MUMBAI: Inspite of a growth in the sector, the global mobile phone sales were hit by tough economic conditions and fell by 1.7 per cent in 2012, according to a report from research company Gartner.

Owing largely to shifting consumer preferences and intense market competition, worldwide sales to end users totaled to around 1.75 billion units in 2012, a 1.7 per cent decline from sales in 2011.

Analysts at the firm suggested tough economic conditions had been partly responsible for the drop. It follows official data from Spain indicating its number of mobile telephone and datacard subscriptions fell by five per cent over the same period.

On the other hand, Gartner's report depicts a weakening demand for feature phones with limited functionality, which also led to the drop. It stated that in the final three months of the year, 264.4mn such devices had been sold, which was 19.3 per cent lesser than in the same period in 2011.

Although smartphones witnessed a 38.3 per cent year-on-year gain over the fourth quarter, they had still remained in the minority with 207.7mn units sold.

Apple and Samsung had continued to dominate the smartphone market, with a combined share of 52 per cent in the October-to-December quarter.

Gartner principal research analyst Anshul Gupta said, “There is no manufacturer that can firmly lay claim to the number three spot. Their direct competitors, including those with comparable products, struggle to achieve the same brand appreciation amongst consumers.”

In the fourth quarter, Android powered 69.7 per cent of all smartphones sold, while iOS accounted for 20.9 per cent of the devices. The year majorly marked a gain in share for Google's operating system, but a decline for Apple's - although in terms of units sold, both firms made gains.

The report also stated that the overall fall in sales marked the first time the market witnessed the situation since 2009.