Smartphone Demand Slips, Carrier Loyalty Trumps Smartphone OS

Yesterday I posted data from Chetan Sharma (from US carriers) that reflected growing smartphone demand and waning demand for feature phones. However Gartner's latest handset sales data reflects a decline in smartphone sales from last quarter: 

Worldwide sales of mobile phones to end users reached 419 million units in the second quarter of 2012, a 2.3 percent decline from the second quarter of 2011, according to Gartner, Inc. Smartphone sales accounted for 36.7 percent of total mobile phone sales and grew 42.7 percent in the second quarter of 2012.

Unlike other handset figures in the market these data represent actual handset sales vs. "shipments." Samsung is now the global market leader, followed by Nokia and then Apple. Nokia's share is now just under 20% of global handset sales. Half of Samsung's 90 million unit sales were smartphones according to Gartner. 

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By contrast the firm said that demand for the iPhone weakened, "as sales fell 12.6 percent from the first quarter of 2012, but grew 47.4 percent year on year." This was reflected in Apple's Q2 earnings, which missed expectations based on lower iPhone sales. The suggestion is that consumers are waiting for the next iPhone to be released. 

In a related bit of data, gadget blog The Verge published results of a survey conducted by Apple at some point in the past (date unreported). The sample size was very small (n=89). The data are being exposed as part of the Apple-Samsung IP trial going on now. The survey asks why users chose an Android device over an iPhone.

Top reasons for buying an Android among those who considered an iPhone

  • Wanted to stay with wireless service provider -- 48%
  • Trusted the Google brand -- 36%
  • Preferred larger screen -- 30% 
  • Preferred the Android market for apps -- 27% 
  • Wanted better integration with Google services -- 26%
  • Wanted the latest and greatest smartphone -- 26%
  • Wanted GPS turn-by-turn navigation -- 25%
  • Wanted the latest technology -- 25%

The fact that the top reason for choosing Android is "wanted to stay with wireless service provider" indicates this survey was probably conducted before Verizon obtained the iPhone, which was in early 2011. The iPhone is now available from all major US carriers, except T-Mobile, as well as several pre-paid carriers. There's enormous pressure for Apple to deliver an exciting new piece of hardware when the next iPhone is announced in September. 

Returning to the Gartner data, the firm said that Nokia is under pressure at both ends of the market. Low-cost Chinese OEMs are hurting the company's feature phone business, while its "Lumia devices continue to struggle to find a place in consumers' minds as a replacement for Android."