Mobile phone sales declined in 2012: Gartner

The global mobile phone sales to end users reached 1.75 billion units in 2012, thereby registering a 1.7 percent decline from 2011, as per latest figures from Gartner.

The global mobile phone sales to end users reached 1.75 billion units in 2012, thereby registering a 1.7 percent decline from 2011, as per latest figures from Gartner. According to the report, smartphones continued to drive overall mobile phone sales. The fourth quarter of 2012 saw record smartphone sales of 207.7 million units, moving up 38.3 percent 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.” 


Gartner reveals that the demand for feature phones remained weak in 2012, particularly in the fourth quarter. Feature phone sales totalled 264.4 million units in the fourth quarter of 2012, down 19.3 percent year-on-year. Gartner analysts expect feature phones sales to continue to fall in 2013. 

 Mobile phone sales declined in 2012: Gartner

Smartphones drove overall mobile sales (Image Credit: Getty Images)



For the current year, Gartner has predicted that worldwide smartphone sales to end users will be close to one billion units. Overall mobile phone sales to end users are estimated to reach 1.9 billion units. 


In the fourth quarter of 2012, technology giants Apple and Samsung raised their worldwide smartphone market share to 52 percent from 46.4 percent in the third quarter of 2012. Samsung ended the year in the top 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.” 


Huawei had a good fourth quarter, which helped it reach the third position among smartphone vendors for the first time. In 2012, Huawei sold 27.2 million smartphones to end users, up 73.8 percent from 2011. Huawei aims to increase its profit margins in mobile phone sales with the Ascend D2 and the Mate announced at this year’s Consumer Electronics Show (CES). Huawei also seeks to brand these two models as premium products. Gartner analysts said international markets are the key for Huawei’s growth in 2013, as well as the ability to improve its product mix to a higher tier. 


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


The report adds that "Samsung's resources and ability to build a broad market reach is an advantage that no other competitor can easily match". However, competition will intensify in 2013 as players such as Sony and Nokia improve. “With Samsung commanding over 42.5 percent of the Android market globally, and the next vendor at just 6 percent 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 percent year-on-year. In 2012, Apple totalled 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 users who wished to upgrade to the iPhone 5. 


In the fourth quarter of 2012, Nokia’s handset sales rose due to a good response to its Asha mobile phones and the launch of the latest Lumia Windows Phone 8 models. It was not sufficient to stop Nokia to lose further market share, totalling 18 percent, the lowest it has ever been. In 2012, Nokia reached 39.3 million smartphone sales worldwide, down 53.6 percent from 2011. Analysts said that aside from the continued focus on Lumia, Nokia needs to build on momentum around Asha in 2013 by adding devices and apps to further enhance its overall value proposition and, in doing so, moving up the price point slightly to achieve better margins breaching the gap left by Symbian. 


In the smartphone operating system (OS) market, Android captured more than 50 percent of the OS market, widening the gap with Apple’s iOS. While Android grew 87.8 percent in the fourth quarter of 2012, RIM declined 44.4 percent 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 percent year-on-year. 


“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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