Based on the growth rate of the Apple iPhone, Nokia will no longer be the smartphone market leader by the year 2013. Nokia currently has a 40% market share and that will be reduced to 20% within the next four years as Apple’s market share rises. In terms of unit sales, Apple is expected to move about 77 million iPhones by 2011 matching Nokia’s sales.
The study was conducted by Generator Research, a digital media research and consulting company.
The reason why Generator believes that Nokia’s market share will drop is because they are focused on making budget devices for developing countries. The market for the devices in developing countries is still growing, but the company doesn’t have financial stake in ensuring that their smartphones stay on top. Nokia’s true profits do not lie in the smartphone business.
Nokia also slowly responds to competition. After the iPhone was released, it took Nokia a year and a half to reply with a phone that matches the features. After the iPhone App Store boasted 1 billion application downloads, Nokia was pushed to create the Ovi Store as a central place to download applications, music, ringtones, and video.