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Samsung Tops, Nokia slips to Seventh in Smartphone Market


20 Sep 2012
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Nokia Slips to Seventh in Smartphone Market

Nokia Corp. sank to seventh place in the booming global smartphone market in the third quarter, as Apple Inc. and Samsung Electronics Co. maintained their hold on a segment once dominated by the Finnish company.

Nokia accounted for 7.2 million, or 4.3%, of the 169.2 million smartphones sold world-wide in the latest quarter, taking the company down from third place in the prior three-month period, research firm Gartner Inc. said Wednesday.

The handset maker's chief executive, Stephen Elop, said that while he is pleased with the sales progress of Nokia's recently launched Lumia smartphones, he realizes the company still needs to make up significant ground in order to more competently take on bigger rivals such as Apple, Samsung and Google Inc.

Nokia introduced the new products—the Lumia 920 flagship smartphone and its more affordable Lumia 820 sibling—in September and started selling the devices last week. "We have just gotten the first four days of sales results and we are very pleased with what we see there," Mr. Elop said at an investor conference in Barcelona Wednesday.

"We have a lot of work ahead," he added. "We know that we are bringing a beautiful product to market. The Lumia 920 has gotten fantastic reviews, but now we have to translate that into sales results."

Nokia's decline from its third-place ranking last quarter comes even as global sales of smartphones jumped 47% in the third quarter, Gartner said. Smartphones now account for about 40% of the total mobile-phone industry.

IPhone maker Apple and South Korea's Samsung dominated the smartphone segment with a combined market share of 46.5% in the third quarter, Gartner said. HTC Corp. of Taiwan and BlackBerry maker Research In Motion Ltd. of Canada were among the companies that overtook Nokia.

Nokia, once at the top of the smartphone and overall mobile-phone market, has failed to keep up with rivals after betting on Microsoft Corp.'s platform for its high-end smartphones, while using Symbian for more basic devices. Microsoft and Symbian together accounted for 5% of the operating systems used in smartphones in the third quarter, Gartner said.

Google's open Android platform remained the dominant operating system for smartphones, as its market share rose to 72.4% from 52.5% a year earlier, Gartner said.

Third-quarter world-wide mobile-phone sales to end-users fell 3.1% year-to-year to about 428 million units, Gartner said. Within this shrinking market, Nokia's share slipped to 19.2% from 23.9%, while Samsung took the top spot with 22.9% of all handsets sold world-wide, up from 18.7% a year earlier, thanks largely to demand for its Galaxy smartphones, Gartner said.

Apple was the third-biggest vendor in the wider mobile-device market, as its market share increased to 5.5% from 3.9%, Gartner added.

Nokia is counting heavily on its new Lumia smartphone line, powered by Microsoft's Windows software, to regain lost ground. In the U.S., AT&T Inc. said this month it would sell Nokia's Lumia 920 for $99.99 on a two-year contract, undercutting rival smartphones such as Apple's new iPhone 5 and Samsung's Galaxy SIII.

"The arrival of the new Lumia devices on Windows 8 should help to halt the decline in share in the fourth quarter of 2012," Gartner said, but added that Nokia's position is unlikely to improve significantly until 2013.

Nokia, along with Microsoft and its operator partners, are spending more to market the latest launch compared with when the company started selling the Lumia 900 in March, Mr. Elop said.

While Nokia has packed its new Lumia with some unique hardware features, such as wireless charging capability and a camera with optical image stabilization, the chief executive said the company faces a challange in being able to show off these features to consumers.

"Our innovation doesn't matter at all, if these features aren't presented well in the retail environment," Mr. Elop said. "When you walk into a store, we will need a trained sales person to say 'Hand me your iPhone or your Galaxy SIII and let's take some pictures side by side.' If that process happens, we will do very well."

However, Nokia doesn't just face competition from the iPhone and devices running the Android operating system. A number of device makers, including Samsung, HTC and China's s Huawei Technologies Co. have introduced or are developing Windows-based smartphones. Additionally, Microsoft—Nokia's key partner—is working with component suppliers in Asia to test its own smartphone design, people familiar with the situation said earlier this month.

Mr. Elop said he has encouraged "HTC, Samsung or whoever," to participate in the Windows Phone ecosystem. "The primary competition I'm worried about is not some other Windows Phone product. I'm focused on Android and iPhone."

The CEO added that Nokia's relationship with Microsoft remains tight and collaborative, and that the two companies have teams that work together on a daily basis. "We have a unique relationship with Microsoft, we are their lead developer," he said. "Someone like HTC comes in later in the process and is not sitting in the priority meetings we have with Microsoft."
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