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Smartphone Adoption Grew as Apple Innovation Slows

Across the globe an estimated 405 million mobile phone handsets -- including 197 million smartphones -- were shipped in the first quarter of 2013, according to the latest market study by ABI Research.

Smartphone shipments grew by 38 percent year-over-year (YoY), while feature phone shipments declined 5.2 percent YoY.

Shipments of all handsets grew 12 percent YoY in the first quarter thanks to the continued strength of the smartphone market, which achieved an all-time high of 49 percent shipment penetration.

"Worldwide handset and smartphone shipments exhibited classic Q1 softness," says Michael Morgan, senior analyst at ABI Research.

Samsung accomplished strong smartphone growth while Apple dismissed a troubling mix of slowed growth and declining margins as a sign that the older iPhone 4S was in high demand.

Nokia handset shipments plummeted to 62 million in Q1 with smartphone shipments at a 5-year low of 6.1 million.

Considering market and OEM specific conditions, BlackBerry delivered a respectable 6 million shipments, with 1 million coming from the launch of BlackBerry 10-based devices.

Despite HTC’s well-designed ONE devices, shipments continued to decline 37 percent YoY to 4.8 million. LG continued its revival with 10.3 million smartphone shipments and 16.2 million handset shipments.

"The last time a major smartphone OEM showed a trend of decreasing margins combined with falling ASPs and slowing growth, BlackBerry was still on the favorable side of a large market share and revenue drop," adds senior practice director Jeff Orr.

ABI believes that with major product announcements teased for Q3, Apple risks falling behind the innovation curve unless the next iPhone is more revolutionary than evolutionary. Has Apple lost its smartphone feature design mojo? We'll have to wait and see.

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