Gartner makes it official: smartphones are outselling dumb phones

By , Aug 14, 2013

yellow iphone 5c handson

Smartphones – once the preserve for geeky first adopters – are now the norm. You notice the change on the street, on television and now with such traditional research firms as Gartner. Sales of smartphones in the second quarter reached 51.8 percent, compared to an astounding 21 percent decline in feature phones, or dumb phones as they’re also called, according to the researcher. At the same time, the Asia/Pacific region marked the highest smartphone growth, reaching to 74 percent…

The move to smartphones from dumb phones was also marked by a changing of the guards: Microsoft replaced BlackBerry as the No. 3 smartphone OS make (hardly a surprise). At the same time, Nokia – once the king of basic cell phones – is having a tough go as its once secure markets are eaten by flagging interest in feature phones and the growing dominance of Android smartphones.

Apple’s iPhone and iOS remain the No. 2 smartphone brand and its mobile operating system, Gartner said. However, the company’s marketshare is slipping as consumers wait for a new product and Android solidifies its lead. Samsung’s marketshare rose to 31.7 percent of smartphone sales and Google’s Android now holds 79 percent of the smartphone OS market.

iPhone 5C introduction (Martin Hajek 001)
Mockup via Martin Hajek.

Along with numbers showing smartphone sales now lead feature phones, Gartner shows unit sales of iPhones growing, yet marketshare falling during the second quarter of 2013. As for the rumored iPhone 5C, that device could even surpass the iPhone 4′s ability to depress the average selling price of Apple’s handset.

“While Apple’s [Average Selling Price] demonstrates the need for a new flagship model, it is risky for Apple to introduce a new lower-price model too,” said Anshul Gupta, principal research analyst for Gartner.

The iPhone 5C, a plastic handset many believe Apple will introduce during a September 10 event, is expected to cost between $300-$350. Gupta believes the 5C has a “much greater” chance of reducing the iPhone’s average selling price than even the heavily discounted iPhone 4.

Gupta said:

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 the low-end label, the 5C would carry the same marketing weight as any newly-announced Apple product.

What sort of bite could the iPhone 5C take from the rumored iPhone 5S, the full-featured smartphone Apple is also expected to unveil in September?

Although the iPhone 5 was Apple’s most popular handset to date, strong sales of the iPhone 4 drove down the average selling price of the newer iPhone to the lowest point seen since the handset’s 2007 launch, according to the analyst.

The impact of higher sales can also be seen in Gartner’s figures which showed iPhone sales grew to nearly 32 million handsets during the second quarter, up from about 29 million during the same time in 2012. Despite the growth in sales, marketshare fell to 14.2 percent, down from 18.8 percent for the same period last year.

apple-gartner-smartphone-market

Otherwise, Gartner Wednesday confirmed what we already knew: Samsung is the No. 1 smartphone, its ranking bolstered by sales of low-end handsets. For the South Korean conglomerate to continue growing, it “will be critical for Samsung to step up its game in the mid-tier and also be more aggressive in emerging markets.”

That advise comes as smartphone growth slows in mature markets, such as the US and Western Europe and climbs in regions such as Asia/Pacific, which registered a 74.1 percent increase during the second-quarter.

iPhone 5C boxes (Martin Hajek 001)

Additionally, smartphone makers who cut their teeth on high-end markets can’t go slumming when it comes to chasing mid-tier customers. Not only do Apple and Samsung see the mid-tier as a base for expansion, but low-end smartphone makers in China and India also view the middle as an area where they can grab more customers.

One surprising finding of the Gartner report: Microsoft has dethroned BlackBerry as the No. 3 smartphone operating system.

While the Windows giant has only 3.3 percent of the smartphone OS market – compared to 79 percent and 14.2 percent for Android and iOS, respectively – it is an advance from the 2.6 percent the software maker held during the second quarter of 2012.

However, to continue that upward movement, Microsoft needs to continue its attempts at attracting app developers to its mobile platform, according to Gartner.

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  • Nice

    Now that’s a good looking gold/sand iPhone. I’d buy that. That other completely gold one you guys had a picture of before was disgusting.

    • Sokrates

      That gold phone looks terrible, I’m sorry.

      • iPhone5&sgs2

        ill buy the complete gold color.
        I think its much more special than white or black.

  • Kurt

    What will the iPhone 5c be called next year when the iPhone 6 is out? iPhone 6C? Okay, sounds good…and now what will it be called in two years with the iPhone 6S? iPhone 6C2?
    :-s

    • Sokrates

      Good question. I doubt anyway that they’re gonna call it 5C .

    • Howard

      I imagine them dropping numbers at that point, in a similar way to the iPad. As they’ll only be selling the flagship and the cheaper one people wouldn’t get confused between which was which in the way people would if the 4 and 4S were just called iPhone.

  • ✘✘Aineel Nocum

    God those colored boxes for the cheap iPhone look horrible. It doesn’t look like something Jony Ive would design.

    • Yup

      iOS 7 is also horrible so it makes sense.

      • mehrab

        Ios 7 is gorgeous

  • Supafly_Boy

    So because Gartner says so it’s now “official”? Journalists need to stop taking guestimations by analytics firms as fact. They’re findings are based on questionnaires and not on ANY concrete, legally binding sales numbers released by manufacturers.

    Stop fishing for page clicks and report facts instead of hear say. It’s headlines like these that give credibility to paid for guesses firms like Gartner.

  • Dan

    I think it’s good that Apple is branching out and making a ‘C’ line (if the rumors are true). Here’s hoping that the next step is more options in screen size. The more options the better imo, not everyone wants the same in their phone.

    • mehrab

      I agree. But apple cant even keep demand with one iphone remember the iphone 5? And how it could not keep up with demand. Now imagine a cheap iphone a iphone 5s and and iphone 5XL or whatever. It”ll be a mess. For sure they cant keep up with demand other then that they will have a lot of hardware issues out of the box. This is why we dont see larger screens. Apples afraid. Now imagine they male the 5s a 4.5 inch many people will love and even more “recent iphone owners/just anyone will stay away from it due to its size and that large iphine might not even sell as half as the iphone 5 did. Already their stocks are low.

  • Ghost

    Once your iPhone being activated you can’t sell or trade in your handset and if all handset had same features of activation as iPhone , I just stick to Nokia 3310 -_-”

    • n0ahcruz3

      Hahaha same here

  • underdog

    I hate to see those plastic bombers :(
    apple should stay with they’re elegant glass/aluminium – style.

  • n0ahcruz3

    Nokia 3310 looks way better than those technicolor plastic iphones. Lol