Nokia Market Share Death in Smartphones

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Nokia Corp. (NYSE: NOK) better have a hit with its upcoming Windows-based Lumia phones if it wants to remain relevant. If Lumia flops, then Nokia is going to live up to the charge that it is a brand that will disappear. A new report from Strategy Analytics shows that industrywide overall smartphone market share rose to 35% of all phones in the third quarter of 2012, but Nokia fell nominally and it fell out of the top three. It gets worse from there.

Apple Inc. (NASDAQ: AAPL) posted an impressive gain to 26.9% market share from 17.1% in the third quarter of 2011, but Samsung's Android phones saw the market share rise to 56.9% from 28.1% a year ago. Samsung shipped 56.9 million units against 26.9 million units from Apple in the quarter.

Nokia's worries are not just growing. They are coming to a critical juncture. Strategy Analytics showed just how badly Nokia continues to be impacted by the growth of Samsung and Apple. It showed that Nokia shipped only 6.3 million smartphones worldwide for a 4% market share, versus the third quarter of 2011 when it shipped out 16.8 million units for a 14% market share. If you do the math, that is almost a 75% haircut in units, while overall industrywide unit shipments in the quarter rose by almost 35% to 161.7 million.

This was said to be the first time that Nokia slipped outside the top three global smartphone rankings. The report warned, "Nokia will need to ramp up sharply its Windows Phone volumes if it wants to recapture a top-three smartphone position in the next one to two quarters."

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What was interesting was how Research-in-Motion Ltd. (NASDAQ: RIMM) was largely ignored in the report. The category for "others" in total market share contracted from 62.3% in Q3 2011 to 48.2% in Q3 2012. Growth of 35% is even considered lukewarm growth. Strategy Analytics said, "The 35 percent growth rate was relatively soft, as a volatile global economy and maturing penetration of smartphones among contract mobile subscribers continued to moderate demand."

Nokia's future has been at stake for some time, but this only confirms many of the worst case scenario fears.

JON C. OGG


Filed under: 24/7 Wall St. Wire, Consumer Electronics, Telecom & Wireless Tagged: AAPL, GOOG, NOK, RIMM
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