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Samsung leads smartphone juggernaut

18 February 2014, 16:27 Duncan Alfreds

Cape Town - Smartphone sales have outsold feature phones for the first time as people increasingly shift to smart devices, new research has shown.

According to research firm Gartner, smartphone sales totalled 968 million units in 2013, representing growth of 42.3% over the previous year.

This means that smartphones accounted for 53.6% of all mobile phones sold, eclipsing feature phones for the first time, Gartner said.

The growth though, was led by sales in developing markets, where people have been turning to smartphones to connect to the internet, sometimes even skipping PCs.

"This increasing contribution of smartphones was led by growth in Latin America, the Middle East and Africa, Asia/Pacific and Eastern Europe, where smartphone sales grew by more than 50% in the fourth quarter of 2013," said Gartner.

Big winners

In developed markets like the US and Western Europe, smartphone sales were softer. Gartner attributed this to market saturation.

"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," said Anshul Gupta, principal research analyst at Gartner.

He said that a lack of innovation was to blame for people declining to replace their smartphones.

"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."

Big winners from the sales of smartphones include Samsung and Huawei. South Korean based Samsung has consolidated its market share at 31%, selling nearly 300 million units in 2013, while Chinese budget manufacturer Huawei has seen a significant uptick in market at 4.8%, putting it in third place overall.

Second place Apple, though selling a record number of smartphones at 150 million - 20 million more than 2012, has seen its market share continue to erode. It slipped from 19.1% to 15.6% in 2013.

Midrange smartphones

LG Electronics and Lenovo made up the top five, though both registered healthy gains in market share.

"Huawei smartphone sales grew 85.3% in the fourth quarter of 2013 to maintain the No 3 spot year over year. Huawei has moved quickly to align its organisation to focus on the global market. Huawei's overseas expansion delivered strong results in the fourth quarter of 2013, with growth in the Middle East and Africa, Asia/Pacific, Latin America and Europe," said Gupta.

He also advised Samsung to focus on midrange smartphone pricing while continuing to build on its leadership at the premium end of the market.

"Samsung will also need to build a clearer value proposition around its midrange smartphones, defining simpler user interfaces, pushing the right features as well as seizing the opportunity of bringing innovations to stand out beyond price in this growing segment."

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