Tech giant Samsung has reported its lowest quarterly profit in eight years this week an indicator to the weakened global economy to hit PC…
Samsung is winning the mobile wars and at the same time helping Android kill in the mobile OS stakes. Thing is all of the players in the game of phones are competing for a smaller market.
According to research company Gartner, some 419.1-million mobile phones sold in the first few months of 2012, two percent less than the same period in 2011.
That’s more significant than it might seem. It’s the first time the market has gone into decline since 2009.
“Global sales of mobile devices declined more than expected due to a slowdown in demand from the Asia/Pacific region,” said Anshul Gupta, principal research analyst at Gartner. “The first quarter, traditionally the strongest quarter for Asia — which is driven by Chinese New Year, saw a lack of new product launches from leading manufacturers, and users delayed upgrades in the hope of better smartphone deals arriving later in the year.”
Thing is, the companies making the phones didn’t predict this sudden fall in demand. That means they built too much stock, which could help lower prices in the next few months.
For the first time since 1998 Nokia isn’t the world’s leading phone seller. Samsung overtook the beleaguered Finnish giant, selling 86.6-million phones — 25.9% more than it did last year.
The South Korean titan also took back the world’s number one smartphone position from Apple, selling 38-million smartphones worldwide.
Samsung’s Android-based smartphone sales meanwhile represented more than 40% of Android-based smartphone sales worldwide; no one else achieved more than a 10% share of the market.
In fact, smartphones represent one mobile sector still experiencing growth, reaching 144.4-million units in the first quarter of 2012, up 44.7% year-over-year. Apple and Samsung together control nearly half of the smartphone market with Nokia sales continuing to fall despite hedging its bets on a new OS partner in Microsoft.
Apple’s sales grew 96.2% fuelled by its decision to offer the iPhone 4S to new markets and operators. It also broke new ground in China, where it sold over 5-million units, making the Asian superpower its biggest market after the US.
RIM’s woes continued, with its global market share declining to 2.4%. “RIM desperately needs to deliver winning BB10 products to retain users and stay competitive. This will be very challenging, because BB10 lacks strong developer support, and a new BB10 device will only be available in the fourth quarter of 2012,” said Gupta.
In the OS market, Android accounted for more than half of all smartphone sales (56.1%) in the first quarter of 2012 . Gartner reckons the smartphone market has become highly commoditised and differentiation is becoming a challenge for manufacturers.
“This is particularly true for smartphones based on the Android OS, where a strong commoditization trend is at work and most players are finding it hard to break the mould,” Gupta said. “At the high-end, hardware features coupled with applications and services are helping differentiation, but this is restricted to major players with intellectual property assets. However, in the mid to low-end segment, price is increasingly becoming the sole differentiator. This will only worsen with the entry of new players and the dominance of Chinese manufacturers, leading to increased competition, low profitability and scattered market share.”