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Mobile phone sales declined in 2012 Featured

Worldwide mobile phone sales to end users were 1.75 billion units in 2012, a 1.7% decline from 2011.

The figures are from market analysts Gartner, which says smartphones continued to drive overall mobile phone sales, and the fourth quarter of 2012 saw record smartphone sales of 207.7 million units, up 38.3% from the same period last year.

“The last time the worldwide mobile phone market declined was in 2009,” said Anshul Gupta, principal research analyst at Gartner. “Tough economic conditions, shifting consumer preferences and intense market competition weakened the worldwide mobile phone market this year.”

Demand for feature phones remained weak in 2012 and in the fourth quarter. Sales of ‘feature phones’ (Gartner’s phrase for phones that are not smartphones) totalled 264.4 million units in the fourth quarter of 2012, down 19.3% year-on-year. Gartner analysts expect feature phones sales to continue to fall in 2013. Gartner predicts that sales of worldwide smartphone sales to end users will be close to 1 billion units in 2013, and overall mobile phone sales to end users are estimated to reach 1.9 billion units.

In the fourth quarter of 2012, Apple and Samsung together raised their worldwide smartphone market share to 52% from 46.4% in the third quarter of 2012. Samsung ended the year in the No. 1 position, in both worldwide smartphone sales and overall mobile phone sales.

“There is no manufacturer that can firmly lay claim to the No. 3 spot in global smartphone sales,” said Gupta. “The success of Apple and Samsung is based on the strength of their brands as much as their actual products. Their direct competitors, including those with comparable products, struggle to achieve the same brand appreciation among consumers, who, in a tough economic environment, go for cheaper products over brand.”

In the fourth quarter of 2012, Samsung’s overall smartphone sales continued to accelerate totalling 64.5 million units, up 85.3% from the fourth quarter of 2011. In 2012, Samsung totalled 384.6 million mobile phones sales, of which 53.5% (up from 28% in 2011) were smartphone sales.

Worldwide mobile phone sales to end users by vendor in 2012 (thousands of units)

Company

2012 Units

2012 Market Share (%)

2011 Units

2011 Market Share (%)

Samsung

384,631.2

22.0

315,052.2

17.7

Nokia

333,938.0

19.1

422,478.3

23.8

Apple

130,133.2

7.5

89,263.2

5.0

ZTE

67,344.4

3.9

56,881.8

3.2

LG Electronics

58,015.9

3.3

86,370.9

4.9

Huawei Technologies

47,288.3

2.7

40,663.4

2.3

TCL Communication

37,176.6

2.1

34,037.5

1.9

BlackBerry

34,210.3

2.0

51,541.9

2.9

Motorola

33,916.3

1.9

40,269.1

2.3

HTC

32,121.8

1.8

43,266.9

2.4

Others

587399.6

33.6

595886.9

33.6

Total

1,746,175.6

100.0

1,775,712.0

100.0

         Source: Gartner

Samsung's resources and ability to build a broad market reach is an advantage that no other competitor can easily match. However, the competition will intensify in 2013 as players such as Sony and Nokia improve. “With Samsung commanding over 42.5% of the Android market globally, and the next vendor at just 6% share, the Android brand is being overshadowed by Samsung's brand with the Galaxy name nearly a synonym for Android phones in consumers' mind share,” said Gupta.

Apple’s sales reached 43.5 million units in the fourth quarter of 2012, up 22.6% year-on-year. In 2012, Apple totaled 130 million smartphone sales worldwide. While the demand for iPhones in the fourth quarter remained strong, consumers’ demand favoured the less expensive iPhone 4 and 4S models. The arrival of the iPad Mini also created a dilemma for some users when deciding if to upgrade an iPhone 4 or iPhone 4S to an iPhone 5, or buy the new tablet.

Huawei had a good fourth quarter, which helped it reach the No. 3 position among smartphone vendors for the first time. In 2012, Huawei sold 27.2 million smartphones to end users, up 73.8% from 2011.

In the smartphone operating system (OS) market Android captured more than half the market, widening the gap with Apple’s iOS. While Android grew 87.8% in the fourth quarter of 2012, BlackBerry declined 44.4% in the same period. Microsoft had a better fourth quarter, with its share growing 1.2 percentage points, and its smartphone sales increasing 124.2% year-on-year.

Worldwide Smartphone Sales to End Users by Operating System in 4Q12 (Thousands of Units)

Operating System

4Q12 Units

4Q12 Market Share (%)

4Q11 Units

4Q11 Market Share (%)

Android

144,720.3

69.7

77,054.2

51.3

iOS

43,457.4

20.9

35,456.0

23.6

BlackBerry

7,333.0

3.5

13,184.5

8.8

Microsoft

6,185.5

3.0

2,759.0

1.8

Bada

2,684.0

1.3

3,111.3

2.1

Symbian

2,569.1

1.2

17,458.4

11.6

Others

713.1

0.3

1,166.5

0.8

Total

207,662.4

100.0

150,189.9

100.0

         Source: Gartner

“2013 will be the year of the rise of the third ecosystem as the battle between the new BlackBerry10 and Widows Phone intensifies,” said Gupta. “As carriers and vendors feel the pressure of the strong Android’s growth, alternative operating systems such as Tizen, Firefox, Ubuntu and Jolla will try and carve out an opportunity by positioning themselves as profitable alternatives.”

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire and editor of sister publication CommsWire. He is also founder and Research Director of Connection Research, a market research and analysis firm specialising in the convergence of sustainable, digital and environmental technologies. He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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