January 10, 2012 / 1:56 PM / 8 years ago

Samsung confident of outselling Nokia in 2012

LAS VEGAS/HELSINKI (Reuters) - Samsung Electronics Co (005930.KS) said it is confident it will become the world’s largest cellphone maker in 2012, ending Nokia’s NOK1V.HE 14-year reign in the mobile handset market.

A worker on a lift aligns TVs and mirrors preparing the Samsung booth at the Consumer Electronics Show opening in Las Vegas January 9, 2012. REUTERS/Rick Wilking

Samsung became the world’s No 1 smartphone maker in the third quarter of 2011 and is quickly building on its supremacy with sleek designs and a rich product line-up.

By contrast the latest models from the likes of HTC (2498.TW), Nokia and Research In Motion RIM.TO, maker of the BlackBerry, are struggling to lure consumers.

Samsung Chief Executive Choi Gee-sung told reporters in Las Vegas late on Monday the company overtook Nokia in revenue terms in its latest reported quarter and was confident of topping the Finnish group in shipments this year.

“It really highlights the level to which Nokia has struggled to retain momentum through 2011,” said Tim Shepherd, analyst at technology research firm Canalys.

“Samsung is really charging forward at the moment. It is delivering really compelling products to the market and consumers are responding,” he said.


Losing the top spot on the market would mean another defeat for Finland’s Nokia, which rose to the top of cellphone industry in 1998 when it overtook Motorola in phone sales and was the driver for the Nordic economy for a decade.

Nokia’s dominant position began to weaken in 2007 when Apple (AAPL.O) entered the industry and grew from nothing to the world’s largest smartphone maker in four years.

In recent years Nokia’s market share and profits have dropped, hitting its shares which are down seven-fold from its 2007 high of 28.13 euros and which have halved since last year’s shift Microsoft (MSFT.O) software in its smartphones.

Samsung’s bullish forecast is in line with some analysts, including Royal Bank of Scotland, betting Samsung would build on its momentum to overtake Nokia in 2012, but on average analysts have expected Nokia to keep its lead on the market.

According to the latest polls by Reuters, Nokia was expected to sell 418 million phones in 2011, versus Samsung’s 320 million. The gap would narrow this year to 388 million versus 359 million.

“Samsung is getting closer to Nokia very quickly. Their smartphones strategy has proven right and on feature phones they are growing fast in emerging markets too,” said IDC analyst Francisco Jeronimo.

“Samsung became a recognized brand and their successful smartphones are helping their feature phones business in regions where smartphones are still too expensive,” he said.


The South Korean firm — the world’s biggest technology company by revenue — said in early December its 2011 handset sales reached 300 million handsets for the first time, mainly led by a near four-fold jump in smartphone sales.

“Considering how strong Nokia still is in the emerging markets, Samsung’s expectation seems to imply that Nokia will miserably fail in mature markets,” said Gartner analyst Carolina Milanesi.

Analysts expect cellphone market growth to slow in 2012, with weak demand seen in Western Europe against stronger demand for emerging markets, which have historically been Nokia’s stronghold.

“I think it will be hard for Samsung to beat Nokia without more aggressively targeting emerging markets,” Milanesi said.

Choi also said Samsung was likely to meet its 2015 sales target ahead of schedule and plans to increase investment this year.

“With the current sales growth rate, we are likely to... achieve the 2015 sales target of $200 billion earlier,” Choi told reporters.

Samsung last week reported a 6.5 percent rise in 2011 revenue to 164.7 trillion won ($141.54 billion).

($1 = 1163.6500 Korean won)

Editing by Jacqueline Wong and David Cowell

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