Mobile sales dip ahead of iPhone 5

Worldwide mobile phone sales declined 2.3% in the second quarter of 2012, compared to the same quarter in 2011, according to the latest figures from research firm Gartner.

Anshul Gupta, principal research analyst at Gartner, says: “The challenging economic environment and users postponing upgrades to take advantage of high-profile device launches and promotions available later in the year slowed demand across markets. Demand for feature phones continued to decline, significantly weakening the overall mobile phone market.”

A total of 419 million units were sold in the second quarter, with smartphone sales accounting for 36.7% of total sales (a 42.7% increase, compared to the second quarter of 2011). The smartphone market is expected to be bolstered by the highly anticipated launch of the next-generation iPhone and other major device launches by other manufacturers in the second half of the year. Gupta adds that the feature phone market will continue to see a decline.

In terms of overall market share, Samsung remains dominant, with a 29.5% increase, compared to the same quarter last year, extending its lead on both Apple and Nokia. Samsung's growth is attributed to the record sales of its Galaxy smartphone range (with smartphones accounting for 50.4% of all Samsung mobile sales).

“Demand for the new Galaxy S III was particularly strong, exceeding Samsung's own expectations, with a reported 10 million units reached in the two months after its release. The Galaxy S III was the best-selling Android product in the quarter and could have been higher, but for product shortages,” says Gartner.

Gupta adds: "In the race to be top smartphone manufacturer in 2012, Samsung has consistently increased its lead over Apple, and its open OS market share increased to one-and-a-half times that of Apple's in the second quarter of 2012."

While Galaxy sales soared on the back of the S III launch, Apple iPhone sales unsurprisingly weakened as the hype builds around the iPhone 5. Gartner says while iPhone sales have increased 47% year-on-year, sales dropped 12.6% from the first quarter.

“Depending on the exact launch date of the new iPhone, Apple might experience another weaker-than-usual quarter in the third quarter of 2012, while Apple will be ready to take advantage of the strong holiday sales in North America and Western Europe that have historically remained immune to economic pressure.”

According to Gartner, Android's market lead has increased by 20.7% from the first quarter and currently sits at 64% in total. Apple's iOS has declined 3.7% from the first quarter, with 18.8% market share overall. Gartner says the iPhone 5 is expected to provide the “greatest upgrade opportunity yet”, as Apple is expected to reveal a new design and other significant changes to the form factor.

Nokia continues to see a decline in its market share in the face of increased competition. Gartner says Nokia phone sales declined 14.8% in the second quarter. The feature phone market remains vital for Nokia, as Gartner explains: “Nokia succeeded, to a certain extent, in winning feature phone market share as its sales grew quarter-on-quarter.”

Nokia's Lumia devices are, however, struggling to gain traction in the smartphone market as Android continues to dominate in both market and mind share.

Locally, the recent Mobile Consumer in SA 2012 report, by World Wide Worx, shows that, despite their decline in the global mobile market, Nokia and BlackBerry are still thriving in SA.

“Nokia remains far and away the most popular cellphone brand among South Africans aged 16 and over, living in cities and towns,” says the report, adding that Nokia has 50% of the South African mobile market.

“Nokia is expected to remain the number one cellphone brand in SA through to the end of 2013, but with a slightly diminished market share.”

BlackBerry has also grown its local footprint, from 4% to 18%, while Samsung has dropped from 28% to 18% over the last 18 months. MD of World Wide Worx, Arthur Goldstuck, says the demise of BlackBerry in SA (as in other developing markets) remains a myth. Sixteen percent of local mobile users also indicated they intend to buy a BlackBerry handset next.

“BlackBerry's continued strength lies in its appeal to the younger market, with the Curve models maintaining a 'cool' image. In the 16 to 25 age group, the brand has 28% market share.

“Despite the wealthy top end of the market abandoning BlackBerry for the iPhone and the new Samsung Galaxy S III, this does not translate into significant market share for Apple or Samsung, as BlackBerry remains dominant in the smartphone segment,” says Goldstuck.

According to World Wide Worx, the iPhone remains a “toy of the elite” in SA with just 1% market share. The iPhone did, however, grab the greatest future brand momentum in the survey, with a six-fold increase in market share expected in the next 18 months.

“This is double the brand momentum indicated for the iPhone at the end of 2010, but the intended purchasing activity at the time, which should have given Apple 3% market share, simply did not materialise," says Goldstuck. "This shows the extent to which the iPhone remains an aspirational phone, but one that is out of reach, while the BlackBerry represents a reachable aspiration."

Please click here to view: Worldwide Mobile Device Sales to End Users by Vendor in 2Q12 (Thousands of Units)

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