Apple had a short victory last quarter, when they surpassed Nokia (they were already ahead of Samsung in smartphones), but it looks like nothing will be able to stop Samsung’s skyrocketing growth. Samsung sold 27 million smartphones in Q3 this year, and it’s looking at selling around 35 million next quarter, now that Galaxy S II is on 3 carriers in USA, Galaxy Nexus will be able soon for Verizon, and we might even see the Galaxy S II HD by the end of the quarter. On the other hand, Apple is expected to sell only about 25 million iPhones next quarter. Even if they sell 30 million, they should still fall short of matching Samsung.
All this is really not surprising if you’ve been following Samsung and you knew where things are going. It’s not just that Samsung makes higher and higher quality products these days, but also because Samsung sells smartphones at all price ranges, and it’s only getting started. If you think that 27 million units per quarter is a lot, well, it’s not. The real volume will start with phones under $150, which Samsung hasn’t really made so far, but they will.
Samsung sells about 3x as many feature phones as smartphones, and all those feature phones are going to be smartphones in the next 5 years – Android smartphones for the most part. How do you compete with that if you’re Apple? You can’t, not unless you start selling low priced smartphones, which they won’t.
This is also a huge problem for Nokia, and to fix it, they should’ve seen it coming years ago, not just right now. Windows Phone won’t go too low on specs, and that’s because it’s too restricted. It’s hard enough for Microsoft to update even one year old hardware in what are basically the same phones, and it would be even harder to try updating a whole range of devices with different specs. It’s just not feasible, even for Microsoft. Plus, how big will the WP7 market really get? We haven’t seen anything encouraging so far, and it feels that Nokia will be just a big fish in a small pond, rather than a big fish in a big pond, like they could’ve been with Android.
Nokia also has plans for Meltemi, a Linux based OS (yes, another one) that’s coming to lower-end phones in the future, but I think Nokia will be in big trouble by then. It will definitely lose most of its market share to other Android manufacturers – not just Samsung and the top league, but also to companies like ZTE and Huawei.
Nokia is still leader in the whole phone market, but at the rate Nokia’s market share is declining, and Samsung’s market share is skyrocketing, I expect Samsung to become the leader of the whole phone market within a few quarters, too. And I say they will deserve it, but there’s no denying that Samsung wouldn’t have made it this far without being such a strong supporter of Android.
I don’t think any manufacturer would’ve been competitive against Apple with their own OS, and Bada feels like it’s at least 2-3 years behind Android, especially now after Android 4.0. And what good would a different OS do them if they would only be able to sell 10x less smartphones? Joining a strong ecosystem like Android was critical if they wanted to become competitive against Apple. The manufacturers should never forget that.