Mobile Phone Sales Slip for First Time in 3 Years

Not since 2009 have mobile phone sales fallen from the previous year, but numbers coming in from 2012 indicate that the industry as a whole sold 1.7 percent less phones than it did in 2011. These stats, courtesy of research firm Gartner, put Samsung in first place in sales (385 million), with Apple taking second place (130 million) and Chinese phone maker Huawei taking third (27.2 million).

One explanation behind the drop has to do with the technological plateau we’ve reached with our mobile devices. When the iPhone first launched back in 2007, it brought a new experience and new expectations for mobile phone manufacturers going forward. Fast forward to present day and you’ll see that most of Apple’s competitors have caught up on many levels; most phones now include a touch-screen, a feature-rich OS, and some kind of app store. Innovation now has more to do with what’s inside the phone, and less to do with how it looks or how you interact with it, and phones simply aren’t aging as quickly as they were when Apple was introducing new features like the Retina display.

I’m still using an iPhone 4S and I’m completely content with it. The iPhone 5 just wasn’t a big jump in anything other than screen size. Gartner believes that, in Apple’s case, “consumer demand favoured the less expensive iPhone 4 and 4S.” I’m inclined to agree. The introduction of the iPad mini is also an event that might have caused potential iPhone upgraders to spend their cash on the smaller tablet instead of on the latest Apple phone.

Android device makers have been putting out devices with larger screens for years, so things get even murkier as they try to educate consumers on why their latest phones are better than their previous models. The truth is, aside from upgraded processors and an NFC chip here and there, not much has changed with Android phones lately. When consumers don’t see a clear, compelling reason to buy an updated device, they won’t. This is visible in Jelly Bean’s market share (12.2%) which still trails Android 2.3 Gingerbread (45.4%). Users are more than happy to stick with their older devices. If it’s not broke, why fix it?

It’ll be interesting to see how device makers attempt to turn things around for 2013. Smartphone sales are already expected to eclipse feature phone sales for the first time, which is great for those manufacturers who get to sell a more expensive device, but bad for them at the same time. As the pool of feature phone users gets smaller, mobile phone makers inch closer to a future where people just don’t buy new phones as frequently. Apple is expected to introduce a half-step update in the iPhone 5S, and Android device makers will likely continue on without offering any game-changing updates to their phones. BlackBerry will re-enter the market within the next few months, and Microsoft will keep pushing Windows 8 devices.

We’ll have to wait and see what the year brings us, but at this point, I’m not sure this year’s sales will beat the numbers from 2012.