Samsung dethrones Nokia, but can it wear the crown?

The changing order, which has appeared more and more inevitable over the past year in particular as Samsung's smartphone sales have jumped and Nokia's have fallen, provides an possibility to not only examine the past nevertheless look to the future. Why did these two companies cross paths, one on the down slope and the other rising swiftly? More importantly although, now that Nokia has been eclipsed by Samsung, what will Samsung do to maintain its position?

I heavily suspect that the factors that have driven Samsung to the top will not be able to propel it forward much more. Why? It's an issue I've written about previously: Services and the overall user experience are what will determine smartphone vendors' fates, not hardware specifications.

The newly crowned king from South Korea

Before turning to the newly crowned king from South Korea, it's worth taking stock of Nokia, for all that a proud Finnish giant however one that has undeniably fallen on hard times. Nokia's downfall was catalyzed by two things, primarily. First was its ineffectiveness Windows Phone as its primary smartphone platform) in responding to Apple's iPhone and Google's Android platform at the high end, and especially in the U.S market. It sputtered with Symbian phones and toyed with MeeGo, without much success. "Nokia redefined their Symbian phones as smartphones, which I thought was always preposterous," Recon Analytics analyst Roger Entner said. "That's like saying your soapbox car can compete with a NASCAR car because you're both racing."

Nokia as well got hammered at the low end, especially in emerging markets, not only by cheap Android phones from Huawei and ZTE, nevertheless by dozens of smaller firms operating in China, from Alcatel to Tianyu. It as well got undercut in markets like India where dual-SIM phones are critical; Nokia belatedly introduced dual-SIM devices in the second quarter of 2011 and has been working to grab more market share with its Asha sub-brand.

The top spot

So now that Samsung has the top spot, what will it do with it? Samsung has always been a great fast-follower, challenging Nokia at the low end, emulating Motorola's Razr in short on. But, as late as early 2010, Samsung was viewed as a relative laggard in smartphones. That changed with the introduction of the first Galaxy S Android smartphone in March 2010 and Samsung's ability to secure massive U.S. carrier distribution, something that Samsung would repeat with the Galaxy S II in 2011. To see how this strategy has borne fruit, consider this: According to technology firm Strategy Analytics, Samsung had 44.5 million smartphone shipments in the first quarter of 2012, up from 12.6 million in the year-ago quarter.

Samsung has benefited from being fantastic at execution, leveraging its unmatched scale in developing its own elements for displays, memory and chipsets. Nevertheless will those advantages be enough to sustain it? I'm not so sure. We'll like as not find out more May 3 when Samsung unveils its then flagship phone, presumably the Galaxy S III. CCS Insight analyst John Jackson said he is looking for not just more flashy hardware yet a comprehensive services strategy.