Slowdown in demand from Asia was the primary reason worldwide sales of mobile phones declined 2 percent in the first quarter of 2012–the first dip in nearly three years, according to latest figures from Gartner. Amid the softer sales, Samsung overtook Nokia to become the top handset vendor and also regained its number one spot from Apple in smartphones.
In a report Wednesday, research firm Gartner said global sales for the quarter ended March dropped for the first time since the second quarter of 2009, to reach 419.1 million units. “Global sales of mobile devices declined more than expected due to a slowdown in demand from the Asia-Pacific region,” said principal research analyst, Anshul Gupta.
“The first quarter, traditionally the strongest quarter for Asia–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,” Gupta added.
Annette Zimmermann, principal research analyst at Gartner, also noted: “The lower results in the first quarter of 2012 have led us to be cautious about sales for the remainder of the year.
“The continued rollout of 3G-based smartphones by local and regional manufacturers such as Huawei, ZTE, Lenovo, Yulong and TCL Communication, should help spur demand in China,” Zimmermann. “In addition, the arrival of new products in mature markets based on new versions of the Android and Windows Phone operating systems (OSes), and the launch of the Apple iPhone 5 will help drive a stronger second half in Western Europe and North America.”
“However, as we are starting to update our market forecast we feel a downward adjustment to our 2012 figures, in the range of 20 million units, is unavoidable,” she said.
Samsung takes smartphone, overall lead
South Korean handset maker Samsung had a good quarter despite the industry’s poor performance, increasing its market share to 20.7 percent from 16.1 percent from a year ago.
It was the top mobile phone seller for the first three months of 2012, taking the position from Nokia which had held the title since 1998 and saw its market share dip to 19.8 percent. For the quarter, Samsung sold 86.6 million mobile phones, a 25.9 percent increase from the previous year. This followed reports in April it had taken the lead based on initial estimates.
Samsung also reclaimed the number one spot from in the smartphone market Apple. It sold 38 million Internet-compatible handsets in the quarter, more than double that of Apple iPhone sales of 17.4 million units.
BlackBerry maker Research In Motion saw its share of the smartphone market cut by almost half to 6.9 percent. RIM sold 9.9 million devices in the quarter, down from 13 million a year earlier, as competitors encroached in markets around the world, Gartner said.
Android OS lead widens
In the smartphone OS market, Android accounted for more than half of all smartphone sales, with a market share of 56.1 percent in the first quarter of 2012.
According to Gartner, the smartphone market had become highly commoditised and differentiation was becoming a challenge for manufacturers. Gupta said: “This is particularly true for smartphones based on the Android OS, where a strong commoditisation trend is at work and most players are finding it hard to break the mould.
“At the high end, hardware features coupled with applications and services are helping differentiation, but this is restricted to major players with intellectual property assets. However, in the mid to low-end segment, price is increasingly becoming the sole differentiator,” he added.
The Gartner analyst said this would only worsen with the entry of new players and the dominance of Chinese manufacturers, leading to increased competition, low profitability and scattered market share.
Samsung sold more than 40 percent of the Android-based smartphones bought in the first quarter of this year, according to Gartner.