The worldwide mobile phone market chalked up its first sales decline since 2009 last year, as feature phones continued to fall out of favour with consumers.
According to market watcher Gartner, mobile phone sales fell 1.7 per cent to 1.75 billion units in 2012, despite Q4 smartphone sales being up 38.3 per cent on last year and a record breaking 207.7 million units being shipped.
By contrast, Q4 feature phone sales totalled 264.4 million units, down 19.3 per cent on the same quarter in 2011.
Anshul Gupta, principal research analyst at Gartner, said the overall downturn in sales was a reflection of the continuing economic uncertainty blighting markets across the globe.
"The last time the worldwide mobile phone market declined was in 2009," said Gupta.
"Tough economic conditions, shifting consumer preferences and intense market competition weakened the worldwide mobile phone market this year," he added.
South Korean smartphone maker Samsung garnered the most sales during 2012, with sales of 384.6 million units of which 53.5 per cent were smartphones.
Its arch-rival Apple shipped 130 million smartphones in 2012, while Nokia sold 39.3 million smartphones last year, which was down 53.6 per cent on last year.
"The success of Apple and Samsung is based on the strength of their brands as much as their actual products," said Gupta.
"Their direct competitors, including those with comparable products, struggle to achieve the same brand appreciation among consumers, who in a tough economic environment, go for cheaper products over brand."
During 2012, the Android operating system continued to put some clear water between itself and Apple iOS in Q4.
Android's share of the market in Q4 stood at 69.7 per cent, while iOS accounted for 20.9 per cent, RIM for 3.5 per cent and Microsoft for 3 per cent.
Android and Microsoft both saw their market share grow last year from 51.3 per cent and 1.8 per cent, respectively, in Q4 2011.
Meanwhile, iOS and RIM's market share fell from 23.6 per cent and 8.8 per cent, respectively.
Gupta said this year should see competition within the mobile OS space start to hot up, as a host of other lesser known players fight to make their presence in the market felt.
"2013 will be the year of the rise of the third ecosystem as the battle between the new BlackBerry10 and Widows Phone intensifies," said Gupta.
"As carriers and vendors feel the pressure of the strong Android growth, alternative operating systems such as Tizen, Firefox, Ubuntu and Jolla will try and carve out an opportunity by positioning themselves as profitable alternatives," he added.
