Apple Losing Share as Global Smartphone Sales Top Feature Phone Sales for First Time

24/7 Wall St.

Global mobile phone sales totaled 435 million units in the second quarter of 2013, and of that total, some 225 million units, or 51.8%, were smartphones. That is the first time that smartphone sales have ever surpassed sales of feature phones, according to research firm Gartner Inc. (IT).

By smartphone handset manufacturer, Samsung Electronics extended its market share lead to 31.7% of the global market, up from 29.7% a year ago, while Apple Inc. (AAPL) saw its handset share shrink to 14.2%, down from 18.8% in the second quarter a year ago.

Smartphone sales grew fastest in the Asia/Pacific region, up 74.1%, followed by an increase of 55.7% in Latin America and 31.6% in Eastern Europe.

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The Android operating system from Google Inc. (GOOG) now claims 79% of the global platform market, up from about 64% a year ago. Apple’s share of the platform market dipped from 18.8% to 14.2%, as with the company’s handsets.

Microsoft Corp. (MSFT) gained platform share, growing from 2.6% a year ago to 3.3% this year. BlackBerry Ltd. (BBRY) lost nearly half its market share, dropping from 5.2% a year ago to 2.7%.

On the basis of total sales of smartphones plus feature phones, Samsung boosted its market share from 21.5% a year ago to 24.7% this year. Nokia Corp. (NOK) saw its share drop from 19.9% to 14.0%, and Apple’s share grew from 6.9% to 7.3%.

Some observations:

  1. Apple’s declining share of the smartphone market was accompanied by a drop in the average selling price (ASP) in the iPhone 5. The company’s latest model is expected to be launched next month, and that will boost sales through the remainder of this year, but eroding ASPs are not a good thing for Apple.
  2. Microsoft’s Windows Phone platform grabbed a larger market share than BlackBerry 10. If more evidence were needed that BlackBerry is fading and that nothing short of a miracle will save it, here it is.
  3. Nokia is not among the top five sellers of smartphone handsets, and feature phone sales are disappearing as smartphones come down in price. Competition from Chinese phone makers like ZTE and Huawei promise further to erode Nokia sales, especially in developing countries.

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