Global Mobile Phone Sales Post First Decline Since 2009

Tyler Durden's picture

One of the fundamental creeds held by the proponents behind every new technology and gizmo market, including cell phones, smart phones, tablets, Sony Walkmen, 8-tracks, VHS tapes, juice extractors, tape rewinders, etc., is that their growth rate (and by implication the consumers' discretionary income), is completely dissociated with gravity and will grow at a far faster pace than global economic growth virtually in perpetuity. This is the case until empirical evidence reminds them, and everyone else, that gravity eventually always wins. Which is precisely what happened with global mobile phone sales, which in 2012 posted their first decline since the cataclysmic 2009. Gartner reports that the global cell phone market declined by 1.7% in 2012, down from 1.78 billion devices sold in 2011 to 1.75 in 2012. "Tough economic conditions, shifting consumer preferences and intense market competition weakened the worldwide mobile phone market this year," the report says.

More on the findings:

Samsung and Apple continued to dominate the market, with the Korean giant selling 385 million phones in 2012, of which 53.5 per cent were smartphones, with Apple selling 130 million smartphones.

 

Chinese company Huawei was third spot in worldwide smartphone sales for the first time in the fourth quarter, Gartner said, selling 27.2 million smartphones in 2012, an increase of 74 per cent.

 

Gartner said it expects sales of feature phones – ie any phone that is not a smartphone - to continue falling this year.

...

Another reason for the drop is the weakening demand for feature phones, which possess some smartphone abilities but are limited. While smartphones had record sales and were up 38.3% for the fourth quarter of 2012, feature phone sales fell by 19.3% -- and that decline is expected to continue.

Before smartphone proponents argue this is merely rotation out of a commodity into a premium space, read this:

Gartner said while the demand for iPhones in the fourth quarter, consumer demand favoured the less expensive iPhone 4 and 4S. It added the arrival of the iPad Mini also created a dilemma for some users when deciding if to upgrade an iPhone 4 or iPhone 4S to an iPhone 5, or buy the new tablet.

So while there is an element of conversion into ever more feature rich offerings (aka margin compression), the fundamental gating factor is no longer coolness, or hipness, but the simplest one of all: the bottom line.

This also means that the margin compression that has been haunting firms such as Apple will not only continue but accelerate, as the peak growth phase has passed, and now, just like in the sovereign arena, it is a race to the margin bottom.

Finally, since the preservation of optimism is key, Gartner leave on a slightly bullish note:

As a whole, however, the report predicts the mobile market will do better next year. Gartner says it expects mobile sales to reach 1.9 billion in 2013 -- with a 1 billion coming solely from smartphones.

 

It also says 2013 will be the year of the third ecosystem, as carriers try to break free from the influence of Apple and Google Android while Microsoft's Windows Phone 8, BlackBerry 10 and others duke it out.

 

"Alternative operating systems such as Tizen, Firefox, Ubuntu and Jolla will try and carve out an opportunity by positioning themselves as profitable alternatives,” the report says.

Alas, Gartner's forecast is surprisingly reminiscent of what it said a year ago, when it too forecast a continuing growth in sales. Sadly, for both Gartner, and the entire human race, what happens next nobody can see, as whatever will be, will be purely a function of the unintended consequences of the actions of a few select central planners who do everything in their power to convert fiat into wealth (by dilution).

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arm50's picture

we're all waiting for that fucking watch

Say What Again's picture

B, B, But that guy on CNBC said the ecomony is all betta.

He said that I should BUY, BUY, BUY everything I can.

I should go -- "All In"

I can get a Casio for about $8 to $10.  Why do I need a piece of fruit on my wrist?

Also, AAPL is stealing someone's idea.  They had them on CNBC ~3 months ago.  CNBC made a big deal about the new innovation (i.e. green spew) that is surrounding the Crapple.

fonestar's picture

Fuck the central planners, the consumer kulture and their planned obsolecence.

I don't own a "smart phone" or any other consensual tracking device.  My quad core IBM Lenovo can do WAY more than a "smart phone" and barely costs any more.

My money is in gold, silver, guns & ammo.

SilverTree's picture

I got my Samsung Note 2 in the mail today. :-)

Manthong's picture

You know that emaciated little Biafran/Nigerian kid with the flies on his face (like the president's) that you’ve seen in all the "feed the hungry" ads?.

He needs to upgrade from his beaten up iPhone 3.

Almost Solvent's picture

He needs to die off along with most of the 3rd world so I can live high on the hog and not have to worry about sharing my standard of living with 3rd world fuckers wanting a piece of my living standard.

Ying-Yang's picture

and I read this from the fucking "Cloud"

The cloud can kiss my ass.

smacker's picture

The way to avoid tracking is to buy a PAYG mobile phone with cash and always top it up with cash. Only switch it on when you want to use it. Nobody knows who owns it.

chrispycrunch's picture

"we're all waiting for that fucking watch"

 

The irony.

cramers_tears's picture

The metric system, flyin' cars, more liesure-less work and that fuckin' watch.

flattrader's picture

Where's my fucking jet pack?

They promised there'd be jet packs...

camaro68ss's picture

rut ro - scubby doo

EmmittFitzhume's picture

How many Obama Phones were "distributed"  recently?

LongSoupLine's picture

Fuck...this is fucking huge.  I better call someone!

centerline's picture

No no no.  You are supposed to video conference them while calling someone else and texting at the same time... while driving on the freeway and eating nachos.  It's called "multi-tasking."

Solon the Destroyer's picture

I'm actually quite distraught... Does this mean we're going to see fewer narcissistic nymphs posting naked self pix on themselves on the interwebz?  I'm going short the interwebz then... it's all about the content, people!

CunnyFunt's picture

Figure everyone's 2-year contract is up and they don't want another 2-year rape.

Edit: F.U. AT&T

dtwn's picture

Republic wireless (not affiliated) http://www.republicwireless.com/ is where its at.  $20 a month  and no contract.  When they have more phones and phones that can be rooted I think their popularity will explode.

CunnyFunt's picture

Thanks for the tip, amigo.

WillyGroper's picture

Well, that was interesting. Thanks. The catch being 3G so it's slow unless ur using wifi. The major carriers push using wifi also, but this should kick'em in the nads.

centerline's picture

The honeymoon is over already?

NumberNone's picture

Kind of a bullshit story to use as illustration of phone sales decline.  Yes, feature phones are dying but the smartphones are increasing but the price point is higher so selling fewer and people are holding on to them longer.  

This is like saying 'Holy shit, television sales are dropping' when people were moving from black&white to color.  Yeah..tv sales are dropping but it's not the same technology being bought or discarded.

EscapeKey's picture

Personally, I'm waiting for the Oppo Find 5 to be widely available. Time to give a Chinese phone a try.

Or I might just wait for the Samsung Galaxy S4/Note 3.

Tijuana Donkey Show's picture

Free chinese backdoor hack with every device! 

EscapeKey's picture

Unlike our good, old, Western backdoors.

slackrabbit's picture

Or NSA. A hacker proved Android sends all data back, and Wired magazine confirmed it.

thisandthat's picture

I might too if it just had mem card (dealbreaker), replaceable battery (bad) and headphone jack (usb just not the same). I'll pass.

A. Magnus's picture

People sre finally figuring out that having food in your fridge is a much more useful status symbol than a piece of shit, slave-labor made government tracking platform...

NotApplicable's picture

I'd guess it to be more of weighing the value of the sunk cost already in your hand, vs. the value gained from any upgrade. That fifth row of icons was hardly a game-changer, and nowhere near worth the price.

timbo_em's picture

Take a look at the recent food stamps chart. To me it looks like sheeple want to have both and want someone else to pay for it. The same is holds for other developed countries.

WTF_247's picture

Don't worry - if demand for iphones drops too far, Obama will mandate that all food stamps are distributed via app directly to your iPhone.  Then everyone will need an Obama phone to get paid, demand through the roof and APPL to 1000!!!!....

WTF_247's picture

That and the iKiddies that used student loan money to purchase the latest and greatest over the years are now in the real world without a job.  No job, no buying.

RSBriggs's picture

Phones have reached that same level that PC's have hardware wise - where improvements are made in smaller and smaller increments and the current model is "good enough" to last you several years.  No need to buy the newest version every 6 months in order to have the latest bells-and-whistles or sufficient performance to play the hottest new game.  

They've reached what I'd call the Windows-XP level - sufficiently stable enough to use for years, upgrade to WIndows 7, 8, or whatever comes along next not especially needed ...  Android had a lot to do with that.

EscapeKey's picture

If you had said XP->Vista, I would agree. But XP->W7 was a pretty major step up.

Windows 7 is a pretty damn awesome OS.

RSBriggs's picture

Agree, it's far superior to Vista (which sucked horribly), but there are still MILLIONS of computers that run XP out there, and will continue to do so for years - expecially in the corporate world..  600,000 where I work - with plans to transition them to Windows-7 by 2017, because Microsoft is forcing them to do so.  

And what does Windows-7 really provide that XP didn't?

forwardho's picture

I run my company on win/97

Why fix that which works just fine.

EscapeKey's picture

native 64-bit, DX11, improved user directory structure, updated desktop, kernel is much improved (which leads to better drivers and improved stability), better security settings (uac), faster boot, aero, improved stability, ...

smacker's picture

That sounds like a sales pitch.

To people who know how to use a PC and want to be in control of it, Win7 intentionally makes it more difficult. I use XP-Pro-SP3 on my self-built desktops and Win7 HP on two laptops. XP is far better for me. With XP: I AM IN CONTROL. AND I never use anti-virus bloat or s/w firewalls on any of my systems! Just a NAT router to keep the crap well away.

EscapeKey's picture

Win7 intentionally makes it more difficult, as the majority of people out there know very little about PCs. And having spent ages cleaning PCs using Hijackthis and equivalents, I can assure you that's a good thing. In terms of admin control, provided that you know what you're doing, there's very little difference. Under the bonnet, in terms of ring 0 driver requirement and relevant security settings, I can assure you there's a lot.

And stop replacing the 's' in Microsoft for a '$' sign. It really detracts from your argument, as it makes you sound as if you're 14.

SoCalBusted's picture

XP -> Win7 is not a must have nor compelling.  BUT, what MS has done is shut off the upgrade path for MS applications such as IE.  IE 9 is not available in XP, IE 8 is the limit.  IE 8 is not compatible with many web sites, thus forcing people to either change browsers or upgrade to Win 7.  My theory is part of the decline in IE use is due to people choosing to take the path of least resistance and switch browsers rather an going throught the hassle of upgrading their OS.

CunnyFunt's picture

Or just use Mozilla. Fuck IE.

SoCalBusted's picture

Sure, for personal use, but still needs to be supported for software development.

SoCalBusted's picture

Downvote?  Guess you never had to develop software for customers that set the requirements, duh.

smacker's picture

"And what does Windows-7 really provide that XP didn't?"

Very little from a user-functional pov. Maybe better Wi-Fi connectivity capability. But offset by a lot of other crap.

DosZap's picture

I had XP IE 7 for years, loved it, I COULD work on it, and control IT, not like Win7.

Which IMHO is a POS.(esp for AT&T users).

Microsoft has a real nasty habit of Changing OS, before they have even worked the bugs out of the one 12-18 mos old.

Vista Sucked, and IE 9 Sucks, 8 was ok, 7 Better.

Now they are (for a change) basically GIVING away Win 8, and few are biting.

Every change (upgrade), is less user friendly, and hides crap from you that was an open book on IE7 XP Svc Pk3.

Any browsers that use Google or I run from.Every Android I have looked at(Samsung & HTC/LG,etc, depend on Google), which is a goobermint info machine.

 

dtwn's picture

I agree, I actually rather like windows7.  No problems whatsoever.  It was a nice move from xp to 7.

smacker's picture

"Windows 7 is a pretty damn awesome OS."

ROTFL.

Whereas XP-Pro will be written in history as the peak of Micro$oft's O/S achievements.

JuliaS's picture

I currently own no phone of any kind. Got tired of them half a year ago, but even before then, there was only one time I ever bought a phone in late 90's. After that I kept of finding discarded phones left by the kind of people that tend to upgrade every revision cycle. I never had to spend money on anything other than the airtime and avoided contracts all together.

Most communication I do nowdays is via e-mail, instant messanging or in person. I have an emergency cell phone in my car with an airtime card that's ready to be activated if the vehicle breaks down in the middle of nowhere. Have no use for a phone otherwise. No monthly bills, no telemarketers and no annoyance.

ebworthen's picture

DOH!

Turns out when food gets really expensive there IS something electronic you can do without.