Samsung Probably Overtook Nokia in Phone Handset Sales

Samsung Electronics Co. (005930), Asia’s largest electronics maker, probably overtook Nokia Oyj (NOK1V) as the top handset seller for the first time, helped by the popularity of the Galaxy smartphones, according to analyst estimates.

The South Korean company may have shipped about 92 million mobile phones, including basic types, in the first quarter, according to the median of five estimates in a Bloomberg News survey. Nokia sold 83 million units, with 12 million smartphones and 71 million low-end models, during the three-month period, the Espoo, Finland-based company said yesterday.

The gap could end Nokia’s 14-year reign in the global mobile-phone market. While Samsung has been benefitting from the popularity of Galaxy phones running Google Inc. (GOOG)’s Android operating system, Nokia has been losing market share as consumers choose the iPhone from Apple Inc. (AAPL) and Android devices over products using its Symbian software.

“Samsung is displacing Nokia fast,” Lee Sun Tae, a Seoul- based analyst at NH Investment & Securities Co., said by phone. “Nokia, with no competitiveness in smartphones, will keep losing ground.”

James Chung, a Seoul-based spokesman for Samsung, declined to comment on the numbers, citing company policy not to disclose handset shipment figures. Doug Dawson, a spokesman for Nokia, also declined to comment on the analysts’ estimates.

Samsung Profit

Samsung, based in Suwon, South Korea, last week reported first-quarter operating profit that exceeded estimates.

Nokia is allying with Microsoft Corp. (MSFT) to adopt the U.S. company’s mobile-phone operating system, instead of joining Samsung, HTC Corp. (2498) and other companies in using Android, to recover market share.

Nokia reported an operating loss for its mobile-phone division yesterday, while forecasting earnings won’t recover this quarter as emerging market handset sales slumped and margins on smartphones shrank.

Nokia declined as much as 7.8 percent to 3.01 euros in Helsinki, the lowest intraday price since April 1997, and traded down 7.5 percent as of 12:33 p.m. local time. The stock slumped 14 percent yesterday.

“Nokia is slower than expected in responding to the smartphone market, whereas Samsung is doing better with models like the Galaxy Note,” said Kim Young Chan, a Seoul-based analyst at Shinhan Investment Corp. “The net result is Samsung edging out Nokia faster than expected.”

Samsung fell 2.9 percent to 1,273,000 won at the close of trading in Seoul. The stock has climbed 20 percent this year, outperforming the benchmark Kospi index’s 8.8 percent advance. Nokia has declined 20 percent in the period.

Galaxy Phones

Kim said he had forecast Samsung’s overall handset shipments would surpass Nokia’s from the second half this year.

Samsung probably sold 44 million smartphones in the first quarter, more than tripling from a year earlier, Matt Evans, a Seoul-based analyst at CLSA Asia-Pacific Markets, said in an April 2 report.

Samsung, which plans to introduce a successor to the Galaxy S II by June, is still facing competition from Apple.

“The S III is going to come just before the iPhone 5 launches,” Carolina Milanesi, an analyst at Gartner Inc. said. “Although Samsung seems to be doing no wrong in the Android camp, I think with the Galaxy S III it is going to struggle to get the same success as the S II had.”

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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