After overtaking Apple for the top spot in the smartphone market, Samsung is looking to overtake Nokia in the overall mobile phone market in 2012. According to a report from Korea Economic Daily, Samsung is expecting a 15% increase in its mobile phone sales next year. [1] Meanwhile Nokia’s fortunes continue to take a turn for the worse as its partnership with Microsoft has failed to spark interest in its phones.
Our $7 price estimate for Nokia’s stock is about 40% above the market price.
See our complete analysis of Nokia here
Nokia’s fortunes continue to decline
We expect that Nokia will be able to sell over 400 million mobile phones this year, out of which more than 300 million will be from emerging markets like India and China. On the other hand, Samsung is expecting 374 million mobile phone sales next year compared to estimated sales of 325 million this year. Nokia’s position has been sliding downward, with its market share in emerging markets having declined from 45% in 2008 to about 30% in 2010, and it could slide further to 27% by the end of 2011, by our estimates. If this pace of decline continues into 2012, Nokia could very well yield its number one position to Samsung.
Nokia-Microsoft partnership not working
The loss of market share is not the only bad news surrounding Nokia. Last month, when the company launched its Lumia smartphones in Europe, there was hope for a turnaround in the near future. But it seems that these hopes may be short-lived, as a recent survey indicated that only 2% of Europeans are interested in buying Nokia’s Lumia 800, its first Microsoft Windows Phone. [2] If this consumer disinterest continues there could be substantial downside to our market share forecast.
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Notes:
Samsung eyes 15 percent rise in handset sales next year, Reuters citing a Korea Economic Daily report, December 27th, 2011 [↩] New Nokia smartphone fails to turn tide, Reuters quoting survey conducted by Exane BNP Paribas, December 21st, 2011 [↩]
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