While the well-respected Internet blog TechCrunch focused on the Apple/Samsung story in analysing the data from Gartner’s latest survey on the mobile market, the real news was elsewhere. The BBC got it right in trumpeting that “mobile phone sales fell in 2012“. This is a big deal and it will put inexorable downward pressure on margins.
As I first laid out in July, mobile is a landgrab right now as the mobile upgrade cycle means significant flux in terms of the types of phones individual consumers are buying. This means that adoption rates are much more important than platform switches, particularly in the smartphone space. IDC released a report on the mobile market in the last quarter which showed three trends of note here. First, overall market growth was slowing to a crawl, meaning that when one adds up all of the sales of mobile phones, the market is not growing. Second, the market for smartphones is still growing briskly, with unit sales for Q3 2012 up 47% year-on-year. Third, Android was taking share in that market due to the impact of Apple’s once a year platform cycle and the adoption of cheap Android phones as users upgraded from feature phones. These three trends will continue to dominate the mobile landscape, putting pressure on margins as average selling price declines.
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