Even with the decline, though, customers bought 1.75 billion phones last year and smartphone sales in particular were up over 38%. Gartner analysts predict that nearly 1 billion smartphones will be sold in 2013. Feature phones, on the other hand, are quickly falling out of vogue. Sales of low-cost feature phones were down 19.3% in 2012.

“The last time the worldwide mobile phone market declined was in 2009,” said Anshul Gupta, principal research analyst at Gartner. “Tough economic conditions, shifting consumer preferences, and intense market competition weakened the worldwide mobile phone market this year.”

Predictably, Apple and Samsung led the smartphone market, and now control over half of smartphone market share. Samsung, with its variety of Android handsets ranging from low-cost to the premium Galaxy line-up, now leads the market.

Chinese manufacturers are gaining ground, though. Similar to a report last week from analyst Canalys, Gartner shows that Huawei is now the the third largest seller of smartphones, and ZTE is now fourth in worldwide mobile phone sales. Huawei’s sales were up 73.8% from 2011.

“There is no manufacturer that can firmly lay claim to the No. 3 spot in global smartphone sales,” said Gupta. “The success of Apple and Samsung is based on the strength of their brands as much as their actual products. 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.”

Samsung’s strategy is strikingly reflected in the number of semiconductors bought by the Korean manufacturer. According to research firm Gartner, Samsung surpassed Apple last year to become the largest customer of semiconductors in the world. While Apple and Samsung were nearly tied for semiconductor purchases in 2011, Samsung last year bought a full 8% of the world’s semiconductors – $23.9 billion worth. Apple last year bought $21.4 billion worth for a 7.2% share of the world’s purchases.

“Although Samsung and Apple continue to go from strength to strength, other leading electronic equipment makers fared less well, and six of the top 10 reduced their demand in 2012,” said Masatsune Yamaji, principal research analyst at Gartner. “In addition to a weak macroeconomic situation, a dramatic change in consumer demand contributed to a reduction in semiconductor demand in 2012. The PC market still represented the largest sector for chip demand, but desktop and mobile PCs did not sell well, as consumers’ interest shifted to new mobile computing devices like smartphones and media tablets. This shift caused a substantial decrease in semiconductor demand in 2012, as the semiconductor content of a smartphone or a media tablet is far less than that of a PC.”

Overall there was a 3% drop in sales for semiconductors in 2012. Companies such as HP, Dell, and Toshiba saw their orders for semiconductors drop by billions of dollars. Sony managed to increase its orders by 1.9% and Lenovo increased its orders slightly.

“The mobile advertising market took off even faster than we expected due to an increased uptake in smartphones and tablets, as well as the merger of consumer behaviors on computers and mobile devices,” said Stephanie Baghdassarian, research director at Gartner. “Growth in mobile advertising comes in part at the expense of print formats, especially local newspapers, which currently face much lower ad yields as a result of mobile publishing initiatives.”

Japan and South Korea, with their large mobile adoption rate, currently have a lead in mobile advertising. Gartner predicts, however, that China and India will increasingly drive mobile ad growth. Also, as mobile ads become more integrated into large ad campaigns, it is predicted that the U.S. and Europe will catch up to Asia by shifting ad spending away from print and radio.

“Smartphones and media tablets extend the addressable market for mobile advertising in more and more geographies as an increasing population of users spends an increasing share of its time with these devices,” said Andrew Frank, research vice president at Gartner. “This market will therefore become easier to segment and target, driving the growth of mobile advertising spend for brands and advertisers. Mobile advertising should be integrated into advertisers’ overall marketing campaigns in order to connect with their audience in very specific, actionable ways through their smartphones and/or tablets.”

Gartner warns, though, that ad inventory is growing significantly faster than advertisers can shift their spending. The analyst firm compares “paid discovery” advertising by app makers to early web advertising, and states that it creates “an inflated picture of revenue that may ultimately prove to be a bubble.”

“Some correction in the growth rate must occur before demand from brand and local advertisers catches up with supply, and more sustainable economics support a faster growth rate commensurate with consumer adoption,” said Baghdassarian.

Gartner’s research shows a 4.9% decline in PC shipments in the fourth quarter of 2012 when compared to the same quarter in 2011. The firm went even further than IDC, all but stating that this is a harbinger of the predicted post-PC era.

“Tablets have dramatically changed the device landscape for PCs, not so much by ‘cannibalizing’ PC sales, but by causing PC users to shift consumption to tablets rather than replacing older PCs,” said Mikako Kitagawa, principal analyst at Gartner. “Whereas as once we imagined a world in which individual users would have both a PC and a tablet as personal devices, we increasingly suspect that most individuals will shift consumption activity to a personal tablet, and perform creative and administrative tasks on a shared PC. There will be some individuals who retain both, but we believe they will be exception and not the norm. Therefore, we hypothesize that buyers will not replace secondary PCs in the household, instead allowing them to age out and shifting consumption to a tablet.”

Much like the IDC report, Gartner shows that the launch of Windows 8 did not re-energize the PC market the way Microsoft may have hoped. Also, HP is once again leading PC shipments worldwide, with Lenovo following close behind.

“The PC market continues to face many headwinds. The launch of Windows 8 had no impact on PC demand, especially as ultramobile products were both limited in supply, as well as being priced too high,” said Ranjit Atwal, research director at Gartner. “The holiday season mostly saw retailers clearing Windows 7 notebook inventory or driving volume of low-end notebooks. Furthermore, the increasing choice of tablets at decreasing price points no doubt became a favorite Christmas present ahead of PCs.”

While manufacturers will be excited enough about the new technology to increase production, it is not predicted that consumer demand will rise at the same rate. Gartner’s new report suggests that manufacturers will have to offer “compelling reasons” for consumers to choose their brand.

“In the end, the choice may be all about the extra content that one TV brand offers over another,” said Paul O’Donovan, principal research analyst at Gartner. “Consumers will be asking questions such as, which Internet TV services can the TV access? Are these the sites I think are valuable? Can I use my smartphone or tablet with this TV? It is critical for the TV industry during this global economic downturn and decline in consumer confidence levels, to sustain sales and maintain or grow market share – especially in emerging markets. This is difficult when demand has slowed, so the extra functionality offered by smart TVs becomes the product differentiator – if prices are already competitive and all other variables are equal between brands.”

These predictions follow an entire year of rumors that tech’s biggest brand, Apple, will be entering the flat-panel TV with an iOS-based HDTV. The rumors have persisted through reports that manufacturing troubles and cable company stonewalling have delayed the release of the device.

If the cable industry continues to overvalue its content and delay the merger of computers and television, the television industry might not have the luxury of an Apple-led, iTunes-like push into a new business model. With YouTube channels now reaching subscriber numbers in the millions, traditional networks may end up regretting their stubbornness when most customers have “smart” TVs in 2016.

This huge growth in the smartphone market happened despite a 3.1% decline in the worldwide sales of all mobile phones. 428 million mobile phones were sold in the third quarter of 2012.

“After two consecutive quarter of decline in mobile phone sales, demand has improved in both mature and emerging markets as sales increased sequentially,” said Anshul Gupta, principal research analyst at Gartner. “In China, sales of mobile phones grew driven by sales of smartphones, while demand of feature phones remained weak. In mature markets, we finally saw replacement sales pick up with the launch of new devices in the quarter.”

The unsurprising winners in the race to sell mobile phones were Apple and Samsung, whose combined market share is 46.5% according to Gupta. In particular, Samsung saw a surge in the third quarter, shipping nearly 98 million mobile devices – a 18.6% increase in market share from the third quarter of 2011. Apple increased its mobile phone sales market share by around 1.6%. Interestingly, Chinese manufacturers such as ZTE, Huawei Device, and TCL Communication also saw their market shares increase slightly over the past year.

The familiar losers were also all accounted for in Gartner’s chart. Nokia, RIM, HTC, and Motorola failed to compete well with Apple and Samsung, losing mobile device market share. In particular, Nokia saw a huge decline, with its mobile phone sales declining 21.9% in the third quarter 2012. It lost 4.7% of its global mobile device sales market share, and dropped to seventh place in Gartner’s smartphone sales estimates.

“We expect global mobile transaction volume and value to average 42 percent annual growth between 2011 and 2016, and we are forecasting a market worth $617 billion with 448 million users by 2016,” said Sandy Shen, research director at Gartner. “This will bring opportunities for service and solution providers who will need to cater to the local demand patterns to customize their offerings.”

Gartner said the mobile payments market would remain “fragmented” for at least the next two years, with local markets using a variety of technology and business models. In addition, different regulations around the world will prevent consolidation of the market.

“There will be a few global players that have the scale and resources to serve large customers and the mass market whose requirements can be readily satisfied by standard solutions,” Shen said. “However, there will always be segments that cannot be sufficiently served by the global players. The demand of these segments can only be satisfied by specialized or local players who can better understand the segment and have specific solutions to meet the unique challenges.”

Though NFC technologies are beginning to proliferate into the smartphone market, Gartner predicts that mobile payments using the technology will remain low until 2015. In the meantime, SMS will remain the dominant technology in developing mobile markets and Web/WAP will continue to be highly used in North America and Europe.

“NFC payment involves a change in user behavior and requires collaboration among stakeholders that includes banks, mobile carriers, card networks and merchants,” said Shen. “It takes time for both to happen, so we don’t expect NFC payments to come into the mass market before 2015. In the meantime, ticketing, rather than retail payment, will drive NFC transactions.”

In 2010, worldwide IT spending totaled $3.4 trillion, up 5.4 percent from 2009.

Gartner has raised its outlook for 2011 global IT spending from its previous forecast of 3.5 percent growth. In 2010, the IT industry performed better than Gartner’s previous forecast of 3.2 percent growth.

“Aided by favorable U.S. dollar exchange rates, global IT spending growth is expected to exceed 5 percent in 2010, but a similar level of growth in 2011 — while forecast — is far from certain, given continued macroeconomic uncertainty," said Richard Gordon, research vice president at Gartner.

"While the global economic situation is improving, the recovery is slow and hampered by a sluggish growth outlook in the important mature economies of the U.S. and Western Europe. There are also growing concerns about the ability of key emerging economies to sustain relatively high growth rates. Nevertheless, as well as a fundamental enabler of cost reduction and cost optimization, investment in IT is seen increasingly as an important element in business growth strategies. As the global economy repairs itself in coming years, we are optimistic about continued healthy spending on IT."

The telecom equipment market is poised for the strongest growth in 2011, with worldwide telecom equipment spending forecast to grow 9.1 percent.

The computing hardware segment is forecast to grow 7.5 percent in 2011, but Gartner analysts said vendors face possible challenges, particularly in the area of PC growth, given likely weak economic growth through the first half of 2011.

With Facebook expected to launch its own email service on Monday, analysts at Gartner seem to be right on target.

“In the past, organizations supported collaboration through e-mail and highly structured applications only,” said Monica Basso, research vice president at Gartner.

“Today, social paradigms are converging with e-mail, instant messaging (IM) and presence, creating new collaboration styles. However, a truly collaborative, effective and efficient workplace will not arise until organizations make these capabilities widely available and users become more comfortable with them. Technology is only an enabler; culture is a must for success.”

While microblogging is reshaping enterprise communications, business communications are evolving. Newer employees will enter the workforce with a predisposition to communicate via a social network, but they will use e-mail in parallel.

“The rigid distinction between e-mail and social networks will erode,” Ms. Basso said. “E-mail will take on many social attributes, such as contact brokering, while social networks will develop richer e-mail capabilities.”

Vendors such as Microsoft and IBM will add links to internal and external social networks from within e-mail clients and servers, making services such as contacts, calendars and tasks shareable across e-mail and social networks. By 2012, Gartner said contact lists, calendars and messaging clients in any smartphones will be social-enabled applications.

Collaboration is slowly moving to the cloud, and Gartner analysts expect to see steep growth rates for sales of premises- and cloud-based social networking services. Organizations will use hybrid models where some services live on-premises and some are in the cloud. Gartner predicts that the percentage of e-mail accounts on cloud services will grow to 10 percent by year-end 2012, up 7 percent from 2009.

From a vendor’s perspective, the market is consolidating around Microsoft and Research In Motion (RIM), the two market leaders. Gartner forecasts that by 2012, RIM and Microsoft will own 80 percent of the enterprise wireless e-mail software market.

“The reality is that mobile collaboration will increase for all categories of workers, and organizations can either take the lead, or be led by their users,” said Ms. Basso.

“The most progressive organizations won’t be afraid to explore the innovative communications and collaboration models enabled by new devices and social services allow their employees to generate innovative ideas by experimenting with them.”

Let’s cover the near-term figures first.  Gartner believes Android will exit 2010 with a market share of 17.7 percent, just ahead of Research In Motion’s 17.5 percent.  Symbian, meanwhile, is supposed to hold a market share of 40.1 percent.

Then Android should experience a period of (continued) rapid growth, increasing its market share to 22.2 percent in 2011 and 29.6 percent in 2014.  And that should put it within striking distance of Symbian, which Gartner claims will have seen its market share shrink to 30.2 percent by then.

This is all good news for Google, to say the least, considering Gartner’s reputation.  Apple fans and shareholders, meanwhile, will have to consider how happy they are with the idea of a steady market share of around 15 percent.

Microsoft supporters will have even more thinking to do, since Gartner’s stats give it almost no chance of succeeding in the mobile market.

Roberta Cozza, a principal research analyst at Gartner, stressed in a statement, "[W]e believe that market share in the OS space will consolidate around a few key OS providers that have the most support from CSPs and developers and strong brand awareness with consumer and enterprise customers."