Apple Yet to Crack Top Five, Nokia Already Cutting Prices

The cell phone industry has been turned on its side since the release of Apple’s original iPhone more than a year ago, with the worldwide release of the 3G version amplifying the effect even further.

Despite its relatively huge success in sales of its iPhone and iPhone 3G, Apple has not done quite enough yet to garner a position in the top five mobile phone vendors globally. This is one of the major unwritten takeaways from a new report by research firm IDC.

The iPhone, in part though, may have contributed to an overall increase of global phone sales. IDC believes “advanced features in high-end phones” helped drive just slightly over 15 percent in sales growth between the second quarter of this year and the same time last year. Overall numbers show an increase from 265.4 million phones to 306 million.

The niche phone category of smartphones, which includes the iPhone, saw year-over-year growth rates of 40 percent, compared to roughly 10 percent of the rest of the industry.

The top five global mobile phone vendors, meanwhile, are Nokia, Samsung, Motorola, LG Electronics and Sony Ericsson. It is interesting to note that while Nokia leads the pack with nearly 40 percent market share in the most recent quarter.

Even with the commanding lead in market share, Nokia is keeping a keen eye on its rear view mirror. It was revealed that the Finnish cell phone maker is cutting the prices of its handsets by up to 10 percent, with the 5310, 5610 and N81 8GB getting the largest drops. The price cuts come at a time when profits are already thin.

“This is basically a way to run away from competition. You’re putting a lot of pressure on your less competitive peers,” said David Hallden, analyst at Cheuvreux, in a Reuters story.

As the market leader, Nokia stands to have the most to lose. Times are tough for some and better for others in the mobile sector. Motorola and Sony Ericsson reporting downward trends, while the Korean firms Samsung and LG Electronics are picking up with improved carrier agreements, no doubt helped by the weaker Korean won.

“Nokia has always been extremely tactical with its pricing, pinpointing sweet spots in different segments of the market and making adjustments to wrongfoot competitors,” said Ben Wood, research director at CCS Insight, in the report.

Although Apple has yet to crack the top five, Nokia is surely cutting prices in hopes of maintaining its spot at the top.