The worldwide mobile phone market grew 6.1 percent year over year in the fourth quarter of 2011 (4Q11). According to the latest market study by International Data Corporation (IDC), vendors shipped 427.4 million units in 4Q11 -- that's compared to 402.8 million units in the fourth quarter of 2010.
The 6.1 percent year-over-year growth was higher than IDC's earlier forecast of 4.4 percent for the quarter, but weaker than the 9.3 percent growth in 3Q11.
"The mobile phone market exhibited unusually low growth last quarter, which shows it is not immune to weaker macroeconomic conditions worldwide," said Kevin Restivo, senior research analyst at IDC.
The introduction of high-growth products such as the Apple iPhone 4S, which shipped in the fourth quarter, helped to bolster smartphone growth. Yet overall market growth fell to its lowest point since 3Q09 when the global economic recession was in full bloom.
While smartphones continue to grow in popularity, feature-phones still comprise the majority of all mobile phone shipments.
"Feature-phones accounted for a majority of shipments from four of the five market leaders during the quarter," said Ramon Llamas, senior research analyst at IDC. "Even though their proportion is eroding, feature-phones maintain their appeal on the basis of price and ease of use."
Feature-phones are clearly maintaining their market share. They are becoming more like smartphones, incorporating mobile Internet and third-party applications (apps). While this may not deter early-adopter smartphone demand, it may slow down the rate at which smartphones are selected over feature-phones.
That scenario could change, if and when smartphone vendors and mobile network service providers learn how to market smartphones more effectively to the majority of mainstream consumers.
Regional highlights from the IDC study include:
In Asia-Pacific (excluding Japan), the feature phone market declined in conjunction with the region's largest feature phone markets -- China, India, and Indonesia. The impact on phone demand due to the holiday season, which generally means a sales uplift, was minimal in this category.
Meanwhile, smartphones maintained their growth momentum as the iPhone 4S was well received in Australia, Hong Kong, Korea, and Taiwan. Competition in the Google Android market intensified as mid-range vendors, such as Lenovo, Coolpad, and Huawei, shipped large numbers in their home market of China. Elsewhere, the rest of the Android market was dominated by Samsung, followed by HTC and LG.
Windows Phone gained some momentum thanks to sales of the HTC Titan and Radar and Nokia Lumia. In Japan, pent-up demand for mobile phones after last year's natural disasters and weakened economy meant unusually high growth for the country's mobile phone market. Smartphone sellers, such as Apple, fared particularly well while non-Japanese vendors continue to make incremental gains in the market.
The Western European mobile phone market was impacted by lower demand, a result of the worsening economic environment. Smartphone growth was not enough to offset the feature phones decline, despite excellent performances from Apple and Samsung. Nokia experienced another difficult quarter as a result of its transition towards Windows Phones.
Feature phone shipments were near historic lows, supported primarily by very low-end devices. Overall, the Central Europe, Middle East and Africa (CEMA) markets showed strong double-digit growth due in large part to Samsung's continued strength in the regions.
Bucking its global troubles, Nokia shipments flattened out in the regions after a strong third quarter, enabling it to remain the market leader in the regions. Apple continued to make quiet progress in the regions as well.
In North America, smartphones held the spotlight with the launch of the Apple iPhone 4S, while LTE smartphones from HTC, LG, Motorola, and Samsung also made important gains.
Research In Motion launched several new phones running on BB OS 7 during the quarter, and signaled a late 2012 timetable for its first BlackBerry 10 smartphones to reach the market, leaving an opportunity to its competitors to attack its market share.
Smartphones also took center stage in Latin America with the launch of multiple models across the region, particularly sub-$200 Google Android models. The low price points have enabled broader appeal, and have also found placement among popular prepaid markets.
Once again, although smartphones continued to grab some consumer attention, low-cost feature phones ruled the market, with strong participation from Nokia, Samsung, and multiple Chinese vendors.