Finnish wireless phone king Nokia (NYSE:NOK) is in the prognosticating mood these days. It has announced an anticipated increase in global market share for mobile phones in the second quarter of 2007. While not citing a specific number, management thinks its share of the market should increase from the 36% it projects it held in the first quarter of 2007.
Nokia has been dancing on the freshly dug grave set aside for struggling Motorola (NYSE:MOT), which, according to Strategy Analytics, had only an 18% share of the global market, down from 22% the year before. The handset maker has struggled to find the same buzz and sizzle the popular RAZR phone lineup put in its handset business back in 2004. The fall from grace has been so pronounced that management had to fight off uppity shareholder Carl Icahn's quest for a seat on the board of directors.
Meanwhile, Nokia is making strides in expanding its share of the growing Chinese market, as evidenced by an expanded partnership with China's largest mobile phone distributor, China Postel. This latest agreement has the company buying $2.5 billion worth of wireless devices from Nokia in 2007. China Postel has already sold more than 37 million Nokia mobile phones, helping the Finnish giant tap a market that signs up roughly 5 million new subscribers a month.
Nokia has been pushing a goal of 40% market share for years, but it actually lost some share a few years back. The company misread the "thin is in" trend that propped up the RAZR but also struggled with a lackluster lineup of CDMA phones for carriers such as Sprint Nextel (NYSE:S) and Verizon (NYSE:VZ). The company's reluctance to sacrifice profitability in order to capture more market share has slowed progress to this goal as well.
Beyond the second quarter, a new wild card coming into the handset mix this summer is Apple (NASDAQ:AAPL), which is looking to make a big splash with the iPhone, carried exclusively by AT&T (NYSE:T). While the product is currently only slated for release in the U.S., many expect it to eventually make inroads around the globe. What will be even more interesting than Nokia's increased share and the iPhone's entrance, though, is which competitor(s) will suffer at their expense.
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Fool contributor Dave Mock is waiting for the "fat is where it's at" trend to come into style so his old Nokia phone will be trendy again. He owns shares of Motorola. Dave is the author of The Qualcomm Equation. The Fool's disclosure policy doesn't take sides; it just holds your hand and talks in a soothing voice.
