Smartphones Outsell Feature Phones for First Time

Smartphone sales in the second quarter outpaced those of feature phones, the first time that has happened, according to a report published Wednesday.

Smartphones accounted for 51.8% of mobile phone sales globally,research firm Gartner said in the report. The growth, up 46.5% compared with the same quarter last year, is driven by sales in the sub-$100 Android market, said Anshul Gupta, principal research analyst at Gartner. Basic phones that don’t carry the same level as technology as a smartphone are characterized as feature phones.

“We have seen that smartphones are starting from around $60 in 2013,” Gupta  said. “That was not the case in the same quarter in 2012; then it was $120 or maybe even higher. The gap between average feature-phone price and low-cost smartphone price has really closed in the last couple of quarters.”

This has helped push Google’s Android market share from 64.2% in the second quarter to just (79% in 2013. Apple‘s share slipped from 18.8% to 14.2% in the same period.

According to Gartner, Asia/Pacific, Latin America and Eastern Europe had the highest smartphone growth rates of 74.1%, 55.7% and 31.6%, respectively, compared with the same quarter in 2012.

In possibly the only good news for Nokia, Microsoft’s Windows Phone operating system grew to 3.3%, passing BlackBerry, which saw its already small market share halved to just 2.7%. However, Nokia’s once mighty Symbian suffered an even more precipitous collapse, falling from 5.9% to just 0.3% in the same period.

According to Mr. Gupta, the explosive growth in the very bottom end of the market is problematic for Nokia. “If you compare Nokia to other players that are both feature phone and smartphone makers, Nokia is very exposed,” he said. “The growth in smartphones is coming from emerging markets. Nokia still does not have a full portfolio to meet users’ demand.”

He said Apple faces the same problem. “We are expecting then to enter a lower end device to help them penetrate into emerging markets, but will that really help them?” Apple is expected to announce a new,  lower-priced iPhone at an event on Sept. 10.

Samsung is the big winner, further entrenching its position as the world’s largest mobile phone maker. Its sales of smartphones grew 56%, and the company now accounts for nearly one in every three smartphone sales.

SOURCE: http://stream.wsj.com