Get Smart: Dumb Phones Are on the Decline

The researchers at IDC are reporting that for the first time ever, more smartphones were sold globally in the first three months of 2013 than so-called "dumb" phones, the basic-feature models that come with most calling plans.

It's a development that's roiling the smartphone space as Apple saw the market share of its iconic iPhone slide below 20% as sales grew only 6.6%, the first time since the third quarter of 2009 its growth rate has been in the single digits. In fact Apple was the only smartphone maker among the top five that saw its market share slip, putting it even further behind industry leader Samsung, which saw its share of the market widen to 32.7%, a gain of almost 4 percentage points from the year-ago period.

Vendors shipped some 418.6 million mobile phones in the first quarter, a 4% increase from the 402.4 million units shipped in the same period last year, but down 13% from 483.2 million units shipped in the fourth quarter of 2012.

In looking at mobile phones generally, at both smart and "dumb" phones, Samsung remains the industry leader, but Nokia is second, with a 14.8% share reflecting the 62 million phones it shipped in the first quarter. It's followed by Apple -- which inched up in terms of share, to 8.9% -- LG, and ZTE.

More than anything it shows the decline felt by Nokia, which was once the world's top mobile phone manufacturer, and the rise of Chinese phone makers like Huawei and ZTE. Likely gone for good is BlackBerry despite the reintroduction of its BlackBerry Z10 and the fervent hope of its adherents that it marks a recovery in both status and share. Analysts believe the new smartphone is already running into headwinds.

Pacific Crest suggested that channel checks point to a build-up in inventory of the Z10 that's above normal, while Wedge Partners says BlackBerry is cutting back production to prevent that from occurring. While some of that may be a result of buyers waiting for the new Q10's release next month, considering the need for BlackBerry to get back on track, it releasing new models so soon that may detract from the ones that are supposed to lead its resurrection doesn't bode well for the future.

The growth of smartphones worldwide ought to also boost results from mobile carriers because of their heavy mobile data usage. As 4G networks spread across Europe and Asia, allowing carriers to charge more for their services as customers start to maximize the potential of their smartphones, it just might be a smart development for all parties involved.

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