Feature Article

November 14, 2012

What is Happening to Mobile Device Sales?

Worldwide sales of mobile phones to end users reached almost 428 million units in the third quarter of 2012, a 3.1 percent decline from the third quarter of 2011, according to Gartner, Inc.

"After two consecutive quarter of decline in mobile phone sales, demand has improved in both mature and emerging markets as sales increased sequentially," said Anshul Gupta, principal research analyst at Gartner

Image via Shutterstock

Without question, overall mobile device sales were sluggish in 2012. There are many possible explanations for the slowdown. Overall economic conditions might have users postponing upgrades. Some users might be waiting for the next iteration of a device (Windows, Apple, RIM).

We might in many markets be encountering more resistance to smartphone adoption by more casual users. Some might argue that consumers are shifting spending to tablet devices. Indeed, Gartner suggests that might be the case.

In some cases, deliberate service provider policies have slowed adoption of smartphones, or device replacements. Spanish mobile service providers stopped subsidizing devices, effectively raising prices. Higher prices depress sales, of course. And some service providers, such as AT&T, took measures in 2012 to discourage purchasing of some expensive smartphone models, notably the Apple iPhone.

Whatever the reason, and it is possible all the above play a role, device sales have slowed, globally.

Smartphone sales accounted for 39.6 percent of total mobile phone sales, with sales growing 46.9 percent from the third quarter of 2011.

Tougher economic conditions undoubtedly play a significant role; though a near term emphasis on tablets likely also is shifting spending from smartphones to that new category. Tablet sales appear to be cannibalizing PCs. The issue is whether consumers are choosing to shift spending that might have gone to smartphones. Some of us think that is happening.

Edited by Brooke Neuman

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