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Qualcomm highlights the 3G device trend that gives Samsung an edge over Apple

Apple Growth Analysis

Qualcomm (QCOM) recently updated its 2012 3G/4G device estimates and the numbers demonstrate why Samsung (005930) is gaining such a strong smartphone volume advantage over Apple (AAPL). The new Qualcomm estimate for 3G device growth in North America between 2011 and 2012 was a pitiful 3 million units. North American device units inched up to 203 million in 2012 from 200 million a year earlier. This scant 1.5% volume growth in Apple’s strongest market shows just how hard Apple has to drive market share gains to deliver strong growth.

In sharp contrast, Latin American 3G device sales soared to 69 million units in 2012 from 49 million units in 2011. China/India volume rocketed to 218 million units from 165 million units. The upshot is that while North America yielded growth of just 3 million units, Latin America shipments were up by 20 million units and China/India grew by a torrid 53 million units.

Of course, the latter two regions are Samsung strongholds.

Interestingly, Qualcomm has kept revising the numbers in favor of Latin America and China/India all through the past year. A year ago, Qualcomm estimated that North America would be a substantially bigger 3G device market than China/India in the 2012 calendar year. The latest revision reduced North American volume estimates by 5 million units, while boosting the China/India estimates by 8 million units. This means that Qualcomm now believes that China/India actually sucked up 15 million more 3G devices during 2012 than the North America. This is a reversal of what the geographic balance was expected to be just a couple of quarters ago.

Handset vendors rely heavily on Qualcomm’s estimates, since the San Diego chip giant has a great vantage point on global trends. It is safe to say that most handset companies have underestimated Latin American and Asian 3G device growth, while overestimating the North American growth.

Samsung’s smartphone volume explosion in 2012 was driven by its huge success in Brazil, India and China. This may be one key reason why Apple is now contemplating a cheaper iPhone more seriously than in previous years. The importance of the North American smartphone market is shrinking rapidly as emerging market volumes bloom.

This also means that it is vitally important for BlackBerry (RIMM) to get the new low-end devices out as soon as possible. Its eroding market shares in Brazil, South Africa, Indonesia and Malaysia are now the biggest threat to the company’s long-term viability. The BlackBerry Z10 launch is not going to sway these markets.[bgr-post-bug]

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.