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BW Businessworld

Nokia Slips From 1 To 3 In Smartphone Sales

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Nokia has dominated the smartphone market ever since its 1996 launch of the Communicator model, but competition from its two nearest rivals and a slump in its own sales sent it straight from first to third place in the three months to June as growth in the sector starts to slow.

Apple sold a record 20.3 million iPhones in the quarter despite the fact that its iPhone 4 model is now more than a year old. Usually success of smartphone models does not last so long.

Apple unveiled its sales last week, but on Friday analysts also estimated Samsung sold 19 million smartphones in the quarter, well ahead of Nokia's 16.7 million as it was able to benefit from booming demand with smartphones using Google's Android software.

"Samsung's Galaxy portfolio has proven popular, especially the high-tier S2 Android model," said Neil Mawston, analyst at Strategy Analytics."

Strategy Analytics estimated smartphone market volume grew 76 per cent from a year ago in the second quarter. ABI Research was somewhat more cautious estimating market grew 62 per cent.

Slowdown Worries
Growth on the overall cellphone market slowed too in the April-June period, as sales of basic phone models dropped for the first time in seven quarters due to consumers reining in spending, research firm IDC said on Friday.

IDC said strong smartphone demand boosted the market to still grow 11.3 per cent from a year ago to 365.4 million phones, but this was a clear slowdown from the 16.8 per cent growth seen in the previous quarter.

Strategy Analytics estimated the total market at 361 million cellphones in the quarter.

In a Reuters poll, 29 analysts' average forecast for the total market stood at 374 million phones.

IDC said sales of simpler so-called feature phones fell 4 per cent from a year ago due to conservative spending and continued shift to smartphones, most visible in developed markets, such as the United States, Japan and Western Europe.

The shrinking feature phone market is having the greatest impact on some of the world's largest suppliers of mobile phones," analyst Kevin Restivo said in a statement.

Stalwarts such as Nokia are losing share in the feature phone category to low-cost suppliers such as Micromax, TCL-Alcatel and Huawei."

Struggling Nokia, still the world's largest phone maker by volume, saw its phone sales shrinking 20 per cent from a year ago. This helped Samsung to close the gap to the Finnish firm in the overall cellphone market to the lowest level ever.

Some analysts already forecast for Samsung to become the world's largest cellphone vendor next year.