South Korea's Samsung Electronics Co. (005930.SE), the world's second-largest cellphone maker by revenue, is to assume global smartphone leadership in unit terms, ending rival Nokia Corp.'s (NOK) 14 years of market leadership, Nomura said in a forecast Monday.
According to Nomura's estimate, Samsung will be the global smartphone leader from the second quarter this year. Nokia, that has led the smartphone market since it launched its first Communicator handset in 1996, looks set to fall to third place, behind Samsung and Apple Inc. (AAPL), the bank said.
Samsung's mobile division success is highlighted by its latest smartphone flagship, the Galaxy S2, which runs Google Inc.'s (GOOG) Android operating system. More than 1 million units of the Galaxy S2 handset had been activated on the South Korean market a month after it was released, a Samsung spokesperson told Dow Jones Newswires.
Meanwhile, Nokia is still struggling to compete in the high-end handset market. Its failure to keep pace with the fast-moving market saw it abandon its Symbian platform for smartphones in February in favor of a partnership with Microsoft Corp. (MSFT) and its Windows Phone software as it strived to regain lost market share.
Despite saying that market shares in the mobile phone business have swung greatly in prior years, Nomura added that at the moment it can't see any evidence of a product-led turnaround for the troubled Finnish handset maker.
"We forecast that Nokia will continue to weaken relative to [Samsung and Apple] and could even be overtaken by HTC Corp. (2498.TW) by late 2012," the bank said.
Speaking at the Open Mobile Summit in London last week Nokia's Chief Executive Stephen Elop said that although Nokia had moved to Windows Phone late in its development, the first Nokia phone to run Windows Phone, set to launch in the fourth quarter this year, would have software features unique to Nokia. He emphasized that the industry has changed and the key area of competition is no longer just handsets.
"Fundamentally, our assessment of the industry is [that] it has shifted from a battle of devices to a war of ecosystems," he said.
Elop added that Nokia's biggest competitors were therefore Google's Android and Apple, rather than other handset manufacturers.
Nomura raised its full year smartphone unit sales forecast in 2011 by over 6%, to 478 million sold units from its previous estimate of 452 million units. It said Nokia's product weakness has allowed vendors of Android-based smartphones in particular to gain share.