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More Smartphones Were Shipped in Q1 2013 Than Feature Phones, An Industry First According to IDC

The worldwide mobile phone market grew 4% year over year in the seasonally slow first quarter of 2013 (1Q13) as smartphones outshipped feature phones for the first time.

IDC

Context & Ripple Effects

The crossover follows a smartphone-led mobile-phone boom in 2011 and IDC's 2012 finding that Android- and iOS-powered devices were expanding their market share. With total mobile-phone shipments up only 4% year over year in Q1 2013, the milestone signals a change in the mix of demand, not merely a rising handset market.

First-order effects

  • Smartphone vendors move into the majority of global handset shipments, while feature-phone makers face a shrinking share of a mobile market growing only modestly.
  • Android and iOS device makers gain a larger installed-device pipeline as buyers increasingly enter the market through smartphones rather than basic handsets.

Second-order effects

  • Handset competition shifts further toward smartphone price, software, and ecosystem differentiation, raising pressure on vendors whose portfolios are concentrated in feature phones.
  • Mobile developers and service providers have a broader addressable base for smartphone applications and data-centric services, making platform reach more consequential.

Third-order effects

  • If the mix shift persists, the mobile industry becomes organized less around voice-centric handset replacement and more around software platforms distributed through smartphones.
  • The earlier expansion of Android and iOS points toward platform concentration: hardware vendors' access to competitive operating systems and app ecosystems becomes a central determinant of their position.

The trend: Global mobile demand is transitioning from feature phones to software-platform smartphones, shifting industry leverage from basic handset supply toward operating systems and ecosystems.