Analysts: Samsung pummels Nokia, takes handset crown in Q1

Samsung Electronics overtook Nokia (NYSE:NOK) as the world's largest handset maker by shipment volumes, according to several analyst reports, dethroning Nokia after the Finnish cell phone giant's 14-year reign at the top.

IHS isuppli handset shipments first quarter 2012

Click here for figures from IHS.

The ranking and changing of the guard is complicated by the fact that Samsung no longer reveals quarterly handset shipments, forcing research firms to extrapolate and estimate how many units Samsung moved in the quarter. However, according to Strategy Analytics, ABI Research and IHS iSuppli, Samsung overtook Nokia. IDC, which normally publishes its own quarterly handset rankings, delayed the release of its report to "get additional insight."

According to Strategy Analytics, global handset shipments grew 3 percent annually to reach 368 million units in the first quarter. Samsung led the way with 93.5 million units, followed by Nokia with 82.7 million and Apple (NASDAQ:AAPL) with 35.1 million. Strategy Analytics did not reveal its estimates for the fourth and fifth handset vendors. 

IHS's report was similar in terms of the overall handset vendor rankings, giving Samsung 92 million units, followed by Nokia and Apple. IHS ranked LG Electronics fourth with 13.7 million unit shipments and Research In Motion (NASDAQ:RIMM) fifth with 11.1 million units. It's important to note that Chinese vendor ZTE, which has been ranked fourth or fifth in recent quarters by many research firms, was not on the lists, though that may change when IDC publishes its report.

The reversal of fortunes for Samsung and Nokia represents the culmination of trends that have been building for years. Nokia's smartphone strategy sputtered for years after Apple released the iPhone in 2007, and Nokia has only recently shifted course and started selling its Lumia smartphones running Microsoft's (NASDAQ:MSFT) Windows Phone platform. However, sales of those devices, which began in November, have yet to take off and Nokia's Symbian sales have been falling faster than expected.

Meanwhile, Samsung has capitalized first by claiming a niche first in low-end phones and, over the past two to three years, higher-end smartphones. The company's success in smartphones has largely been based on its embrace of Google's (NASDAQ:GOOG) Android platform to power its flagship Galaxy line, and to a lesser extent devices running its homegrown bada platform and Windows Phone.

"Last year Samsung became No. 1 in Europe while Nokia retained the No. 1 position in most emerging markets," Strategy Analytics analyst Tom Kang told Bloomberg. "In the first quarter, we expect Samsung took a lot of market share from Nokia in Asia. China and India were the two biggest markets where Samsung gained."

In smartphone shipments, analysts firms diverged on how Samsung did. According to Strategy Analytics, Samsung had 44.5 million smartphone shipments in the quarter, up from 12.6 million smartphone shipments in the year-ago quarter, and easily besting Apple's 35.1 million iPhone shipments and Nokia's 11.9 million smartphone shipments. However, IHS said that Apple actually beat Samsung, and that Samsung only had 32 million smartphone shipments.

This discrepancy appears to stem from something Samsung said during the release of results in the third quarter of 2011, according to Ovum analyst Jan Dawson. At the time, Samsung said smartphone sales were up more than 40 percent quarter-over-quarter and 300 percent year-over-year. The issue is whether Samsung's third-quarter smartphone shipments were actually 400 percent or 300 percent. The difference was then extrapolated for the fourth quarter.

"Basically, all the analysts out there have taken one of these two routes, and are either moving forward on a solid foundation or compounding the original error every quarter, hence the increasing discrepancy," Dawson wrote in a Google+ post. "Strategy Analytics is assuming the 400% number is correct, and arrives at a 44.5 million number for Q1 2012, while iSuppli and others are assuming the 300% is correct, and arrive at a 32 million number for Q1."

For more:
- see this Strategy Analytics release
- see this separate Strategy Analytics release
- see this IHS release
- see this ABI release
- see this Bloomberg article
- see this Barron's blog post
- see this Jan Dawson post

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