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May 01, 2012

Samsung Overtakes Nokia for Cellphone Lead According to IHS Report

By Ed Silverstein, TMCnet Contributor

Samsung (News - Alert) (News - Alert) Electronics is now the most popular producer of cell phones, according to a new industry study. It surpassed Nokia Corp. in the Q1. When it comes to smartphones, Apple (News - Alert) posted top in the quarter followed by Samsung, which captured second place, the study adds.According to a report from IHS iSuppli, in the Q1 Samsung shipped 92 million cell phones. Nokia shipped 83 million cell phones during the same quarter. It is the first quarter since 1998 that Nokia does not have the top spot for cellphone sales worldwide, stated IHS (News - Alert) (News- Alert).

During the quarter, Samsung’s shipments dropped by 13 percent from the 4Q of 2011. Nokia, during the quarter, saw the number of its cell phones shipped drop by 27 percent.

When it comes to smartphones, Apple shipped 35 million during the Q1. In the Q4, Apple was in the top spot, and Samsung was in second place. Between the quarters, Apple’s smartphone shipments dropped 5 percent, compared to an 11 percent drop for Samsung.

IHS notes that often there is a reduction in the number of phones sold after the winter holiday season.

“With cellphones now accounting for more than 40 percent of Samsung’s overall revenue, it’s clear that the company’s continued investments in smartphone hardware and software R&D are paying off,” stated Wayne Lam, senior analyst and wireless communications of IHS, in a press release. “The company is not only cashing in on the market’s shift to smartphones, but is also succeeding in other cellphone product categories, allowing it to capture the overall market lead. What makes Samsung’s performance even more impressive is that the company’s latest Galaxy S III handset has yet to be launched, with shipments set to start in May. This indicates Samsung is likely to make further progress in market share in 2012.”

“Samsung’s surpassing of Nokia for cellphone market leadership represents not only a changing of the guard among handset brands but also a fundamental shift in the structure of the wireless market,” Ian Fogg, senior principal analyst, mobile at IHS, added in the release. “Cellphone market growth is now being generated exclusively by the smartphone segment, and not by the feature phones, entry-level cellphones and ultra-low-cost handsets (ULCH) that had fueled the industry’s expansion over the previous decade. Samsung has successfully ridden the wave of smartphone adoption to attain market leadership. Meanwhile, Nokia is in the midst of transitioning its smartphone strategy, resulting in declining shipments for the company.”

Samsung is using different smartphone operating system platforms, such as: Android (News - Alert), Windows Phone (News - Alert) and Samsung’s own bada. On the other hand, Nokia is focusing on Windows Phone.

“Samsung is reaping the rewards of strong execution in product design, distribution and marketing,” Fogg explained in the statement. “The company has been bold and innovative with handset form factors, featuring differentiated handsets such as the Galaxy Note with its sizable 5-inch display, and a wide range of handsets in every other conceivable screen size.”

It was also reported that Apple sold some 19 million iPhones in the Q1 of 2011, and a year later shipments jumped by 88 percent to 35 million, added IHS.

Also, Nokia could be at risk because of its reliance on European and Asian markets because iPhone (News - Alert) (News- Alert) shipments are getting more global.

In a related matter, Research in Motion Ltd., will be showing the BlackBerry (News - Alert) 10 operating system at BlackBerry World this week in Orlando, Fla., TMCnet reports. It will be launched later this year. RIM’s smartphone shipments dropped to 11 million during in the Q1, which is down 21 percent from 14 million during the Q4, the study said.

Smartphone shipments are expected to increase by 35 percent in 2012, IHS said, while feature phones, entry-level phones and ULCHs are expected to drop. Overall, the cellphone sector will increase 7.4 percent in 2012, according to IHS.

Edited by Brooke Neuman
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