Mobile phone sales dropped in 2012 for the first time in three years but the story is more about a market in transition than any kind of crisis.
Research out today from Gartner shows that despite strong gains in smartphone sales, the overall mobile phone market dipped by 1.7 percent to 1.746 billion units worldwide last year, down from 1.775 billion units in 2011. That’s a small drop percentagewise, but it’s a 29 million unit difference.
“Tough economic conditions, shifting consumer preferences and intense market competition weakened the worldwide mobile phone market this year,” said Anshul Gupta, principal research analyst at Gartner.
But the “shifting consumer preferences” Gupta mentioned would seem to me to bode well for the mobile phone market overall. In the fourth quarter of 2012, for instance, global feature phone sales fell by 19.3 percent to 264 million units, but smartphone sales jumped by 38.3 percent to 207million units. What that means is that even though smartphone sales rose considerably, the majority of mobile phone sales are still of feature phones so a decline in their sales cancels out the gains in smartphone sales. Gartner expects feature phone sales to continue to decline in 2013, thus further narrowing the gap between feature phone and smartphone sales.
Feature phones are basically just phones with a few added features such as voice mail, a camera and texting, though without a QWERTY keyboard – virtual or physical. A smartphone runs a unique mobile operating system and has a wide array of applications such as video conferencing, mobile banking, games, music and more.
The Gartner report reveals a number of other insights. For instance, while the top sellers ranked by operating system in the fourth quarter remain Google Android (70 percent market share) and Apple iOS (21 percent share), Microsoft Windows Phone grew its market share by two-thirds. It’s still a tiny 3 percent market share in the fourth quarter but it was just 1.8 percent in the fourth quarter of 2011. Microsoft introduced the new Windows Phone 8 (WP8) OS in the fourth quarter and Gartner noted that sales of Nokia smartphones that run WP8, such as the Lumia 920, were good, but didn’t share specific numbers. Overall sales of smartphones running Windows Phone totaled 6.19 million units in Q4 2012, just about double the 3.1 million units sold in Q4 2011, putting Microsoft in fourth place.
Third place went to BlackBerry OS with 7.3 million units sold in the fourth quarter of 2012, which was down significantly from 13.2 million units in the year ago quarter. BlackBerry, which recently changed its corporate name from Research in Motion, is another smartphone maker to watch going forward given that it has finally introduced the BB10 operating system and a pair of new BlackBerry smartphones running it, the Z10 and the Q10. BlackBerry suffered through a considerable sales drought over the last year due to delays in bringing BB10 to market.
Finally, when smartphone sales are ranked by manufacturer, China-based Huawei made a name for itself in the fourth quarter when it moved into third place behind Samsung and Apple. While Huawei’s sales grew 74% in all of 2012 to 27.2 million units, the brand is little known in the United States. When I checked the Web sites of the four major carriers serving the U.S., only T-Mobile listed a Huawei device as available to subscribers.
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