Samsung dominates smartphone-focused market

Worldwide sales of smartphones accounted for 53.6 percent of overall mobile phone sales in 2013, exceeding annual sales of feature phones for the first time.

Sales of smartphones to end users totalled 968 million units in 2013, representing increase of 42.3 percent from 2012, according to the latest findings released by Gartner.

Smartphone sales grew 36 percent in the fourth quarter of 2013 and accounted for 57.6 percent of overall mobile phone sales in the fourth quarter, up from 44 percent year over year.

This increasing contribution of smartphones was led by growth in Latin America, the Middle East and Africa, Asia/Pacific and Eastern Europe, where smartphone sales grew by more than 50 percent in the fourth quarter of 2013.

In the fourth quarter of 2013 however, mobile phone sales in mature regions fell due to weaker demand.

"Mature markets face limited growth potential as the markets are saturated with smartphone sales, leaving little room for growth with declining feature phone market and a longer replacement cycle," says Anshul Gupta, principal research analyst at Gartner.

“Lack of compelling hardware innovation has further exacerbated replacement cycles for high-end smartphones in 2013 because consumers don't find enough reasons to upgrade."

Top Smartphone Vendor Analysis

Samsung:

While Samsung's smartphone share was up in 2013 it slightly fell by 1.6 percentage points in the fourth quarter of 2013. This was mainly due to a saturated high-end smartphone market in developed regions.

It remains critical for Samsung to continue to build on its technology leadership at the high end. Samsung will also need to build a clearer value proposition around its midrange smartphones, defining simpler user interfaces, pushing the right features as well as seizing the opportunity of bringing innovations to stand out beyond price in this growing segment.

Apple:

Strong sales of the iPhone 5s and continued strong demand for the 4s in emerging markets helped Apple see record sales of 50.2 million smartphones in the fourth quarter of 2013.

"However, Apple's share in smartphone declined both in the fourth quarter of 2013 and in 2013, but growth in sales helped to raise share in the overall mobile phone market," Gupta adds.

"With Apple adding NTT DOCOMO in Japan for the first time in September 2013 and signing a deal with China Mobile during the quarter, we are already seeing an increased growth in the Japanese market and we should see the impact of the last deal in the first quarter of 2014."

Huawei:

Huawei smartphone sales grew 85.3 percent in the fourth quarter of 2013 to maintain the No. 3 spot year over year. Huawei has moved quickly to align its organisation to focus on the global market.

Huawei's overseas expansion delivered strong results in the fourth quarter of 2013, with growth in the Middle East and Africa, Asia/Pacific, Latin America and Europe.

Lenovo:

Lenovo saw smartphone sales in 2013 increase by 102.3 percent and by 63.1 percent in the fourth quarter of 2013. Lenovo's Motorola acquisition from Google will give Lenovo an opportunity to expand within the Americas.

"The acquisition will also provide Lenovo with patent protection and allow it to expand rapidly across the global market," Gupta says.

"We believe this deal is not just about entering into the U.S., but more about stepping out of China."

Gartner also expects smartphones to continue to drive overall sales in 2014 and an increasing number of manufacturers will realign their portfolios to focus on the low-cost smartphone sector.

Sales of high-end smartphones will slow as increasing sales of low- and mid-price smartphones in high-growth emerging markets will shift the product mix to lower-end devices. This will lead to a decline in average selling price and a slowdown in revenue growth.

In the smartphone OS market, Android's share grew 12 percentage points to reach 78.4 percent in 2013. The Android platform will continue to benefit from this, with sales of Android phones in 2014 approaching the billion mark.

Worldwide mobile phone sales to end users totaled 1.8 billion units in 2013, an increase of 3.5 percent from 2012.

Users bought 490.3 million mobile phones in the fourth quarter of 2013, an increase of 3.9 percent compared with the same quarter in 2012.

"While the top three mobile manufacturers are dominating the global mobile phone market, their share collectively fell in the fourth quarter of 2013 and yearly as Chinese and regional brands continue to raise their share," Gupta adds.