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Analyst Q&A: How Did Samsung Gain Top Mobile Market Share?

Analyst Q&A: How Did Samsung Gain Top Mobile Market Share?
April 27, 2012 1:46PM

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With winning devices such as the Galaxy Note, Google Nexus, Droid Charge and Galaxy S II, Samsung smartphone shipments rose by a whopping 253 percent to 44.5 million, while Samsung handset unit shipments totaled 93 million, a 36 percent spike for Samsung from the first quarter of last year.

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First-quarter results show that Samsung has become the king of both the smartphone and handset market globally, taking the top handset slot away from Nokia after a 14-year reign. In the smartphone market, Samsung surpassed Apple with a 31 percent market share compared with the iPhone's 24 percent market share.

Overall, the handset market grew by a modest 3 percent while the smartphone market grew by a more substantial 41 percent compared with the first quarter of 2011.

With winning devices such as the Galaxy Note, Google Nexus, Droid Charge and Galaxy S II, Samsung smartphone shipments rose by a whopping 253 percent to 44.5 million, while handset unit shipments totaled 93 million, a 36 percent spike from the first quarter of last year. Nokia's handset market share fell annually from 30.4 percent to 22.5 percent while its smartphone market share plummeted from 23.5 percent to 8.25 percent. The results leave Apple and Samsung together controlling more than half the smartphone market.

We spoke to Strategy Analytics Associate Director Alex Spektor about these findings, which are based on polls of vendors.

Q: Were you surprised by the growth of Samsung's market share?

A: Just five years ago Samsung took the No. 2 spot from Motorola, and at the time it seemed like it was impossible for anyone to overtake Nokia. But times have really changed. The smartphone market took off and Nokia was not able to react to the market quickly enough.

Q: How did this happen to Nokia?

A: The historic leaders in the smartphone market were Nokia and BlackBerry. They already had a strategy and market position and a product portfolio. When you already have something in the market you are playing defensive games as opposed to Samsung, who really went on the offensive for the past few years, which enabled them to move with the trend.

Q: How much has Samsung's embrace of the Android platform contributed to this success?

A: Android gave Samsung a quick opportunity to get as close to functionality of the iPhone as possible. The application ecosystem grew very quickly, the user interface was strong and it provided a good browsing experience and a good touch experience which really enabled Samsung to offer a strong alternative to the iPhone.

Q: Samsung also has Windows Phone devices. Has that affected their shipment volume?

A: Samsung has limited volumes from Windows and, outside of the U.S., some volume from its own platform, Bada, but it remains to be seen whether that platform makes its way to the American market. For now, Samsung is leveraging Android to the extent it can. (continued...)

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