Mobile Phone Sales Drop For First Time Since 2009

By Joann Fan email: , Feb 13, 2013 10:49 AM EST

Smartphones have surged to prominence in the the mobile market, which should be obvious to anyone who has seen the sheer number of people bent over their phones, surfing the web and updating their social networks. In 2012, over 712 million smartphone units were sold (Apple and Samsung dominating in this sector with 51.3 percent of total sales according to a Gartner report). Compared the 491 million sold in 2011, this is a 47 percent increase.

In contrast, the mobile market's sales overall dropped 1.7 percent from nearly 1.78 billion units sold in 2011, down to 1.75 billion in 2012 according to Gartner's latest mobile report. This is the first time since 2009 that sales of mobile phones decreased.

Samsung is second only to Apple in the smartphone market. Its massive surge in all sectors very likely a result of its aggressive (and very expensive) research campaigns. Their research and diversity paid off, however. It sits as the number one mobile phone vendor, with a comfortable 23.7 percent of the total market share.

Apple controlled 19.1 percent, or 136.8 million units, of the smartphone market with its iPhones, but their single product line offers fewer options than the numerous models Samsung (30.3 percent of smartphones, or 215.8 million units) has available.

Huawei, a Chinese company, took a distant third place in the 4th Quarter with 27.2 million smartphones sold, Gartner reported. This is a 74 percent increase from 2011.

Last April, Samsung unseated Nokia as the top seller of mobile phones, ending a 14-year run by Nokia after it took down Motorola in 1997. Samsung shipped 92 million units in the first quarter, compared to Nokia's 83 million.

Nokia reached its peak in 2007, shipments plummeting by almost 30 percent right after Apple's first iPhone went on sale, CNN reported. Even worse - in April, S&P downgraded NOK debt rating to "junk" after its poor showing.

But compared to the two giants at the top, no company can safely claim the third spot, Anshul Gupta, the principal research analyst at Gartner, said in a statement. "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."

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