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It’s war of the smartphones

Samsung vs Nokia vs Apple: who will be number one in the next five years? Rajiv Makhni writes.

brunch Updated: May 05, 2012 19:37 IST
Rajiv Makhni
Rajiv Makhni
Hindustan Times

Blaring Big Headline Strategy Analytics announces: Samsung shipped 44.5 million smartphones and overtook Apple (35.06 million units) to become the world’s number one smartphone vendor.

Really Loud Headline IIHS declares: Samsung sold 32 million units of smartphones while Apple sold 35.06 million units. Thus Samsung remained in the second place in the smartphone segment, behind Apple Inc.

The only way is up: The next version of the Note and more aggression with upcoming Windows Phone 8 phones will give Samsung some serious numbers

Incredibly Intense Headline: All analysts declare: Samsung Electronics Co Ltd in the first quarter overtook Nokia Corp to become the world’s largest cellphone brand for the first time. Samsung sold 92 million units to Nokia’s 83 million.

The three headlines came within days of each other, had two major contradictions and are indicative of the amazing number game that is now played out every quarter. At stake are two crowns: who is the King of the Smartphone Kingdom across the world and who is the Master of the Universe in total mobile phone sales? And within these two battles lies a tale of misdirection and deceit.

A New Cell King?
For 14 years, Nokia has reigned supreme. It has been the first cellphone for most people across the world; it is synonymous with the word ‘mobile phone’; it has got more brand recall than almost anything else on earth (analyst Tomi Ahonen calls it “the brand most widely spread on the planet”); more people use a Nokia phone than drink Coca Cola, wear Levi’s jeans, Nike running shoes or write with a Bic pen. In a nutshell, Nokia was the undisputed monarch and king of the mobile phone. Was! And now Samsung has toppled it and Nokia is dead! And in that last statement lies the foolishness of people jumping not just a gun but an entire platoon of tanks. How can a company that sells 83 million mobile phones be dead?

The misdiagnosed demise of Nokia is based on the fact that its Windows Phone smartphone sales have not set the world on fire. While it is true that mobile phone growth currently is predominantly fuelled by smartphone sales, the feature phone market isn’t dead or buried! In emerging markets as well as countries like India, feature phones will still continue to dominate for the next five years. Enough time for Nokia and Microsoft to plan for the future. Nokia Windows smartphones sales reflect the typical sluggishness of a huge transition and it is way too early to knock them off the smartphone market completely.

Still going strong: It is way too early to knock Nokia off the smartphone market


My Blaring Big Prediction:

Nokia will continue to be number two for the next two years. Samsung may forge even further ahead. Apple cannot touch this crown unless it comes up with at least three other iPhone variants including an economy iPhone. If the Microsoft-Nokia gamble pays off in two years, you may still see Nokia reclaim what it has been for 14 years.

The Smarter Crown
This is the fun story. Samsung is the new smartphone king and most people tend to agree with that analysis. It has sold 9 million more smartphones than Apple, and has so many variants within that category (dozens within Android, also a player in Windows Phone, plus has its own OS, Bada) that it positively makes Apple look silly with its ‘only iPhone’ strategy. Samsung is aggressive – it’s building a great worldwide distribution network and manufactures most of its components in-house. Case closed, right? Wrong! While there is no disputing the fact that Samsung is on a roll, there are still grey areas that lie within. For starters, Samsung doesn’t declare smartphone sales numbers – an unfortunate decision that came out of a controversy over the number of phones it shipped versus number of phones it sold. If Samsung wants to be a clean and clear number one, it also needs to report things more clearly. Second, the smartphone arena is no longer only about the device itself but the entire ecosystem: apps that consumers bought, accessories available for that company’s products, music downloaded, videos and movies bought, eBooks sold to users of that device. And in this arena, there is only one undisputed king – Apple.

My Really Loud

Not big enough: The last two versions of the iPhone were just very minor upgrades to the iPhone 3GS

Samsung will leap further ahead. The new Samsung Galaxy S phones revealed in London, the next version of the Note and more aggression with the upcoming Windows Phone 8 phones will give it some very serious numbers. But there are four bludgeoning hits coming in the future. A huge comeback from from BlackBerry with its OS 10, Nokia and Microsoft hitting incredibly hard in the next one year, LG unleashing some great phones and Apple with its iPhone 5 (a real new iPhone, since the last two were just very minor upgrades to the iPhone 3GS) and an economy iPhone (may well be the iPhone 4S at a unlocked price of $199). King Samsung has its fight cut out.

This is a number game that matters as it’s a game involving billions of dollars and the very survival of many companies. While the roadmap for the next two years seems quite set in stone, who will be number one in five years? It could be any of the big three or a complete unknown. A new king may already have been born – we just don’t know it yet!

From HT Brunch, May 6

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First Published: May 05, 2012 15:01 IST

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