Smartphone wars: Samsung top dog...for now

Samsung should celebrate being the king of smartphones today, but the fourth quarter competition is going to be far more challenging.
Written by Larry Dignan, Contributor

Credit: Strategy Analytics

Credit: Strategy Analytics

Samsung led the smartphone pack in the third quarter, but it's uncertain how long the Korean electronics giant can stay top dog.

According to Strategy Analytics, global smartphone shipments hit 117 million units in the third quarter, up 44 percent from a year ago. Samsung shipped 28 million smartphones and trumped Apple with 24 percent market share. The news has techies all abuzz.

On its earnings conference call, Samsung said its new Galaxy devices as well as Long-Term Evolution phones drove its results.

Morgan Stanley analyst Keon Hon noted that Samsung's phone performance was impressive. Hon said in a research note:

Handset volume was much stronger than anticipated at 91 million to 92 million vs. 88.5 million expected. We think about 29 million of that was smartphones (up nearly 45% quarter over quarter in terms of volume) which drove up the blended average selling prices and margins again on better mix. 4Q11 guidance was positive with expectations of further volume growth and mix improvement. More new products are being released both at high-end and mid-end.

All is well for Samsung right? Not so fast.

There are a few good reasons to take this Samsung rules smartphones line with a hefty grain of salt. For starters, Samsung benefited from Apple's iPhone 4S launch. As noted on Apple's latest earnings call, the company was looking to clear inventory ahead of the iPhone 4S. So far in the fourth quarter, iPhone 4S sales have been on a blistering pace. Some of those sales will come at the expense of Samsung devices.

In addition, Motorola and HTC have new Android devices hitting the market. In the U.S. Samsung won't have the LTE market to itself.

Meanwhile, it's also worth checking out IDC's latest data. IDC noted that smartphone growth in the third quarter slowed as many folks waited for new phones. The overall mobile phone market slowed.

IDC noted that Nokia's stemmed its market share slide due to a better feature phone lineup. Now Nokia is going to carpet bomb the globe with Windows Phone devices.

Add it up and Samsung should celebrate being the king of smartphones today, but the fourth quarter is going to be far more challenging.

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