Will Apple go the way of Nokia?

Published Fri, Jul 31 201511:53 AM EDT

It's clear that Apple is the most dominant company in the technology industry. The iPhone maker is the world's largest company by market value and has more than $200 billion in annual revenue. It controls almost a fifth of the global market for consumer electronics by revenue, according to Nomura. But technology history is littered with examples of companies that held complete dominance at one time, only to be displaced by a new competitor. See IBM , Hewlett Packard , Microsoft and Cisco for examples of tech juggernauts that seemed indomitable during their heydays, but later faltered. But the company that probably most closely resembles Apple's standing is Nokia . Will the Apple story end like its Finnish competitor? Nomura raised that issue in a report to clients Friday. Analyst Jeffrey Kvaal wrote: "Apple's ascendance is not the first time a company has offered near hegemony over at least a portion of the consumer electronics market. For example, Nokia commanded 36 percent share of handset revenues in 2008 and a slightly higher share of unit volumes. That, obviously, ended poorly for Nokia. Ironically, the path to Nokia's market share demise was already paved in the year of its greatest dominance. The iPhone launched in 2007." Kvaal, who initiated the shares with a "buy" rating Friday, gave two main reasons why Apple can buck the trend that's befallen all the past tech bellwethers. 1) The Apple software ecosystem: "We do not consider Apple vulnerable to such a rapid reversal of fortune given its ecosystem of devices, software and services. iOS, iTunes and the App Store easily tie together iPhones, iPads, iPods and Macs. The Apple Watch is a smooth—or shall we say increasingly smooth—extension of the iPhone onto the wrist. Apple Music, Apple Pay and ultimately Apple TV all tie consumers to the Apple ecosystem. We argue through this report that Apple has share left to gain, particularly in its largest category, iPhones, and that its growing roster of services will keep customers loyal to the Apple brand." 2) Apple stealing smartphone share from Samsung without a low-cost phone offering: "Given that industry unit growth is driven by emerging markets, which thus far have primarily purchased Android phones, one would expect Samsung to be at least holding its own in the handset market. However, Samsung, though still the industry leader, has seen its share trending down over the past few years from the low-30 percent area to the low-20 percent area. We believe most of the share loss was captured by LG, Lenovo and Huawei – together their share has increased from 9 percent in 1Q12 to 16 percent in 1Q15—and to a lesser extent by Apple." The chart below shows Apple continuing to fight off Samsung. Read More The most loved stocks on Wall Street Nomura believes Apple shares will rise 20 percent over the next 12 months as it continues its dominance.

A model displays the Nokia 6151, at the Nokia exhibition in Singapore, June 19, 2006.

Roslan Rahman | AFP | Getty Images

It's clear that Apple is the most dominant company in the technology industry.

The iPhone maker is the world's largest company by market value and has more than $200 billion in annual revenue.

It controls almost a fifth of the global market for consumer electronics by revenue, according to Nomura.

But technology history is littered with examples of companies that held complete dominance at one time, only to be displaced by a new competitor. See IBM, Hewlett Packard, Microsoft and Cisco for examples of tech juggernauts that seemed indomitable during their heydays, but later faltered.

But the company that probably most closely resembles Apple's standing is Nokia.

Will the Apple story end like its Finnish competitor?

Nomura raised that issue in a report to clients Friday.