Samsung confident of outselling Nokia in 2012
LAS VEGAS/HELSINKI (Reuters) – Samsung Electronics Co. is confident it will become the world’s largest cellphone maker in 2012, ending Nokia’s 14-year reign in the mobile handset market.
Samsung became the world’s No 1 smartphone maker in the third quarter of 2011 and is quickly building on its supremacy with sleek designs and a rich product lineup.
By contrast, the latest models from the likes of HTC, Nokia and Research In Motion, maker of the Blackberry, are struggling to lure consumers.
Samsung chief executive Choi Gee-sung told reporters in Las Vegas on Monday the company had overtaken Nokia in revenue terms in its latest reported quarter and was confident of topping the Finnish group in shipments this year.
“It really highlights the level to which Nokia has struggled to retain momentum through 2011,” said Tim Shepherd, an analyst at technology research firm Canalys.
“Samsung is really charging forward at the moment. It is delivering really compelling products to the market, and consumers are responding,” he said.
NOKIA STRUGGLES
Losing the top spot on the market would mean another defeat for Finland’s Nokia, which rose to the top of cellphone industry in 1998 when it overtook Motorola in phone sales and was the driver for the Nordic economy for a decade.
Nokia’s dominant position began to weaken in 2007 when Apple entered the industry and grew from nothing to the world’s largest smartphone maker in four years.
In recent years Nokia’s market share and profits have dropped, hitting its shares, which are down seven-fold from its 2007 high of 28.13 euros and which have halved since last year’s shift to Microsoft software in its smartphones.
Samsung’s bullish forecast is in line with some analysts, including Royal Bank of Scotland, betting Samsung would build on its momentum to overtake Nokia in 2012. But on average, analysts have expected Nokia to keep its lead on the market.
According to the latest polls by Reuters, Nokia was expected to sell 418 million phones in 2011, versus Samsung’s 320 million. The gap would narrow this year to 388 million versus 359 million.
“Samsung is getting closer to Nokia very quickly,” said IDC analyst Francisco Jeronimo. “Their smartphones strategy has proven right, and on feature phones they are growing fast in emerging markets too.”
“Samsung became a recognized brand, and their successful smartphones are helping their feature phones business in regions where smartphones are still too expensive,” he said.
EMERGING-MARKETS
CHALLENGE?
The South Korean firm, the world’s biggest technology company by revenue, said in early December its 2011 sales had reached 300 million handsets for the first time, mainly led by a nearly four-fold jump in smartphone sales.
“Considering how strong Nokia still is in the emerging markets, Samsung’s expectation seems to imply that Nokia will miserably fail in mature markets,” said Gartner analyst Carolina Milanesi.
Analysts expect the cellphone market growth to slow in 2012, with weak demand seen in Western Europe and stronger demand for emerging markets, which have historically been Nokia’s stronghold.
“I think it will be hard for Samsung to beat Nokia without more aggressively targeting emerging markets,” Milanesi said.
Choi said Samsung would likely meet its 2015 sales target ahead of schedule and plans to increase investment this year.