Global mobile phone sales have dropped 1.7% to 1.75 billion units in 2012, despite fourth quarter (Q4) smartphone sales rising 38.3%over last year reaching 207.7 million units, according to a new report from Gartner.
In contrast, sales of feature phones during Q4 reached 264.4 million units, a 19.3% drop over the corresponding quarter in 2011
Gartner principal research analyst Anshul Gupta said that the last time the worldwide mobile phone market declined was in 2009.
"Tough economic conditions, shifting consumer preferences and intense market competition weakened the worldwide mobile phone market this year," Gupta said.
During Q4 2012, Apple and Samsung collectively captured 52% of the global smartphone market share compared to 46.4% during the previous quarter.
Samsung became top smartphone seller during 2012, selling 384.6 million units, while Apple shipped 130 million smartphones, followed by Huawei and Nokia.
"The success of Apple and Samsung is based on the strength of their brands as much as their actual products," Gupta said.
"Their direct competitors, including those with comparable products, struggle to achieve the same brand appreciation among consumers, who, in a tough economic environment, go for cheaper products over brand."
Android captured 50% of the mobile operating system market in 2012, as its market share rose 87.8% in Q4, while RIM had 44.4% market share, with Microsoft seeing a 1.2 percentage point growth over the same quarter in 2011.
"2013 will be the year of the rise of the third ecosystem as the battle between the new BlackBerry10 and Widows Phone intensifies," Gupta.
"As carriers and vendors feel the pressure of the strong Android’s growth, alternative operating systems such as Tizen, Firefox, Ubuntu and Jolla will try and carve out an opportunity by positioning themselves as profitable alternatives."