Mobile Phone Sales Decline For First Time Since 2009

Worldwide mobile phone sales decreased by 1.2 percent during 2012, the first time that the market has contracted since 2009, according to Gartner.

The slump was blamed on declining demand for feature phones, but smartphone sales remained strong, with record sales witnessed in the fourth quarter.

Total sales of mobile phones were 1.75 billion last year, but analysts predict that this number will increase to 1.9 billion next year. Gartner says that demand for feature phones will continue to slide in 2013, but smartphones will continue to drive the market, with close to one billion units sold.

Mobile phone sales

“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.”

Apple and Samsung continue to dominate the high-end market and now control 52 percent of worldwide smartphone sales. Samsung sold 384.6 million mobile phones during 2012, 53 percent of which were smartphones.

This was enough to be the largest player in both the smartphone and mobile phone markets, with analysts commenting that Samsung had a broad market reach that no other manufacturer could reach.

Apple was second in the smartphone table, shifting 130 million smartphones during 2012, but Huawei secured third place in the fourth quarter of 2012 thanks to its products increasingly being perceived as premium devices.

Brand perception

“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,” added Gupta.

Nokia, till recently the leader in phones and smartphones, continued to lose market share, despite a favourable reception for both its Asha range of feature phones and Windows Phone 8-based Lumia smartphones. Nokia’s smartphone sales were down 53.6 percent from 2011, with Gartner suggesting that it should increase its margins on Asha handsets to improve profitability.

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