Nokia woes continue as Samsung poised to become top smartphone maker

Apple and HTC also predicted to overtake ailing handset manufacturer

Samsung will overtake Nokia as the number one mobile manufacturer in the second quarter of 2011, ending the Finnish firm's 14-year run at the top, according to analysts at Nomura.

This represents a major turnaround for Samsung, which has seen its market share rise from 4.8 per in the first quarter of 2010 to 20.4 per cent in the third quarter of 2011, said Nomura's Handset Market Update report.

The once dominant Nokia is also predicted to fall behind Apple in the second quarter and could even be overtaken by HTC in 2012, the analysts noted.

Nokia has faced significant challenges and struggled to make a dent in the smartphone market despite releasing high-end devices such as the N8 and E7.

The firm's market share in the $300 smartphone segment plunged by 46 per cent in the Asia Pacific region, and by 24 per cent in western Europe, last year, largely owing to the growth of Android.

"We believe that Nokia's high-end market share in central and eastern Europe and in the Middle East and Africa is vulnerable to a similar decline as soon as Android vendors broaden their distribution into these regions," the report said.

Nokia's downward spiral is all the more noteworthy set against the market trend. Nomura expects demand for smartphones to increase in 2011 to 478 million units shipped. Revenue is estimated to top out at $138bn.

However, the analyst also pointed out that there is a risk of short supply in the third quarter, as Apple starts manufacturing the iPhone 5 during the middle of the year.

Nokia woes continue as Samsung poised to become top smartphone maker

Apple and HTC also predicted to overtake ailing handset manufacturer

"If Apple expects this launch to prove as successful as its prior launches, we are likely to see a lot of component supply tied up at Apple from early August. We believe that iPhone production could increase from 16.5 to 17 million in calendar Q2 to 22 to 24 million in calendar Q3," the report said.

"In addition, we believe that iPad production plans call for a sharp jump in Q4, from around 12 to 13 million in Q3 to as much as 18 to 19 million in Q4."

Meanwhile, Android is on course to outsell Symbian devices four-to-one by the end of the year, according to Nomura.

Prices of Android devices will continue decreasing and could signal the end for feature phones if they fall below $100, the report continued.

"We also view Nokia's sub-$300 market share as unsustainably high and vulnerable to Android's move into the sub-$200 segment," the report said.

The first quarter of 2011 was disappointing for tablet sales, however, which Nomura put down to production shortages of the iPad 2 and the fact that other tablet operating systems have an undeveloped ecosystem and remain "unconvincing".

Apple is forecast to continue leading the tablet market, but volumes of Android devices will increase later this year and in 2012, Nomura added.

"Other tablet OS solutions are still struggling to build an ecosystem of applications, while Windows 8 for tablets is unlikely to have a material impact on the market until mid to late 2012," the report said.