For the first time in 14 years, South Korean electronics major Samsung is set to take over Nokia as the number one cellphone maker.
According to a report from market intelligence company IHS iSuppli, Samsung will overtake the Finnish company as the number one handset manufacturer in terms of annual device shipments in 2012.
The report said that Samsung is expected to account 29 percent of worldwide cellphone shipments, up from 24 percent in 2011. Nokia's handset shipments fell to 24 percent compared to last year's 30 percent.
Samsung's arch rival Apple made it to the top three with 10 percent of global handset shipments.
IHS iSuppli's Preliminary Forecast of Top-5 Cellphone Handsets OEMS in 2012
| Rank | Company | 2011 | 2012 |
| 1 | Samsung | 24% | 29% |
| 2 | Nokia | 30% | 24% |
| 3 | Apple | 7% | 10% |
| 4 | ZTE | 6% | 6% |
| 5 | LG | 6% | 4% |
"The competitive reality of the cellphone market in 2012 was 'live by the smartphone; die by the smartphone," said Wayne Lam, senior analyst for communications at IHS.
He further said, "Smartphones represent the fastest-growing segment of the cellphone market and will account for nearly half of all wireless handset shipments for all of 2012. Samsung's successes and Nokia's struggles in the cellphone market this year were determined entirely by the two companies' divergent fortunes in the smartphone sector."
Samsung's success can be attributed to its strategy of making smartphones that meet different budget needs of consumers. The company is known for producing entry-level smartphones to expensive high-end smartphones.
The company recently unveiled a budget friendly, 5-inch Galaxy Grand. Its flagship smartphones Galaxy S3 and Galaxy Note 2 phablet, both of which were unveiled this year, made record number of sales.
On the other hand, Apple is known to produce only high-end smartphones and has been successful in consolidating sales from the US and Europe.
However, the company has to do lot more to penetrate in to the third world countries like India, China and other markets in Asia.
Apple's quality smartphones helped the company climb to second spot in worldwide smartphone shipments .
Nokia's downfall in cellphone shipment ranks is blamed on the lack of foresight in the smartphone market. Nokia is still dominant in basic handset shipments, but the company was late to recognise smartphone trends in the global cellphone market.
Nokia has slipped to third place in smartphone shipment worldwide. The company was able to ship only five percent of smartphones, down from 11 percent in 2011.
Nokia has joined hands with Microsoft to run their smartphones on Windows based mobile operating system; Nokia's Windows based phones are set to make noise in 2013, until then Nokia has to settle for second rank in 2012.
Preliminary Forecast of Top-5 Smartphone Handset OEMs in 2012:
| Rank | Company | 2011 | 2012 |
| 1 | Samsung | 20% | 28% |
| 2 | Apple | 19% | 20% |
| 3 | Nokia | 16% | 5% |
| 4 | HTC | 9% | 5% |
| 5 | RIM | 11% | 5% |
The IHS iSuppli report said global smartphone shipments are set to rise by 35.5 percent this year. It further elaborated that smartphone penetration is set to reach 47 percent at the end of 2012, up from 35 percent in 2011.
