Gartner Says Smartphone Sales Accounted for 55 Percent of Overall Mobile Phone Sales in Third Quarter of 2013

Asia/Pacific led the growth in both markets - the smartphone segment with 77.3 percent increase and the mobile phone segment with 11.9 percent growth

Kuala Lumpur, 21 November 2013 — Worldwide mobile phone sales to end users totaled 455.6 million units in the third quarter of 2013, an increase of 5.7 percent from the same period last year, according to Gartner, Inc. Sales of smartphones accounted for 55 percent of overall mobile phone sales in the third quarter of 2013, and reached their highest share to date.

Worldwide smartphone sales to end users reached 250.2 million units, up 45.8 percent from the third quarter of 2012. Asia/Pacific led the growth in both markets - the smartphone segment with 77.3 percent increase and the mobile phone segment with 11.9 percent growth. The other regions to show an increase in the overall mobile phone market were Western Europe, which returned to growth for the first time this year, and the Americas.

“Sales of feature phones continued to decline and the decrease was more pronounced in markets where the average selling price (ASP) for feature phones was much closer to the ASP affordable smartphones,” said Anshul Gupta, principal research analyst at Gartner. “In markets such as China and Latin America, demand for feature phones fell significantly as users rushed to replace their old models with smartphones.”

Gartner analysts said global mobile phone sales are on pace to reach 1.81 billion units in 2013, a 3.4 percent increase from 2012. “We will see several new tablets enter the market for the holiday season, and we expect consumers in mature markets will favor the purchase of smaller-sized tablets over the replacement of their older smartphones” said Mr. Gupta.

While Samsung’s share was flat in the third quarter of 2013, Samsung increased its lead over Apple in the global smartphone market (see Table 1). The launch of the Samsung Note 3 helped reaffirm Samsung as the clear leader in the large display smartphone market, which it pioneered.

Lenovo’s sales of smartphones grew to 12.9 million units, up 84.5 percent year-on-year. It constantly raised share in the Chinese smartphone market.

Apple’s smartphone sales reached 30.3 million units in the third quarter of 2013, up 23.2 percent from a year ago. “While the arrival of the new iPhones 5s and 5c had a positive impact on overall sales, such impact could have been greater had they not started shipping late in the quarter. While we saw some inventory built up for the iPhone 5c, there was good demand for iPhone 5s with stock out in many markets,” said Mr. Gupta.

Table 1

Worldwide Smartphone Sales to End Users by Vendor in 3Q13 (Thousands of Units)

Company	3Q13 Units	3Q13 Market Share (%)	3Q12 Units	3Q12 Market Share (%)
Samsung	80,356.8	32.1	55,054.2	32.1
Apple	30,330.0	12.1	24,620.3	14.3
Lenovo	12,882.0	5.1	6,981.0	4.1
LG Electronics	12,055.4	4.8	6,986.1	4.1
Huawei	11665.7	4.7	7,804.3	4.5
Others	102941.8	41.1	70206.8	40.9
Total	250,231.7	100.0	171,652.7	100.0

Source: Gartner (November 2013)

In the smartphone operating system (OS) market (see Table 2), Android surpassed 80 percent market share in the third quarter of 2013, which helped extend its leading position. “However, the winner of this quarter is Microsoft which grew 123 percent. Microsoft announced the intent to acquire Nokia’s devices and services business, which we believe will unify effort and help drive appeal of Windows ecosystem,” said Mr. Gupta. Forty-one per cent of all Android sales were in mainland China, compared to 34 percent a year ago. Samsung is the only non-Chinese vendor in the top 10 Android players ranking in China. Whitebox Yulong is the third largest Android vendor in China with a 9.7 percent market share in the third quarter of 2013. Xiaomi represented 4.3 percent of Android sales in the third quarter of 2013, up from 1.4 percent a year ago.

Table 2

Worldwide Smartphone Sales to End Users by Operating System in 3Q13 (Thousands of Units)

Operating System	3Q13  Units	3Q13 Market Share (%)	3Q12  Units	3Q12 Market Share (%)
Android	205,022.7	81.9	124,552.3	72.6
iOS	30,330.0	12.1	24,620.3	14.3
Microsoft	8,912.3	3.6	3,993.6	2.3
BlackBerry	4,400.7	1.8	8,946.8	5.2
Bada	633.3	0.3	4,454.7	2.6
Symbian	457.5	0.2	4,401.3	2.6
Others	475.2	0.2	683.7	0.4
Total	250,231.7	100.0	171,652.7	100.0

Source: Gartner (November 2013)

Mobile Phone Vendor Perspective

Samsung: Samsung extended its lead in the overall mobile phone market, as its market share totaled 25.7 percent in the third quarter of 2013 (see Table 3). “While Samsung has started to address its user experience, better design is another area where Samsung needs to focus,” said Mr. Gupta. “Samsung's recent joint venture with carbon fiber company SGL Group could bring improvements in this area in future products.”

Nokia: Nokia did better than anticipated in the third quarter of 2013, reaching 63 million mobile phones, thanks to sales of both Lumia and Asha series devices. Increased smartphone sales supported by an expanded Lumia portfolio, helped Nokia move up to the No. 8 spot in the global smartphone market. But regional and Chinese Android device manufacturers continued to beat market demand, taking larger share and creating a tough competitive environment for Lumia devices.

Apple:  Gartner believes the price difference between the iPhone 5c and 5s is not enough in mature markets, where prices are skewed by operator subsidies, to drive users away from the top of the line model. In emerging markets, the iPhone 4S will continue to be the volume driver at the low end as the lack of subsidy in most markets leaves the iPhone 5c too highly priced to help drive further penetration.

Lenovo: Lenovo moved to the No. 7 spot in the global mobile phone market, with sales reaching approximately 13 million units in the third quarter of 2013. “Lenovo continues to rely heavily on its home market, which represents more than 95 per cent of its overall mobile phone sales. This could limit its growth after 2014, when the Chinese market is expected to decelerate,” said Mr. Gupta.

Table 3

Worldwide Mobile Phone Sales to End Users by Vendor in 3Q13 (Thousands of Units)

Company	3Q13 Units	3Q13 Market Share (%)	3Q12 Units	3Q12 Market Share (%)
Samsung	117,053.8	25.7	97,956.8	22.7
Nokia	63,048.4	13.8	82,300.6	19.1
Apple	30,330.0	6.7	24,620.3	5.7
LG Electronics	18,030.7	4.0	13,968.8	3.2
ZTE	13,696.4	3.0	16,605.9	3.9
Huawei	13,574.4	3.0	11,918.9	2.8
Lenovo	12,999.8	2.9	7,203.7	1.7
TCL Communication	12,345.6	2.7	9,326.7	2.2
Sony Mobile Communications	9,757.5	2.1	8,202.4	1.9
Yulong	8,801.0	1.9	5,218.5	1.2
Others	156,004.7	34.2	153,701.20	35.7
Total	455,642.3	100.0	431,023.8	100.0

Source: Gartner (November 2013)

Gartner Says Asia Pacific Smartphone Sales Grew 74.1 Percent in Second Quarter of 2013 and Exhibited the Highest Growth Rate in the Region

Worldwide Mobile Phone Sales Grew 3.6 Percent in Second Quarter of 2013 Microsoft Has Become the No. 3 Smartphone OS Overtaking BlackBerry

Kuala Lumpur, 20 August 2013 — Asia/Pacific, Latin America and Eastern Europe exhibited the highest smartphone growth rates of 74.1 percent, 55.7 percent and 31.6 percent respectively, as smartphone sales grew in all regions, according to Gartner, Inc.

Worldwide mobile phone sales to end users totaled 435 million units in the second quarter of 2013, an increase of 3.6 percent from the same period last year. Worldwide smartphone sales to end users reached 225 million units, up 46.5 percent from the second quarter of 2012. Sales of feature phones to end users totaled 210 million units and declined 21 percent year-over-year.

“Smartphones accounted for 51.8 percent of mobile phone sales in the second quarter of 2013, resulting in smartphone sales surpassing feature phone sales for the first time,” said Anshul Gupta, principal research analyst at Gartner.

Samsung maintained the No. 1 position in the global smartphone market, as its share of smartphone sales reached 31.7 percent, up from 29.7 percent in the second quarter of 2012 (see Table 1). Apple’s smartphone sales reached 32 million units in the second quarter of 2013, up 10.2 percent from a year ago.

Table 1

Worldwide Smartphone Sales to End Users by Vendor in 2Q13 (Thousands of Units)

Company	2Q13 Units	2Q13 Market Share (%)	2Q12 Units	2Q12 Market Share (%)
Samsung	71,380.9	31.7	45,603.8	29.7
Apple	31,899.7	14.2	28,935.0	18.8
LG Electronics	11,473.0	5.1	5,827.8	3.8
Lenovo	10,671.4	4.7	4,370.9	2.8
ZTE	9,687.6	4.3	6,331.4	4.1
Others	90,213.6	40.0	62,704.0	40.8
Total	225,326.2	100.0	153,772.9	100.0

Source: Gartner (August 2013)

In the smartphone operating system (OS) market (see Table 2), Microsoft took over BlackBerry for the first time, taking the No. 3 spot with 3.3 percent market share in the second quarter of 2013. “While Microsoft has managed to increase share and volume in the quarter, Microsoft should continue to focus on growing interest from app developers to help grow its appeal among users,” said Mr. Gupta. Android continued to increase its lead, garnering 79 percent of the market in the second quarter.

Table 2

Worldwide Smartphone Sales to End Users by Operating System in 2Q13 (Thousands of Units)

Operating System	2Q13  Units	2Q13 Market Share (%)	2Q12  Units	2Q12 Market Share (%)
Android	177,898.2	79.0	98,664.0	64.2
iOS	31,899.7	14.2	28,935.0	18.8
Microsoft	7,407.6	3.3	4,039.1	2.6
BlackBerry	6,180.0	2.7	7,991.2	5.2
Bada	838.2	0.4	4,208.8	2.7
Symbian	630.8	0.3	9,071.5	5.9
Others	471.7	0.2	863.3	0.6
Total	225,326.2	100.0	153,772.9	100.0

Source: Gartner (August 2013)

Mobile Phone Vendor Perspective

Samsung: Samsung remained in the No. 1 position in the overall mobile phone market, with sales to end users growing 19 percent in the second quarter of 2013 (see Table 3). “We see demand in the premium smartphone market come mainly from the lower end of this segment in the $400-and-below ASP mark. It will be critical for Samsung to step up its game in the mid-tier and also be more aggressive in emerging markets. Innovation cannot be limited to the high end,” said Mr. Gupta.

Nokia: Slowing demand of feature phone sales across many markets worldwide, and fierce competition in the smartphone segment, affected Nokia’s mobile phone sales in the second quarter of 2013. Nokia’s mobile phone sales totaled 61 million units, down from 83 million units a year ago. Nokia’s Lumia sales grew 112.7 percent in the second quarter of 2013 thanks to its expanded Lumia portfolio, which now include Lumia 520 and Lumia 720. “With the recent announcement of the Lumia 1020, Nokia has built a wide portfolio of devices at multiple price points, which should boost Lumia sales in the second half of 2013,” said Mr. Gupta. “However, Nokia is facing tough competition from Android devices, especially from regional and Chinese manufacturers which are more aggressive in terms of price points.”

Apple: While sales continued to grow, the company faced a significant drop in the ASP of its smartphones. Despite the iPhone 5 being the most popular model, its ASP declined to the lowest figure registered by Apple since the iPhone's launch in 2007. The ASP reduction is due to strong sales of the iPhone 4, which is sold at a strongly discounted price. “While Apple’s ASP demonstrates the need for a new flagship model, it is risky for Apple to introduce a new lower-priced model too,” said Mr. Gupta. “Although the possible new lower-priced device may be priced similarly to the iPhone 4 at $300 to $400, the potential for cannibalization will be much greater than what is seen today with the iPhone 4. Despite being seen as the less expensive sibling of the flagship product, it would represent a new device with the hype of the marketing associated with it.”

Lenovo: Lenovo’s mobile phone sales grew 60.6 percent to reach 11 million units in the second quarter of 2013. Lenovo’s quarter performance was bolstered by smartphone sales. Its smartphone sales grew 144 percent year-over-year and helped it rise to the No. 4 spot in the worldwide smartphone market for the first time. Lenovo continues to rely heavily on its home market in China, which represents more than 95 percent of its sales. It remains challenging for Lenovo to expand outside China as it has to strengthen its direct channel as well as its relationships with communications service providers.

Table 3

Worldwide Mobile Phone Sales to End Users by Vendor in 2Q13 (Thousands of Units)

Company	2Q13 Units	2Q13 Market Share (%)	2Q12 Units	2Q12 Market Share (%)
Samsung	107,526.0	24.7	90,432.1	21.5
Nokia	60,953.7	14.0	83,420.1	19.9
Apple	31,899.7	7.3	28,935.0	6.9
LG Electronics	17,016.4	3.9	14,345.4	3.4
ZTE	15,280.7	3.5	17,198.2	4.1
Huawei	11,275.1	2.6	10,894.2	2.6
Lenovo	10,954.8	2.5	6,821.7	1.6
TCL Communication	10,134.3	2.3	9,355.7	2.2
Sony Mobile Communications	9,504.7	2.2	7,346.8	1.7
Yulong	7,911.5	1.8	4,016.2	1.0
Others	152,701.5	35.1	147,354.60	35.1
Total	435,158.4	100.0	420,120.0	100.0

Source: Gartner (August 2013)

“With second quarter of 2013 sales broadly on track, we see little need to adjust our expectations for worldwide mobile phone sales forecast to total 1.82 billion units this year. Flagship devices brought to market in time for the holidays, and the continued price reduction of smartphones will drive consumer adoption in the second half of the year,” said Mr. Gupta.