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Gartner: Smartphones finally outsold feature phones in 2013

updated 12:19 am EST, Fri February 14, 2014

Low-end smartphone segment expected to boom in 2014

A new Gartner report summarizing the state of the smartphone industry at the end of 2013 notes that sales of smartphones finally overtook sales of "feature phones" worldwide, accounting for 53.6 percent of all mobile phone sales. The total number of smartphones sold to retailers was 968 million, and of that figure some 150 million were iPhones, by far the largest "single brand." Samsung, however, is believed to have sold just under double that figure across all its brands.



Smartphone sales overall grew 36 percent in the last quarter of the year, accounting for 57.6 percent of mobile sales for that quarter. The biggest growth areas, according to Gartner, were Latin America, the Middle East and Africa (as a region), the Asia-Pacific market, and Eastern Europe. The top individual country was India, which saw 166.8 percent growth in sales in the fourth quarter compared to the year-ago quarter. Among regions, Latin America saw a near-doubling of growth in the fourth quarter, making it the fastest-growing region (China saw 86.3 percent growth in that same period).

All this growth was dampened somewhat by fourth quarter declines in more mature markets, echoing a recent report. Consumers, argued analyst Anshul Gupta, aren't replacing their smartphones as often as they did when each new year brought rafts of major new features. "Lack of compelling hardware innovation has further exacerbated replacement cycles for high-end smartphones ... because consumers don't find enough reasons to upgrade."



By vendor, Apple was the second-biggest seller of smartphones, behind Samsung. Interestingly, both Apple and Samsung lost some marketshare in the fourth quarter of 2013 compared to the year ago quarter, while almost all other of the top vendors rose in share. Gartner's explanation is that the premium smartphone market that Apple and Samsung most strongly compete in is very saturated, while the "mid-range" line of more affordable but less powerful smartphones is growing significantly, particularly in developing markets where income levels are much lower than in first-world countries.

Gartner expects most smartphone companies other than Apple to focus on the lower-end smartphone market, which will likely see the largest growth in 2014 as users who have been using feature phones upgrade. The trend, while bad for Apple's share of the general "smartphone" market worldwide, will likely further differentiate Apple's premium smartphones from the rest of the market, and continue Apple's lead in that segment. However, the trend will again put pressure on Apple to come with a lower-end or mid-range smartphone to compete more in that portion of the market.



By operating system, Android continues to dominate by virtue of being able to market to all possible price points. It has now reached around 78 percent, at least in shipments (sales to end users are harder to determine, as companies other than Apple don't report such figures). Apple's share declined in 2013 from 19.1 percent to 15.6 percent, even as its share in the US and China continued to increase in 2013 overall (despite drops in the fourth quarter over the last two years).

When feature phones are included in the figures, Nokia emerges as the second most-popular vendor of phones, with Apple in third place (but more than double the numbers shown by fourth-place LG). Apple's worldwide share of all mobile phone sales grew to 8.3 percent (from 2012's 7.5 percent, while Samsung grew from 22 percent to 24.6 percent, with Nokia losing share from 2012 down to 13.9 percent (from 19.1 percent in 2012).





By Electronista Staff
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