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Announcing the New King of Mobile: Samsung

 

Samsung has overthrown Nokia ending the 14 year reign. As we now look at the aggregated Q1 handset and smartphone shipments we confidently announce that Samsung has rose to the top in both categories. Last quarter Samsung had outstripped Nokia by almost double score in smartphones but lost to Apple. This time Samsung wins a double as it reaches 25% market share in handsets and 32% market share in smartphones.

 

Nokia’s market share in handsets peaked in 2008 and its share in smartphones peaked in 2006. So we view Nokia’s prime to be the era between 2006 and 2008. Ever since Motorola failed to dislodge Nokia with the RAZR in 2004 and 2005, Nokia was deemed to be invincible. The introduction of the iPhone was the beginning of a new era and Nokia failed to embrace this industry trend. But observing the market long enough, we also see that Nokia was fairly distracted during the early years of the smartphone revolution. Nokia had done several bold moves to transform the company into a service company. It came to the conclusion that hardware was doomed to fail and the only Greenfield was content, applications and services. It acquired Loudeye, Navteq, Intellisync, Oz communications etc. Software and Services became a division as important and heavily supported as the main Device division. This of course became a failed effort.

 

So why did Nokia end up wasting so much time and resources for something in vain? Boredom, I think it is. Nokia had faced no real competition for almost 3 years. Second in place Samsung was always trailing by less than half the market share of Nokia for nearly a decade. The King naturally lost interest in the game. Samsung on the other hand always faced cutthroat competition from domestic rival LG and then smartphone rival Apple. This keen sense of survival has lead Samsung to overachieve its goals and rise as the victor. But it looks like Samsung is also in awe as it didn’t expect the collapse of competitors like Nokia, LG, RIM and HTC all at once. As they say luck shines on the brave and strong and it looks like she has smiled at Samsung to give it an extra early boost in market share this time.

Counterpoint research is a young and fast growing research firm covering analysis of the tech industry. Coverage areas are connected devices, digital consumer goods, software & applications and other adjacent topics. We provide syndicated research reports as well as tailored. Our seminars and workshops for companies and institutions are popular and available on demand. Consulting and customized work on the above topics is provided for high precision projects.

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