in 2012.
HTC and RIM Face Challenges Along with Nokia, two other entities—HTC of Taiwan, as well as RIM— struggled throughout 2012 in the smartphone market.
HTC is facing a tough battle against Samsung, an acknowledged technology powerhouse, in the Android smartphone market. Market share for HTC will shrink to 5 percent in 2012, down from 9 percent in 2011.
RIM, meanwhile, lacking a fresh new version of its operating system, has seen its market share slip as the company’s traditional enterprise consumers left the platform for both Apple’s iOS and Google’s Android. RIM’s share will fall to 5 percent in 2012, down from 11 percent in 2011.
2013: Smartphones go Mainstream With the growth momentum behind smartphones, IHS anticipates that the smartphone penetration rate in 2013 will elevate smartphones into the majority among all phone segments, at 56 percent. This event will mark a significant tipping point in the mobile handset market, as the smartphone takes a dominant position in the industry.
Samsung has already overtaken Nokia and Apple in smartphone sales, according to a research note obtained by Bloomberg.
According to Neil Mawston, an analyst at Strategy Analytics, Samsung sold 18 to 21 million smartphones worldwide in the second quarter of the year (April – June) compared to 20.3 million Apple iPhones and 16.7 million Nokia smartphones. Much of Samsung's second quarter success is due to the China launch last week of the Samsung Galaxy S II, which has yet to launch in the U.S. According to Samsung, a single Galaxy S II device sold every 1.5 seconds since the phone's April launch, and the smartphone did much to boost Samsung's presence within European markets. It shattered the company's sales records by reaching more than three million units sold within the device's first 55 days of existence. See PCMag's review of the Samsung Galaxy S II (Unlocked) and slideshow below. PCMag mobile analyst Sascha Segan called it the finest Android smartphone available today, but astronomically priced at $799 for the unlocked verison. Samsung Galaxy S II (Unlocked) VIEW ALL PHOTOS IN GALLERY In the first quarter, Samsung reported it had sold 10.8 million units worldwide in the first quarter and was in a distant fourth behind Nokia, Apple, and RIM; but again, this was before the Galaxy S II had launched. Meanwhile, the South Korean Android manufacturer is also battling patent wars against Microsoft and and Apple. In fact Apple has filed for an injunction over the Galaxy family in the U.S. for allegedly copying the look, feel, and technology of the iPhone. For more from Sara, follow her on Twitter @sarapyin.
