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Samsung unseats Nokia as top cell phone brand this year

Posted: 20 Dec 2012 ?? ?Print Version ?Bookmark and Share

Keywords:cell phone shipment? smartphones? manufacturing?

According to the latest data from IHS, for the first time in 14 years, Nokia will give way to Samsung as the leading global cell phone brand on an annual basis at the end of the year. The Korean company is seen to account for 29 per cent of worldwide cell phone shipments, up from 24 per cent in 2011, while Nokia's share this year will drop to 24 per cent, down from 30 per cent last year, noted the market research firm.

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 spot, the first time since 1998 it won't be in peak position for overall cell phone shipments during a full calendar year.

"The competitive reality of the cell phone market in 2012 was 'live by the smartphone; die by the smartphone,'" said Wayne Lam, senior analyst for wireless communications at IHS. "Smartphones represent the fastest-growing segment of the cell phone marketand will account for nearly half of all wireless handset shipments for all of 2012. Samsung's successes and Nokia's struggles in the cell phone 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 per cent this year, while overall cell phone shipments will increase by about one per cent. This rapid growth will propel 2012 smartphone penetration to 47 per cent, up from 35 per cent in 2011.

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, 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 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 eight points to 28 per cent, up from 20 per cent in 2011. In contrast, Nokia will suffer the biggest decrease, with its share forecast to plunge by 11 points to five per cent in 2012, down from 16 per cent in 2011.

Samsung and Apple ended 2011 in a neck-and-neck battle for leadership in the smartphone market, with only one 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 per cent of shipments in 2012, up from 39 per cent 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.

Along with Nokia, two other entitiesHTC of Taiwan, as well as RIMstruggled 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 five per cent in 2012, down from nine per cent 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 five per cent in 2012, down from 11 per cent in 2011.

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 per cent. This event will mark a significant tipping point in the mobile handset market, as the smartphone takes a dominant position in the industry.





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