Smartphones outpace feature phone sales for first time as smart bands grow

Annual smartphone sales have overtaken feature phones for the first time, with smart devices accounting for 57.6 percent of the handset market in the fourth quarter of 2013.

New research from Gartner found that there were 967.8 million smartphones sold last year, driven by sales growth in Latin America, the Middle East and Africa, Asia/Pacific and Eastern Europe. Sales in developed markets fell in Q4 due to weaker demand.  

Total global handset sales hit the 1.8 billion mark last year, up 3.5 percent, with smart devices accounting for 53.6 percent of sales.  

Anshul Gupta, Principal Research Analyst at Gartner, said: “Mature markets face limited growth potential as the markets are saturated with smartphone sales, leaving little room for growth with declining feature phone market and a longer replacement cycle. Lack of compelling hardware innovation has further exacerbated replacement cycles for high-end smartphones in 2013 because consumers don’t find enough reasons to upgrade.”

Samsung continued to dominate the smartphone market, with 300 million handsets sold, giving it a 31 percent market share. While this was up marginally from 2012, it declined by 1.6 percent in Q4. 

Apple was second with sales of 150.8 million units, although its share fell from 19.1 percent to 15.6 percent. A focus on emerging markets saw Huawei keep its third place position, with sales of 46.6 million and a share of 4.8 percent. 

Gupta added: “While the top three mobile manufacturers are dominating the global mobile phone market, their share collectively fell in the fourth quarter of 2013 and yearly as Chinese and regional brands continue to raise their share.”

Looking ahead, Gartner predicted manufacturers will set their sights on the low end of the smartphone market in 2014, despite concerns that this will have a knock-on effect on average selling price and revenue growth.

Meanwhile, Samsung held a 54 percent share of the overall smart devices market thanks to its Galaxy Gear range of smartwatches, according to Canalys. 

Within this, the wearable band market has seen its shipments surge during the second half of 2013, with Fitbit dominating.

The research firm is predicting the smart band market will hit eight million annual shipments by the end of this year and 23 million by the end of 2015.

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