Home Nokia vs Apple in The Internet Mobile Device Market

Nokia vs Apple in The Internet Mobile Device Market

We’ve been as excited as everyone else about the iPhone 3G. But it’s easy to forget that the iphone is just a tiny player in the mobile phone market. Even if it hits Steve Jobs’ target of 10 million iphone sales by end of 2008, that will still be less than 1% of the mobile device market.

To put it into perspective, Nokia remains the world’s biggest mobile handset maker with an estimated 40% of the market. Impressively Nokia has a very healthy lead over its competition. However if you look more closely, Nokia is slipping behind in the all-important Internet mobile device market.

But first the good news for Nokia fans. Nokia just announced that in Q2, 2008 it had sold 122 million cell phones, up about two percentage points from its second quarter 2007 market share of 38%. These are Nokia’s estimates, but they say that overall 303 million mobile devices were sold worldwide in Q2, 2008. Interestingly the geographical breakdown shows clearly that the Asia-Pacific market dwarfs the North American market:

Now the bad news. In the Internet mobile device stakes, where Apple is now a big threat, Nokia reported that its “converged mobile device” options (e.g. NSeries and ESeries) has 41% of the market. However the same time last year they had 51%. Nokia says that the “converged mobile device industry” sales were 37.1 million units in Q2, compared with an estimated 27.0 million units in the second quarter 2007. Nokia’s converged mobile device volumes were 15.3 million units in the second quarter 2008, compared with 13.9 million units in the second quarter 2007. The company says it shipped “over 10 million Nokia Nseries and almost 2 million Nokia Eseries devices during the second quarter 2008.”

To get back to the iphone – how can we resist, sorry Russell – it’s clear it will make serious inroads into Nokia’s market share of Internet mobile devices. The Blackberry is also continuing to hurt Nokia in that high end market. Nokia’s own figures are showing that it’s struggling to keep pace with Apple and RIM, just 41% market share in converged devices in Q2 compared to 51% a year ago (also see this report of nearly 53% in Q4 07).

Longer term, I’d expect Apple’s iPhone to reach levels similar to the Mac in the PC market – 8.5% and rising according to latest reports. Maybe 5% is more realistic, but you never know with the momentum Apple has in all digital media markets right now.

As for Nokia, it will probably continue to hit around 40% in overall market share, but its Internet phones are trending in the wrong direction. According to a CNET report, Nokia plans to soon introduce “a range of touchscreen phones that will likely compete head-to-head with Apple’s iPhone”. And as its recent outright purchase of the Symbian OS shows, it’s looking to attack Apple on the ‘open’ front. As the advert below shows, it is talking tough in the process (note also the parody above):

Via CommandZed

It will be interesting to see if they can reverse the trend. I suspect that Apple is always going to have the advantage when it comes to high-end computing products, and mobile will be no exception. But Nokia’s mainstream market share is too large for it to be easily usurped, so the iphone almost certainly will never have the market share that the ipod enjoys (85% plus). We’re interested in your thoughts on the Internet mobile device market, please share them in the comments.

Images: tnkgrl and brandon shigeta

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