Samsung takes the lead as world’s top phone maker

Samsung Electronics overtook Nokia in the first quarter of this year to become the world’s largest cellphone brand for the first time. However, Samsung remained in second place in the smartphone segment of the cellphone market, behind Apple. 

Market statistics by iSuppli, part of the HIS group, show the South Korean electronics giant shipped 92 million cellphones worldwide in the first quarter, compared to 83 million for longtime market leader Nokia. While Samsung’s shipments declined by 13% compared to the fourth quarter of 2011, Nokia’s dropped by 27%. This allowed Samsung to rise one position to take first place.

In the smartphone segment of the cellphone market, Apple shipped 35 million units in the first quarter. This compares to 32 million for Samsung. Apple remained in the same position in smartphones that it captured in the fourth quarter of 2011 - at No. 1 - while Samsung held on to second place.

Apple’s smartphone shipments declined 5%, compared to 11% for Samsung. Sequential declines in the shipments of smartphones as well as cellphones reflect normal seasonal patterns in which sales decrease following the peak holiday period in the fourth quarter, says the report.

 “With cellphones now accounting for more than 40% of Samsung’s overall revenue, it’s clear that the company’s continued investments in smartphone hardware and software R&D are paying off,” said Wayne Lam, senior analyst, wireless communications at IHS. “The company is not only cashing in on the market’s shift to smartphones, but is also succeeding in other cellphone product categories, allowing it to capture the overall market lead. What makes Samsung’s performance even more impressive is that the company’s latest Galaxy S III handset has yet to be launched, with shipments set to start in May. This indicates Samsung is likely to make further progress in market share in 2012.”

With Samsung taking the leadership position, it will mark the first time since 1998 that Nokia has not been the No. 1 brand in the global cellphone market.

“Samsung’s surpassing of Nokia for cellphone market leadership represents not only a changing of the guard among handset brands but also a fundamental shift in the structure of the wireless market,” said Ian Fogg, senior principal analyst, mobile for IHS.

“Cellphone market growth is now being generated exclusively by the smartphone segment, and not by the feature phones, entry-level cellphones and ultra-low-cost handsets (ULCH) that had fueled the industry’s expansion over the previous decade. Samsung has successfully ridden the wave of smartphone adoption to attain market leadership. Meanwhile, Nokia is in the midst of transitioning its smartphone strategy, resulting in declining shipments for the company.”

Smartphones are the only segment of the global cellphone business expected to expand in 2012. Global smartphone shipments are set to rise by 35% this year, while those for feature phones, entry-level phones and ULCHs will all decline.

As a result, the smartphone segment will be single-handedly responsible for the overall cellphone business expansion of 7.4% in 2012. Next year, smartphone shipments will rise to account for more than half of all cellphones for the first time, at 52%, up from 43.5% in 2012.

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