Mobile phone sales decline, smartphones driving growth

16 May 2012

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Analysis of quarter one sales of mobile devices show an overall decline, but the smartphone market is driving growth, with Samsung at peak performance while Nokia and RIM trail behind.

Worldwide sales of mobile phones declined 2pc in the first quarter of 2012, with the sale of 419.1m units, marking the first year-on-year decline since the second quarter of 2009.

The figures come from the report ‘Market Share: Mobile Devices, Worldwide, 1Q12’ from IT research and advisory company Gartner.

Anshul Gupta, principal research analyst at Gartner, puts the unexpected decline down to a slowing demand for mobile devices in the Asia/Pacific region. “The first quarter, traditionally the strongest quarter for Asia (which is driven by Chinese New Year), saw a lack of new product launches from leading manufacturers, and users delayed upgrades in the hope of better smartphone deals arriving later in the year,” he said.

Stronger second quarter expected

“The continued roll out of 3G-based smartphones by local and regional manufacturers such as Huawei, ZTE, Lenovo, Yulong and TCL Communication should help spur demand in China. In addition, the arrival of new products in mature markets based on new versions of the Android and Windows Phone operating systems, and the launch of the Apple ‘iPhone 5’ will help drive a stronger second half in Western Europe and North America,” said Annette Zimmermann, principal research analyst at Gartner.

However, these low results from quarter one are leading the firm to be cautious about sales for the remainder of the year. “As we are starting to update our market forecast we feel a downward adjustment to our 2012 figures, in the range of 20m units, is unavoidable,” Zimmerman added.

Samsung coming out on top all round

That said, one particular manufacturer saw excellent results from this quarter. Samsung became the world’s No 1 mobile handset vendor, knocking Nokia off the top spot it had held since 1998, and also took back the No 1 smartphone position from Apple, selling 38m smartphones worldwide.

What’s more, Samsung’s Android-based smartphone sales in this period represented more than 40pc of Android sales globally, while no other vendors achieved more than a 10pc market share.

Smartphone market driving growth, but competition is increasing

In the smartphone market, Android accounted for more than half of all sales (56.1pc), but Gartner analysts say the market is now more challenging for manufacturers due to increased commoditisation and differentiation.

One manufacturer struggling in this environment is RIM, which sold 9.9m mobile handsets this quarter, marking a decline in its global share to just 2.4pc. “RIM desperately needs to deliver winning BB10 products to retain users and stay competitive,” said Gupta, adding, “This will be very challenging, because BB10 lacks strong developer support, and a new BB10 device will only be available in the fourth quarter of 2012.”

Smartphones are still a key driver in the mobile device market, reaching sales of 144.4m units in the first quarter of this year, a 44.7pc year-on-year increase. Samsung and Apple fared best, with a combined share of 49.3pc, while Nokia saw its share drop to 9.2pc.

“Smartphone sales are becoming of paramount importance at a worldwide level. For example, smartphone volumes contributed to approximately 43.9pc of overall sales for Samsung as opposed to 16pc for Nokia,” said Gupta.

Elaine Burke is managing editor of Siliconrepublic.com

editorial@siliconrepublic.com