For the last 14 years, Finland’s Nokia has been the world’s largest maker of mobile phones, at least in terms of the number of units it has shipped. However, as Nokia continues its years-long struggle to make a dent in the smartphone market and South Korea’s Samsung surges, Samsung overtook Nokia in revenue terms during its most recent financial quarter. Now Reuters reports Samsung CEO Choi Gee-sung told reporters at this week’s CES show in Las Vegas that Samsung expects to overtake Nokia this year in Nokia’s most treasured metric: total number of devices shipped.
Samsung’s chief didn’t offer any estimates for how many phones Samsung expects to ship during 2012. Last month, the Korea Economic Daily (noted by Reuters) claimed Samsung is targeting sales of 374 million units for 2012, citing South Korean industry officials.
Samsung announced at the end of November that it had shipped more than 300 million units worldwide during the year—a new record for Samsung. Samsung has also claimed to be averaging more than 820,000 handset sales a day during 2011—if that rate sustained through the December holiday season, that means the company likely shipped in excess of 325 million phones during the year. With a end-of-year surge, that number could be higher.
Despite a protracted international series of infringement lawsuits with Apple over the design of its Galaxy phones and tablets, Samsung has radically expanded its mobile product lines—and is outselling Apple. During its third quarter, IDC reported Samsung sold 23.6 million smartphones, compared to 17.1 million iPhones sold by Apple.
Some industry watchers say Nokia shouldn’t yet be written off as top handset manufacturer. Although the company has seen its share of the smartphone market decline dramatically since the introduction of the iPhone and subsequent rise of Android, the company is now gearing up to its first aggressive launch of new smartphones based on Microsoft’s Windows Phone platform—including an LTE 4G phone for AT&T—and some early reviews are quite positive. If Nokia and Microsoft can generate significant adoption for Windows Phone, Nokia could see its fortunes turn around in the high-end, high-margin smartphone market.
However, there are other factors at play. An argument could be made that for Windows Phone to make a significant splash in the consumer smartphone arena, both the devices and Windows Phone don’t have to just be good, they have to be phenomenal, generating the same kind of buzz Apple garnered when it introduced the first iPhone. So far, Windows Phone has failed to resonate with consumers, and the platform, for the moment, suffers from a lack of apps and a developer ecosystem. No matter how good Windows Phone might be, existing smartphone users may not be willing to abandon their current platforms—along with their apps and content investments—to make a switch.
Nokia also faces serious competition in what’s become the bread and butter of its phone business: entry-level handsets, often targeted at emerging markets. China’s ZTE has been successfully competing against Nokia with dual-sim devices that enable users to easily hop between networks, using whatever provider is most advantageous to them. And the bulk of Samsung’s phone sales are not smartphones: they’re feature phones, and many of them also target emerging markets.