Bernstein Research analyst Pierre Ferragu didn’t say that Nokia should go back to making boots in his note to investors on Wednesday, but he came pretty close. Citing Nokia’s inability to adapt in a fast-changing market, Ferragu cut his rating on Nokia stock to under-perform and dropped his price target from $7.33 to $4. “In a fast changing market, Nokia is losing ground very rapidly,” the analyst writes. “The profit warning for the second quarter provided evidence that the next couple of years will prove very challenging, with the gross margin and market share trends of the last 4 quarters continuing, if not accelerating even more. The collaboration with Microsoft now appears to us unlikely to be successful, as Nokia’s brand is losing ground too fast and the window of opportunity for an alternative ecosystem is vanishing rapidly. Even modeling a scenario in which Nokia stabilizes next year leads us to believe that the stock will under-perform over the next twelve months.” Ferragu believes Nokia’s smartphone market share will be cut in half in the second quarter of 2011 compared to the same quarter a year earlier, dropping from 38% to just 19%, and he expects Nokia’s overall cell phone market share to slide from 35% to 30%.
Smartphones’ share of the global cell phone market is poised to explode over the next four years, according to market research firm Pyramid Research. The firm on Friday released the findings of its latest Smartphone Forecast, as compiled by Senior Analyst and Practice Leader for Mobile Devices, Stela Bokun. Bokun determined that global smartphone sell-through — or, the number of smartphones sold to end users — will total 1.46 billion units in 2011, accounting for 27% of all cell phones sold. Pyramid expects that figure to nearly double to 53% in 2015, driven by growing demand for affordable Android smartphones. “Much of the projected total market growth in 2011 will come from the Africa and Middle East (AME) region, which will see a strong demand for low-end smartphone models, ultra low-cost handsets and dual-SIM and full touch-screen feature phones,” Bokun noted in a statement. “The main drivers of the demand in the developed markets will be the launches of a number of flagship high-end devices and new features and technologies. However, inexpensive smartphone models, particularly those from Huawei and ZTE, also will be in high demand in some of the richest Western European, Asian and North American markets.” Finally, Bokun notes that while smartphone sales will be driven in large part by Android over the next four years, Microsoft’s Windows Phone platform will overtake Android and other operating systems to become the top-selling smartphone platform in the world in 2015.
New numbers released Monday by research firm NPD Group suggest that Android has further extended its lead in the U.S. with 44% of the smartphone market. The bigger news, however, is that RIM has seemingly slipped behind Apple, which is now the number 2 smartphone vendor in the United States. Last week, IDC stated that Apple passed RIM to become the fourth largest cell phone maker in the world. Now, according to the new NPD report, Apple gained a single percentage point to attain a 23% share of the U.S. smartphone market while RIM slid to 22%, making it the number 3 smartphone vendor in the U.S. NPD’s numbers vary slightly from another report issued Monday morning by Canalys, the end result is the same. Canalys reaffirms Android’s 44% market share while stating that Apple rose to 26% and RIM fell to 24%.
Despite Android’s lead as a platform, the iPhone is the most popular smartphone model in the U.S. without question. Apple currently sells only two smartphones and both are iPhone models — the $199-$299 iPhone 4 and last year’s iPhone model, the iPhone 3GS, which is now $99. The California-based company is expected to introduce a third iPhone early next year that will operate on Verizon Wireless’ CDMA network. More →