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For first time, smart phones edge past feature phones

There were more smart phones shipped last quarter than low-end, "dumb" phones shipped, according to a new study.

By Steph Solis / April 26, 2013

In this file photo, a passerby takes a picture of an Apple Store in Sydney, Australia, with a Samsung Galaxy phone. Smart phones surpassed feature phones in shipping numbers for the first time, in Q1 of 2013.

Tim Wimborne/Reuters/File

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For the first time, more smart phones were shipped around the world than low-end, feature phones, according to the International Data Corporation.

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The IDC’s first-quarter statistics show that out of the 216.2 million phones shipped, 51.6 percent were smart phones. These numbers mark an important milestone for the mobile-phone industry in an otherwise slow quarter.

“Phone users want computers in their pockets. The days where phones are used primarily to make phone calls and send text messages are quickly fading away," says Kevin Restivo, senior research analyst with IDC’s WorldWide Quarterly Mobile Phone Tracker, in a statement. "As a result, the balance of smart phone power has shifted to phone makers that are most dependent on smart phones."

In the past year, the global mobile-phone market grew by 4 percent, according to the IDC statment. The market expanded by 41.6 percent compared with the 152.7 million units shipped in the first quarter of 2012, but it was 5.1 percent lower than the 227.8 million units shipped at the end of the year.

Samsung stayed at the top with more units than Apple, LG, and Chinese vendors Huawei and ZTE combined. Its success this quarter can be attributed in part to the new features and security innovations of the Galaxy S4.

The data also shows the emergence of Chinese companies among leading smart-phone vendors. While a year ago, Nokia, BlackBerry (formerly Research In Motion), and HTC dominated the top five list, they face competition from Chinese vendors such as Huawei and ZTE, as well as Coolpad and Lenovo.

Zack Whittaker of ZDNet describes the numbers as a tipping point in which smart phones are becoming the norm, in both developed and emerging nations. However, he notes that feature phones will not vanish so quickly.

“It’s not to say the feature phone market is dead or even dying,” he writes. “A tipping point, maybe, but there’s still a huge economy in building the not-so-smart phones.”

Carl Howe, vice president of the Yankee Group, echoes that sentiment, saying it’s clear that smart phones are on the rise, just not on when exactly they will surpass feature phones on sales, shipment, and ownership.

“Nobody’s going to debate that [smart phones] will surpass future [low-end] phone sales,” Mr. Howe says in a phone interview.

The bigger trend, however, is the growing complexity of the devices consumers carry in their pockets. Howe says it’s a game changer that has cultural implications, and potential opportunities for mobile phone companies to earn extra revenue.

The cultural implications can differ between emerging and developed nations, but it is clear that each society will see a number of trade-offs for smart phones, he says.

“The most interesting thing is that people consider them so essential that people are giving up essential things for them,” he says. “One executive I know from a large computer firm went to Peru, and he was surprised to see people sleeping on the beach. They had no housing, but they had an iPhone, the most expensive smart phone in the market.”

While that example may seem extreme, it illustrates the growing appeal and need for a smart phone for people throughout the world. Howe notes that it will be interesting to see which products or necessities some people will sacrifice to be connected to the world through a smart phone, as it will likely differ from one society to another.

“Smart phones are increasingly things that people want, and they’re willing to give up other things for them,” he says. “This is going to change culture in pretty significant ways.”

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