Samsung could defeat struggling Nokia as early as this quarter to become the world's largest smartphone maker by volume, according to analysts at Nomura, who also argue Asian companies are best positioned for smartphone growth.

The milestone comes a lot earlier than even Samsung anticipated: the Korean company said in January it planned to overtake Nokia in three years.

While Samsung Electronics issued its lowest quarterly profit in two years in the first quarter, investors have still put their hopes in the company's new Galaxy smartphones; the Nomura analysts have raised their Samsung smartphone shipment forecast for the full year to 86m units from 65m.

"After about 14 years at the top, Nokia looks set to relinquish its
smartphone crown (in unit terms) to Samsung and Apple," said Stuart Jeffrey, a New York-based analyst at Nomura in a separate note. "Further emphasising the shift in power to Asia is our forecast for HTC to almost match Nokia during 2012."

Nomura has "buy" ratings on smartphone companies across Asia -- Samsung Electronics, HTC, LG Electronics and ZTE.

"Although Samsung was late in entering the smartphone space compared to Apple and HTC, its strong execution capability, its forte in many previous cases, has proven itself by the company overtaking HTC in terms of smartphone shipments," said Nomura's CW Chung.

Nokia's decline has also opened up the market to Taiwan's HTC, which recently overtook the Finnish company to become the third largest smartphone maker by market capitalisation.

Stephen Elop, Nokia's chief executive, has pledged to turn the company around by teaming up with Microsoft, comparing it to an oil worker on a burning platform, with no choice but to leap into the icy water.

But Chung said a turnaround will take time and Samsung has already jumped ahead. Its share of the smartphone market is forecast to rise to 17.3 per cent in the second quarter, higher than Nokia's 16.1 per cent, though that still trails Nokia in the traditional handset market.

Samsung Electronics is "far undervalued", with a share price of KRW870,000 ($803), which is significantly below the analysts' target price of KRW1,350,000.

By breaking down Samsung into its constituents from semiconductors to telecoms, and comparing it to its global peers, Chung argues that it could be as much as 40 per cent undervalued.

"The growth outlook and scale of each of the company's operations is at least on par with or even above that of [its] global peers," he said. "And our analysis does not account for the value of Samsung's non-core investment assets (e.g. its stake in Samsung Corning Precision and Samsung Card)."

Shares in Samsung Electronics added 2 per cent to KRW870,000 on Tuesday, rising higher than the wider Kospi index.

Samsung mobile phone financials - NomuraSource: Nomura

See also:
Full coverage of Samsung Electronics - FT Tilt
HTC leapfrogs Nokia to become third largest smartphone maker - FT Tilt