Apple needs mid-tier device in face of iPhone saturation

Analyst backs Android to win in high-end market as RIM and Nokia face uncertain futures

Apple's roaring success in the high-end smartphone market could force the company to introduce a mid-level device as the iPhone begins to reach saturation point, according to an analyst at financial services firm Nomura.

Richard Windsor told attendees at the Open Mobile Summit in London that emerging markets in Asia will be key to Apple's future success as the company's market growth flattens off.

"If Apple doesn't bring out a lower-priced device that allows it to enter new markets in Asia we favour the Android camp such as LG and Samsung to be the winners," he said. "But if Apple brings out a mid-range phone then all bets are off."

Windsor noted that very few rumours are emerging from Apple's component manufacturers, suggesting that nothing is in the immediate pipeline and making late 2012 the most likely release date if it happens at all.

Nokia's market outlook is far gloomier, the analyst said, citing the firm's financial woes as proof that previously strong markets, mid-tier smartphones and low-end devices are no longer the bankers they once were.

"Nokia has been present in areas where there has not been much competition, but now the company is struggling to break even as firms like ZTE and Huawei bring out good, solid Android devices," he said.

Windsor argued that it is hard to tell how Nokia's partnership with Microsoft will perform until devices hit the market, but that Nokia will not be saved with a high-end device this year.

Apple needs mid-tier device in face of iPhone saturation

Analyst backs Android to win in high-end market as RIM and Nokia face uncertain futures

"The launch at the end of 2011 is irrelevant as it won't be the product that saves the company," he said.

"The opportunity for Nokia is in the $200 to $300 range, but we have no idea how it will perform once this happens and we are still cautious on its financials. This is the best year for smartphone markets. Growth will slow after this year and then it's going to be harder to grow."

Windsor added that Apple and Samsung are unlikely to buy Nokia, but that the manufacturer could become an attractive proposition if its share price continues to fall.

RIM was also cited as facing major difficulties, although Windsor believes that the BlackBerry maker has opportunities to save itself.

"RIM is under increasing assault on all fronts, although QNX may save the day on its PlayBook and future phones. It is losing market share hand over fist, and needs a set of new devices. But nothing is coming until 2012," he said.

Finally, Windsor said that the tablet market will be dominated by Apple unless Android tablets come down dramatically in price.

He argued that the low sales figures from Apple rivals in January when a host of tablets were unveiled is proof that they are priced too high.

Earlier at the event, Nokia chief executive Stephen Elop categorically denied any suggestion that the firm would be sold, backing its future on Windows Phone 7.