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Tuesday, December 18, 2012
Samsung Displaces Nokia as Top Cellphone Brand in 2012

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.

IHS iSupply reported today that Samsung is set to seize the mobile handset market?s top rank for the year. The Korean company is expected to account for 29 percent of worldwide cellphone shipments, up from 24 percent in 2011, according to analytics provider. Nokia?s share this year will drop to 24 percent, down from 30 percent last year, IHS iSupply added.

Nokia will fall to the runner-up spot, the first time since 1998 it won?t be in peak 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,'" 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 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.

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.

IHS iSupply expects Samsung 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 20112.

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 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 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. iSupply expects 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 is expected to fall to 5 percent in 2012, down from 11 percent in 2011.

IHS also anticipates that the smartphone penetration rate in 2013 will elevate smartphones into the majority among all phone segments, at 56 percent.

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