By Kim Yoo-chul
By the end of the year at the earliest, Samsung Electronics is set to replace Nokia as the No. 1 mobile handset maker in terms of total shipments, industry sources and Samsung officials said Tuesday.
This means that in spite of Samsung Chairman Lee Kun-hee’s clean-up efforts, mobile chief Shin Jong-kyun will retain his current post at any year-end reshuffle.
``Samsung has the chance to become the world’s biggest handset maker beating out the Finland-based phone maker,’’ one official said.
``Samsung’s product portfolios are balanced thanks to its early response in releasing the Galaxy series. In 2G-based phones, which are outdated, consumers in Africa, South America and some Asian countries are still buying at discounted prices,’’ he added.
Samsung plans to sell over 330 million phones throughout this year including 100 million smartphones.
``It’s true that Nokia is in sight,’’ said another senior Samsung official.
Nokia is also one of Samsung’s top clients as the Finnish firm buys flat-screens and chips for its smart and feature phones.
During the first half of this year, Samsung sold 31.6 million smartphones, pushing Japanese brokerage Nomura Securities to release the report that said Samsung beat Nokia in the second quarter.
That’s a ``very surprising move’’ because Samsung just sold 6.8 million smartphones for all of 2009. Last year, it sold 25.2 million, according to data given by the company.
``From logistics channels, products, marketing and after-sales policies, Samsung is doing quite well. It has the power to give a faster answer in response to growing market calls for newer products,’’ said Song Jong-ho, an analyst at Daewoo Securities.
Nokia has been cutting prices of its some strategic models by over 15 percent in Europe in an apparent strategy to secure its bottom line, which is rare considering Nokia’s business strategies.
Samsung’s handset business has emerged as the new cash-cow amid struggles in its traditionally-strong memory chips and flat-screens.
During the second quarter, it reported 3.7 trillion won in operating profit and analysts said the better-than-expected quarterly performance was mostly due to the outstanding performance of its telecommunication division.
Samsung officials said they haven’t lost sight of the ``big picture,’’ and are wary of Chinese handset makers.
``Samsung must keep an eye on our Chinese rivals. That’s the second mission that its telecom division should handle,’’ said a Samsung executive.
China’s ``K-Touch’’ smartphones are narrowing the market gap between Samsung’s Galaxy and Nokia phones with more customized models and cheaper prices.
In China, which will become the biggest consumer electronics market from next year after North America, Nokia’s share was 33.2 percent, followed by Samsung with 25 percent as of the first quarter, market research firm Gartner said.
``It’s true that Samsung is being challenged by leading Chinese phone makers. We will put more functions on upcoming models that are fitted with Chinese' features,’’ said Samsung’s Shin.
Samsung was recently sued by a Chinese handset-design firm which claimed that it had infringed on patented ``dual sim’’ technology that supports CDMA- and GSM-based phones.
``We were brought to court. But that’s not new. We will defend our intellectual property rights in court,’’ a Samsung spokesman said.