Nokia losing SA smartphone race

Johannesburg, 10 Jul 2009

While Nokia smartphones have been successful among local consumers, the handset manufacturer is suffering increasing pressure from other cellphone models.

A report by mobile advertising company mKhoj reveals sales of Samsung smartphones have outstripped Nokia sales locally. The Business Monitor International report notes that, while sales of the Nokia N-series make up around 7.5% of handset sales locally, Samsung smartphone sales have outstripped it. The report says Samsung makes up around 17% of handset sales locally and is climbing in popularity.

The report also revealed that, while Nokia makes up 39% of handset share of network traffic, this is a drop from its 46% share in January. Samsung currently holds 33% of the market, up from 20% in January. The iPhone, since entering the market, only contributes 0.06% of the total network traffic - making it a relatively small but growing player, the report reveals.

Nokia has always been successful in SA, according to Ryan Smit, research analyst at BMI-TechKnowledge, but stiff competition, new multimedia handsets and price issues have seen its market share take a dive. Nokia previously reported declining global sales in 2008, an indication of increased competition in the higher end of the consumer smartphone market, and the decreasing appeal of the N-series.

Catching up

Research In Motion has been successful lately, with its BlackBerry Curves, Storm and Bold, says Smit. The focus on more consumer-oriented functionalities, such as Facebook and FlickR applications, and instant messaging applications that are able to run in the background, has paid off, he says. High sales growth was also driven by price, as these phones are not as expensive as some other smartphones.

HTC has enjoyed significant success over the past few years with its Windows-Mobile smartphones. According to Smit, this was especially true once it introduced the TouchFlo interface, which made new models easier to use for consumers. HTC has always offered high-specification phones and many consumers have been attracted to this, Smit explains.

The Apple iPhone has been a big success in SA. It is only available through Vodacom and only recently has been available on contracts for less than R400 per month, but it is still attractive to consumers, notes Smit. It offers ease of use, media functionality and the best third-party applications around at the moment, he adds.

Improving features

Technology specialists at MTN say handsets with operating systems that facilitate easy access to Web 2.0 services are still doing well, despite the economic situation. Popular models, such as the 5800 and E71 from Nokia, the Samsung i900, the Sony Ericsson X1 and the BlackBerry 8900 and 9000, are still enjoying strong demand.

“These are all devices with high-end features, and the market finds the opportunity to do more and save time in both business and leisure a compelling offer. Features like integrated IM, e-mail and calendar functions, comprehensive contact lists and the strong browsing experience all encourage a rich mobile communications experience,” the mobile operator says.

Demand for these types of services is also demonstrated in the mid-tier segments, as more users buy devices that offer similar features at a lower cost. A good example of this is the LG KS360, says MTN. The phone offers e-mail and IM at a price that is accessible to a larger portion of the market than the average smartphone, and SA can expect to see more devices catering to this type of user as demand grows, says the mobile operator.

Android power

Smit says Android-powered handsets have also been popular, and are expected to grow in the future. Improvements by HTC are also expected to aid the growth of the cellphone company, which has introduced its Sense user interface. It brings many of the widgets and applications it had on its Windows Mobile models to Android handsets. But, there are still some concerns that need to be addressed, Smit notes.

“Many consumers who have recently purchased Android handsets have been frustrated that the Android Market - a mobile application that lets you purchase and install third-party application to your phone - has been unavailable to South Africans. Rumour has it that Leaf is working on the problem to get the Android Market to existing HTC Android phones.”

Smit says Android is an attractive choice to many consumers, as it is stable, fast and has good integration with Google services. But it does not offer the same level of Microsoft integration as Windows Mobile handsets, and is also limited by the fact that the HTC Dream is only available to MTN customers, and the HTC Magic is only available to Vodacom customers, he concludes.