Nokia is giving up its cellphone leadership crown. After 14 years in the top spot, Nokia is handing over bragging rights to Samsung. Samsung is now officially the largest handset vendor in the world.
According to IHS iSuppli, Samsung is expected to account for 29 percent of worldwide cellphone shipments, up from 24 percent in 2011, in 2012. Nokia's share will drop to 24 percent, down from 30 percent in 2011.
Nokia's slippage means Samsung climbs from second to first place -- and it's the first time the South Korean electronics titan will occupy the top spot for the year. Nokia will fall to the runner-up spot. This is the first time since 1998 it won't be in peak position for overall cellphone shipments during a full calendar year.
"The competitive reality of the cellphone market in 2012 was 'live by the smartphone; die by the smartphone,' " said Wayne Lam, senior analyst for wireless communications at IHS. "Smartphones represent the fastest-growing segment of the cellphone market -- and will account for nearly half of all wireless handset shipments for all of 2012. Samsung's successes and Nokia's struggles in the cellphone market this year were determined entirely by the two companies' divergent fortunes in the smartphone sector."
The Samsung-Apple Duopoly
Samsung and Apple ended 2011 in a neck-and-neck battle for leadership in the smartphone market, with only 1 percentage point of market share separating them. However, entering the 2012 year, Samsung moved decisively ahead of Apple with a wide range of Android smartphone offerings, according to IHS.
Samsung made significant gains in both the high end as well as the low-cost market with its Galaxy line of smartphones. This diversified market approach helped Samsung address a larger target audience for its phones than Apple's limited premium iPhone line.
Still, IHS says the Samsung and Apple duopoly represents the dominant force in the smartphone market. The two companies account for 49 percent of shipments in 2012, up from 39 percent in 2011. While Nokia and Canada's Research In Motion also held double-digit shares of the market in 2011, Samsung and Apple remain the only two players that will each command a double-digit portion of the smartphone space in 2012.
Smartphones Taking Over
Overall, IHS predicts global smartphone shipments will rise by 35.5 percent this year, while overall cellphone shipments will increase by approximately 1 percent. That puts 2012 smartphone penetration to 47 percent, up from 35 percent in 2011.
With the growth momentum behind smartphones, IHS anticipates that the smartphone penetration rate in 2013 will elevate smartphones into the majority among all phone segments, at 56 percent. This event will mark a significant tipping point in the mobile handset market, as the smartphone takes a dominant position in the industry.