Samsung may overtake Nokia for cellphone crown

HELSINKI Sun Apr 15, 2012 10:58am IST

An employee takes a Nokia mobile phone at a shop in downtown Milan April 12, 2012. REUTERS/Alessandro Garofalo

An employee takes a Nokia mobile phone at a shop in downtown Milan April 12, 2012.

Credit: Reuters/Alessandro Garofalo

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HELSINKI (Reuters) - Korea's Samsung Electronics Co Ltd(005930.KS) ended Nokia Oyj's(NOK1V.HE) 14-year leadership of the global cellphone market in the first quarter of the year, outselling the struggling Finnish handset maker for the first time ever, according to a Reuters poll of analysts.

The poll showed analysts on average expect Samsung to have sold 88 million cellphones in January through March, surpassing the 83 million which Nokia sold in the quarter.

Nokia had announced the sales total on Wednesday when it warned of losses from the phones business in the first and second quarter. Samsung is due to release quarterly numbers on April 27.

Nokia has struggled for several years in the smartphone race, but its dominance in the lower end of the market has allowed it to keep its rank as the world's largest cellphone maker by volume.

The fall of the Finnish firm has been rapid over the last few months as in a similar poll in January it was still expected to stay far ahead of Samsung.

"After 14 years as the largest global mobile phone maker, getting knocked off the top spot will come as a bitter blow to Nokia," said Ben Wood, head of research at CCS Insight, who has followed the industry since the 1990s.

"In contrast it will be greeted with euphoria by Samsung - they'll be dancing from the boardroom to the factory floor," Wood said.

Nokia became the world's largest cellphone maker 1998 when it overtook Motorola (MMI.N) - at a time when Samsung had just entered the industry - and it controlled around 40 percent of the market for years before Apple Inc's (AAPL.O) iPhone was unveiled in 2007, launching the smartphone boom.

Some analysts said losing the top spot would be a blow to Nokia, but would have little impact on its attempt to turn around its fortunes.

"I think it will hurt them from a PR perspective, but in reality it does not change anything: at the end of the day the problems are the same if they remain the No 1 or become the No 2," said analyst Carolina Milanesi at Gartner.

(Editing by David Holmes)

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