While Fitch and other credit rating agencies have just applied the former smartphone market leader (Nokia) the Junk label, it seems they have a strong belief that Samsung will remain the smartphone market leader for at least the next two years.
Fitch gives Samsung an A+/Stable rating, which is the highest one they are giving to any company in the Asian region. They note that Samsung has risen from a 3% market share in the smartphone market just 2 years ago to a leading 31%. That translates into 96.7 million smartphones sold by Samsung in 2011, followed closely by Apple with 91.3 million.
At the same time, Nokia plummeted from 38% to 8%, which confirms my fears that Nokia will not last through this year without being either acquired or becoming bankrupt. Their decline rate is just too “insanely great” (to paraphrase the late Steve Jobs). Microsoft has decided that no current WP7 phones will get the upgrade to WP8, which means that potential customers will have another reason to shun Nokia’s WP7 devices.
Nokia will have no choice but to be reduced to a small time manufacturer, due to both the fast decline of Symbian and the very slow rise of WP — if it survives all this, that is. All this while Samsung is leading and on the rise, thanks to Android, an OS that Nokia never really gave a chance (to their loss, it seems).
Samsung has been able to penetrate both the emerging markets, Nokia’s former fief, and the developed markets, with flagships like the Galaxy S series. Moreover, Sammy is set to break their own records once more, considering they’ve gotten 10 million pre-orders for the Galaxy S3 alone.
Fitch also says that Samsung was able to offer a better experience thanks to the larger screens on their devices, compared to, say, something with a small screen, like the iPhone 4S. No surprise here. As long as the phone is still pocketable and easy enough to handle, a bigger screen offers a better user experience. That’s something the slightly bigger display of the next-gen iPhone will not likely change, which will allow Samsung to keep growing over the next two years.
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I really loath forecasts especially in markets that are very fast changing. Anyone that watched Microsoft’s WP8 announcement should realize that MS, finally, is bringing something serious to the table that could be a game changer. . . or it may fall flat on its face.
Samsung could be a long term juggernaut in the mobile area. . . or they could fall as quick as RIM & Nokia.
I have a feeling the next two years are going to be VERY tumultuous in the mobile market and we’ll see a lot of changes no one expected.