There was more than one billion global smartphone sales in 2014, encouraged by low-priced devices especially from China.
Smartphones represented two-third of the mobile market with 1.2 billion devices being sold, out of the total mobile sales of 1.9 billion last year.
According to a report by Gartner, smartphone sales in 2014 increased by 28.4% from the previous year, while total mobiles sales increased by 3.9%.
Mobile sales grew in all the regions except Japan and Western Europe, where they declined by 2.8% and 9.1%, respectively.
Within the premium segment, Apple surpassed Samsung in the fourth quarter with a market share of 20.4% against the latter’s 19.9%. However, for the entire 2014, Samsung was still the leader with 24.7% against Apple’s 15.4%.
Gartner principal research analyst Anshul Gupta said: "Samsung continues to struggle to control its falling smartphone share, which was at its highest in the third quarter of 2013. This downward trend shows that Samsung’s share of profitable premium smartphone users has come under significant pressure."
Apple reported its best quarter ever in the fourth quarter with sales of 74.8 million units.
The iPhone maker’s first ever large-screen phones witnessed good demand with sales in China and US growing at 56% and 88%, respectively.
Apple’s strong ecosystem and its new iPhone 6 and iPhone 6 Plus drove strong replacements within the iOS base. These new smartphones also offered new users, who are looking for larger screen phones, a strong alternative to Android, Gartner said in its report.
Gartner research director Roberta Cozza said: "With Apple dominating the premium phone market and the Chinese vendors increasingly offering quality hardware at lower prices, it is through a solid ecosystem of apps, content and services unique to Samsung devices that Samsung can secure more loyalty and longer-term differentiation at the high end of the market."
Next to Apple and Samsung came Lenovo (plus Motorola), and Chinese manufacturers Huawei and Xiaomi, in the fourth quarter.
The Chinese manufacturers have been expanding their share in the low-end smartphones within China as well as outside.
Cozza said: "Chinese vendors are no longer followers."
"They are producing higher quality devices with appealing new hardware features that can rival the more established players in the mobile phone market. Brand building and marketing will be key activities in deciding which Chinese vendors can secure a foothold in mature markets."
Demand for cheaper phones in emerging countries has pushed the smartphone operating system (OS) market growth with Android benefitting the most.
Windows Phone’s performance was flat but it recorded strong results in some markets in Europe, and in the business segment.