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Samsung, Apple and others escape as slumping feature phone sales haunt Nokia

May 14th, 2013 at 3:50 PM
Q1 2013 Cell Phone Sales

The PC market isn’t the only tech sector in trouble. According to Gartner’s new numbers, Asia-Pacific is the only region in the world where mobile phone volumes are still growing. Phone sales in the United States are now dropping at 9% annualized pace. Globally, phone volumes were practically flat in Q1 2013, inching up a mere 0.7% year-over-year. Smartphone growth came in at a torrid 43% during the quarter, several points above what was expected a few months ago. This contrast means that feature phone sales are in a real free fall. This is particularly clear in Latin America, where even the hot smartphone growth is not enough to prevent overall phone sales from declining by nearly 4%.

The deepening feature phone gloom is not a problem for Apple, Samsung, HTC, BlackBerry and other brands focusing solely on smartphones. But it means that Nokia must speed up its low-end smartphone roll-outs right now.

On Tuesday, Nokia debuted yet another relatively expensive Lumia model, this time with an aluminum front. This is precisely what the company does not need. What it needs is dirt cheap Windows Phones to combat the hyper-aggressive low-end Android competition.

The Indian web retailer Flipkart shows a snapshot of the Asian phone market turmoil. Nokia’s key Asha feature phone range is collapsing as cheap Micromax and Karbonn models elbow out Nokia’s budget devices. For the price of the Asha 206 with a 2.6-inch display, Asian consumers are opting for models like the Micromax Bolt A27 with a 3.5-inch touchscreen.

Nokia is still trying to fight touchscreen models with non-touch phones. It’s a battle the company is losing. Everything now rides on how quickly it can launch a wide range of sub-$150 Lumia models in emerging markets.

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