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Smartphones To Finally Outsell Feature Phones In 2013

Gartner says the world is on pace to sell about 1.9 billion mobile phones this year, with smartphones accounting for 1 billion of that.

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It is possible that the world will reach a major turning point this year. The latest numbers from Gartner suggest that smartphones will outsell feature phones globally for the first time by the end of the year.

Gartner thinks the world is on pace to sell about 1.9 billion mobile phones this year, with smartphones accounting for 1 billion and feature phones accounting for the remaining 900 million. The tide will likely not switch until the second half of the year.

Looking at the numbers from 2012, the trend is evident. The worldwide cell phone market contracted during 2012, but it is set to rebound in 2013. Actual device sales to end users totaled 1.75 billion, which is 1.7% lower than 2011. During the fourth quarter, sales of feature phones numbered 264.4 million. That's a steep 19.3% drop year-over-year. At the same time, sales of smartphones during the fourth quarter rocketed up 38.3% year-over-year to 207.7 million.

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During the fourth quarter, feature phones accounted for 56% of all device sales, with smartphones trailing at 44%. The gap between these two numbers, however, has been shrinking for years now. In the U.S., for example, top-tier carriers such as AT&T and Verizon Wireless report that smartphones account for as much as 75% of all device sales. The bulk of feature phones are sold in emerging markets. It is these markets where the proliferation of inexpensive smartphones will have the greatest impact.

The coming global dominance of smartphones means the battle between platforms and hardware makers for supremacy has even wider implications. Gartner confirmed, just as Strategy Analytics and Canalys did earlier this year, that Apple and Samsung largely own the smartphone market. In the fourth quarter of 2012, Apple and Samsung together held 52% of the smartphone market, up from 46.4% in the third quarter. Samsung is the world's largest vendor of smartphones, and Apple ranks second.

The number-three spot is anyone's game, though. "There is no manufacturer that can firmly lay claim to the number three spot in global smartphone sales," said Anshul Gupta, principal research analyst at Gartner. "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 other words, whatever company lands in the number-three spot isn't necessarily competing with Apple and Samsung.

Gartner's numbers back up previous reports that named Huawei as the world's third-largest provider of smartphones. In 2012, Huawei sold 27.2 million smartphones to end users, up 73.8% from the previous year.

According to IDC, Huawei saw 89.5% growth year-over-year as it managed to ship 10.8 million smartphone during the fourth quarter of 2012. That's still far behind Samsung's shipments of 63.7 million and Apple's shipments of 47.8 million for the same period.

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User Rank: Strategist
2/14/2013 | 4:01:17 PM
re: Smartphones To Finally Outsell Feature Phones In 2013
I have to wonder how long this will continue? With many Countries still having a weak income average and a lot of people rethinking the costs of data plans. I myself included. I would have to seriously rethink my next phone purchase. As I don't really think in general I "need" a smartphone. I certainly wanted one when I bought my first one a year and half ago. But since then I have to say its not as useful as I had expected.
I most certainly would not buy anything in a smartphone that was in the price range of a iPhone or Samsung Galaxy line.
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