Samsung handset market share drops to 20%

The pressure from competitors put a slight dent in Samsung's first quarter cell phone market share. The company reported that it sold 64.3 million devices in the first quarter, an increase of 40 percent year over year. However, Samsung's mobile market share declined from 21 percent to 20 percent primarily because of increased competition from Research In Motion (NASDAQ: RIMM) and Apple (NASDAQ: AAPL). Samsung predicted demand for its devices will increase in second quarter as the global economy recovers.

samsung q1Samsung's cell phone division had an operating profit margin of 12 percent, down from 12.7 percent a year ago but up from 8.3 percent in the fourth quarter. The company's average selling price of its devices was $119, up slightly from $116 in fourth quarter but down year over year.

According to Technology Business Research, Samsung's decision to increase its proportion of smartphones has helped insulate the company from competition in the low-end emerging market segment. Nokia, for example, has felt increasing competition from Chinese vendors such as Huawei and ZTE.

Research firm IDC said Samsung has managed to hold steady as the world's No. 2 vendor for 12 consecutive quarters. The firm said Samsung's efforts to bring high-end devices, including touchscreen phones and converged mobile devices, helped push its ASPs higher.

Samsung executives said one-third of smartphones from the company this year will be based upon Samsung's operating system bada, while fully half of its smartphones will use Google's Android operating system.

For more:
- see this WSJ article (sub. req.)
- see this Reuters report
- see this IDC release
- see these key stats from Samsung's Q1
- see this FierceWireless Q1 earnings page
- see these global handset market stats

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