June 13, 2011

Samsung, Apple Overtaking Nokia In Smartphone Market

Smartphone maker Nokia is struggling to hold its place as a leader in mobile communications technology but products from Apple and Samsung are quickly bumping Nokia down the list. Nokia has lead the smartphone market since it emerged in 1996, Reuters is reporting.

Nomura, a global investment banking and securities firm, said: "Nokia looks set to relinquish its smartphone crown to Samsung and Apple. Further emphasizing the shift in power to Asia is our forecast for HTC to almost match Nokia during 2012."

Two other research firms, Gartner and Canalys, have claimed Nokia will lose as smartphone volume leader later this year. Nokia created the smartphone market in 1996 with the launch of its Communicator model.

"If Nokia's new phones are not well received in the third quarter and (with) the Galaxy S2 ramping up, Samsung might overtake them and become the smartphone leader in Q3," Gartner analyst Carolina Milanesi told Reuters.

Apple's iPhone and Google Android devices have appealed to a new generation of mobile users with capabilities and applications that have turned the entire smartphone market on its head. These competitors are priced strongly and have high profit margins.

From a manufacturing perspective, Nokia still makes more cellphones than Samsung due to its position in basic cellphones and its wider distribution network in emerging countries. However these basic phones are under price pressure from low-priced, off-brand phones from smaller manufacturers.

Nokia is hoping to appeal to a market that does not want Apple or Android operating systems by switching to a Microsoft operating system from its own failing Symbian platform. The Microsoft OS, named Windows Phone 7, has attracted few developers, is lacking in many features that are expected as basic needs and is generally several years behind in polish.

On May 31 Nokia abandoned hope of meeting key sales targets just weeks after setting them, raising questions over whether its new Chief Executive Stephen Elop, can deliver on the turnaround he promised.


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