UPDATE 2-Samsung, Apple to end Nokia's smartphone reign

Mon Jun 13, 2011 1:54pm EDT

Related Topics

* Nokia lead market since Communicator launch in Aug '96

* Nomura sees Samsung beating Nokia in Q2, Apple in Q3

* Gartner, Canalys see change later this yr

* In Britain Nokia share drops to one-third of yr-ago

(Adds more analyst quotes, updates shares)

By Tarmo Virki, European Technology Correspondent

HELSINKI, June 13 (Reuters) - Samsung Electronics Co Ltd (005930.KS) will become the world's largest smartphone maker this quarter, overtaking struggling Nokia Oyj (NOK1V.HE) which has lead the market since 1996, Nomura said on Monday.

In the next quarter Nomura sees Apple Inc (AAPL.O) also overtaking Nokia, pushing the Finnish company to No. 3 in the rankings.

"Nokia looks set to relinquish its smartphone crown to Samsung and Apple," Nomura analysts said in a research note. "Further emphasising the shift in power to Asia is our forecast for HTC (2498.TW) to almost match Nokia during 2012."

Research firms Gartner and Canalys both said they saw Nokia -- which created the smartphone market with its 1996 launch of the Communicator model -- losing smartphone volume leadership later this year.

"If Nokia's new phones are not well received in the third quarter and with the Galaxy S2 ramping up, Samsung might overtake them and become the smartphone leader in Q3," said Gartner analyst Carolina Milanesi.

On Monday Kantar Worldpanel ComTech's survey showed Nokia's share of the British smartphone market -- seen as a key indicator for trends in Europe -- had dropped to 10.6 percent in 12-weeks to mid-May from 31 percent in the same period a year earlier. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ BREAKINGVIEWS-M&A hopes no reason

to buy Nokia shares [ID:nLDE7590IY] POLL-Nokia forecasts slashed: Q2, Q3 in red [ID:nLDE75828V] DEALTALK-Many rumours, no suitors for Nokia [ID:nLDE757116] Even deep value investors see little in Nokia [ID:nN09237724] Nokia CTO on leave amid strategy disarray [ID:nLDE75808C] Nokia drops targets, shares slump [ID:nLDE74U1CO] FACTBOX: Handset vendors [ID:nLDE7410N0] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Nokia has lost initiative in the smartphone market to Apple's iPhone and Google Inc's (GOOG.O) Android devices, and at the lower end to more nimble Asian rivals.

"There is certainly a very close three-way battle going on for top spot in global smartphone volumes between Nokia, Apple and Samsung during the second quarter," said Neil Mawston, analyst at Strategy Analytics.

"With Symbian demand crashing, there is growing opportunity for Samsung or Apple to grab the lead," said Mawston, but said he still expects Nokia to stay ahead in the ongoing quarter.

Overall, Nokia still makes more cellphones than Samsung due to its strong position in basic cellphones and its wider distribution network in emerging countries.

The company is switching to Microsoft Corp's (MSFT.O) software from its own Symbian platform as part of an overhaul of its phone business set out in February by new Chief Executive Stephen Elop. [ID:nLDE71A0DG]

On May 31 Nokia abandoned hope of meeting key targets just weeks after setting them, raising questions over whether its new boss can deliver on the turnaround he promised. [ID:nLDE74U1CO]

Shares in Nokia closed 0.1 percent lower in Helsinki, at 4.33 euros, in line with a slightly softer technology sector. (Editing by David Holmes and Jon Loades-Carter)

FILED UNDER: