Smartphones now tops in sales; Samsung surges as iPhone sales slow

RESEARCH TRIANGLE PARK, N.C. —Samsung Electronics Co. captured a third of the global smartphone market in the first quarter as growth for Apple’s iPhone dropped to its slowest pace ever, according to data released by Strategy Analytics.

Shipments of Samsung smartphones surged 56 percent to 69.4 million units in the March quarter, Boston-based Strategy Analytics said in an e-mailed statement Thursday. Apple (Nasdaq: AAPL) iPhone shipments rose 6.6 percent to 37.4 million units, while LG Electronics Inc. gained third place for the first time, it said.

Slowing iPhone sales mean Apple must recharge, the firm said.

Woody Oh, Senior Analyst at Strategy Analytics, noted: “Apple grew just 7 percent annually and shipped 37.4 million iPhones worldwide in Q1 2013. Apple’s global mobile phone marketshare is approaching a peak. Apple will need to launch new models, or partner with additional major carriers like China Mobile, if it wants to expand significantly beyond its current ceiling of 10 percent global volume share.”

Global smartphone shipments in the period rose 36 percent to 209.5 million units, driven by adoption of third-generation service in China and fourth-generation service in the U.S., Strategy Analytics said. Samsung today posted a record quarterly profit on surging sales of its Galaxy handsets as demand for its high-end smartphones and cheaper traditional models in emerging markets stoke sales.

“Samsung shipped almost two times more smartphones and grew nine times faster than Apple during the quarter,” Neil Mawston, a Strategy Analytics analyst, said in the statement. “Samsung should continue to deliver strong smartphone volumes worldwide in the second quarter.”

The Suwon, South Korea-based company’s new flagship Galaxy S4 handset goes on sale today.

Neither Lenovo nor BlackBerry (Nasdaq: BBRY), each of which has a major presence in the Research Triangle, cracked the top five vendors list although Lenovo is rolling out smartphones in an increasing number of countries and BlackBerry is launching new models.

Nokia should not be forgotten, Strategy Analytics added.

Nokia’s global mobile phone shipments fell 25 percent from 82.7 million units in Q1 2012 to 61.9 million in Q1 2013. Weak Symbian smartphone volumes and lackluster feature phone demand caused Nokia’s shrinkage,” Mawston said. “Nonetheless, Nokia remains the world’s second largest mobile phone vendor by volume, and if it can expand aggressively its fast-growing Lumia and Asha ranges this year, then there is still potential for Nokia’s position to stabilize or recover.”

Smartphones Now Top Seller

The quarter was the first in which smartphones, the high- end devices with color screens that can access the Internet to download games and videos, outsold the traditional mobile phones used for voice or text only,according to data released by researcher International Data Corp.

Total mobile phone shipments rose 4 percent globally to 418.6 million devices in the quarter, according to the IDC report. Smartphones accounted for 216.2 million units, or 51.6 percent of the total, IDC said.

“Phone users want computers in their pockets,” IDC analyst Kevin Restivo said in the report. “The days where phones are used primarily to make phone calls and send text messages are quickly fading away. As a result, the balance of smartphone power has shifted to phone makers that are most dependent on smartphones.”

While Lenovo didn’t crack the top five, the IDC report noted that the company and other Chinese phone makers are growing.

“In addition to smartphones displacing feature phones, the other major trend in the industry is the emergence of Chinese companies among the leading smartphone vendors,” said Ramon Llamas, research manager with IDC’s Mobile Phone team. “A year ago, it was common to see previous market leaders Nokia, BlackBerry (then Research In Motion), and HTC among the top five. While those companies have been in various stages of transformation since, Chinese vendors, including Huawei and ZTE as well as Coolpad and Lenovo, have made significant strides to capture new users with their respective Android smartphones.”

Samsung and Cupertino, California-based Apple led the global smartphone market with shares of 33.1 percent and 17.9 percent respectively, Strategy Analytics said. LG was third with 4.9 percent global market share, it said.

Huawei Technologies Co. and ZTE Corp., China’s two largest makers of equipment for phone networks and both based in Shenzhen, rounded out the top-five globally, with market shares of 4.8 percent and 4.3 percent respectively, Strategy Analytics said. The rankings from IDC also showed Samsung, Apple, LG, Huawei and ZTE as the top-five global smartphone vendors.

In terms of total mobile phone shipments, Samsung also led worldwide with 27.5 percent market share, followed by Nokia Oyj with 14.8 percent, and Apple with 8.9 percent, according to IDC. LG and ZTE completed the top five in mobile phone share, with 3.7 percent and 3.2 percent, IDC said.