Nokia overthroned by Samsung after 14 years!

 

Two articles were published today that everyone should read. The first, from Reuters, says that analysts have come to the conclusion that Nokia is no longer the leader of the mobile phone market in terms of volume. Yesterday the Finnish handset maker issued a press release saying they shipped 12 million smartphones and 71 feature phones in Q1 2012; that’s 83 million total. Samsung on the other hand, while they haven’t announced their numbers yet, is widely expected to beat that 83 million figure by at least a few million. The second article, from Horace Dediu at Asymco, explains how Samsung actually overtook Nokia.

The answer might surprise you, but it’s fairly obvious once you stop and think about it: smartphones. Whereas Nokia’s ratio of smartphones sold compared to feature phones sold peaked in Q3 2010 and then started falling slowly, all of Samsung’s growth started happening during the quarter when they began shipping smartphones powered by Google’s Android operating system. In other words, Nokia might have pioneered the smartphone space, but it was Samsung who dominated it in terms of volume. Apple dominates the industry in terms of profits, but that’s another story altogether.

The bigger question here is how is Nokia going to get themselves out of the situation they’re in right now? Their stock fell about 15% yesterday, and today it’s looking like it’ll fall another 5%. Symbian phones are outselling Windows Phones at a ratio of 5 to 1. The feature phone division is being cannibalized by low end Chinese smartphones, and at some point it’s not even going to make sense to make devices that cost under $150. We’re all waiting to see what Windows Phone 8 brings to the table, but to be perfectly honest we think that three things are going to happen to Nokia over the next 12 months.
First, Nokia is going to sell a lot of their patents to stay afloat. Microsoft will likely be buying them. Second, Nokia will sell their mapping unit, the one that they paid $8.1 billion for back in October 2007. And third, Nokia will get rid of at least another 10% of their workforce, so roughly 5,500 jobs

Via intomobile.com.