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Record smartphones sales, but feature phones far from dead

China is the next battleground

The first quarter of 2015 saw global smartphone sales set a new record of $96 billion, with the most desirable elements being big screens and 4G.

The stats come from market analysis firm GfK, which compiles figures for the top handset manufacturers — so while it's happy to trumpet the good numbers, any questions about who sold what and to whom are met with a mumble.

What GfK did tell us was that Q1 2015 global smartphone sales value was up eight per cent year-on-year, while unit demand increased seven per cent year-on-year to 310 million (well over 2,000 phones a minute).

However, a slowdown in demand in China and Developed Asia dragged down growth, from a hefty 19 per cent year-on-year, Q4 2014.

The company states that 4G is rapidly gaining share – surpassing 50 per cent of the global handset market for the first time. GfK predicts a 4G ramp-up in China in the second half of 2015 to drive incremental demand.

On the other hand, 2G is pretty dead, and within smartphones, 2G is forecast to represent four per cent of the global units this year, down from five per cent in 2014.

China will be an interesting battleground between Xaiomi, Apple and Samsung.

As for the European market, that was less hot. Sales value in Western Europe declined on a year-on-year basis for the first time in Q1 2015, dragged down by Spain and France.

As smartphone penetration nears saturation point, both countries are expected to see a slowdown in smartphone unit growth this year compared with 2014.

What GfK doesn’t do is distinguish between basic and feature phones. Before the rise of smartphones, manufacturers used to look at three categories. Basic (just text and voice, and which generally were bar shaped), Feature Phones (which had, well, features such as radios, cameras browsers and mail), and Smart Phones (high-end stuff).

Gfk has now merged the first two categories so that all phones that are not smart are feature phones. The company told El Reg that in the first quarter of this year, "feature phones represented 29 per cent of the global handset unit sales, but only four per cent of the revenues, due to the much lower average selling price".

"GfK forecasts feature phones to capture 26 per cent of the global unit sales this year, with Emerging Asia and Middle East & Africa having the highest unit mix of feature phones," it continued.

However, it’s not time to pronounce the non-smartphone dead, as research analyst Dimitrios Xydias told us that “feature phones, while declining, will remain a multi-billion dollar industry for years to come with over 400 million of the poorest people in the world buying one in 2015".

And in some age demographics there is a healthy market for feature phones. Doro which sells phones for the older user has seen massive growth off the back of old-fashioned, reliable clamshell phones with three week battery life and big button. With 96 per cent of the UK market by value the company has just started selling its Liberto 820 Grandroid handset.

Kevin Walsh, director of trends and forecasting at GfK comments: “The weakness in China was caused by a significant slowdown in 3G demand, which was not offset by 4G growth. We forecast China to return to growth in the second half of the year, driven by a continued 4G ramp-up."

"In Developed Asia, the year-on-year decline was caused by tough comparisons with Q1 2014, when demand was pulled forward in Japan due to an upcoming VAT increase in April," he added. ®

 

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