The latest mobile phone report from Gartner shows that for the first time since 2009, overall handset sales dropped due to weak demand for low-cost feature phones. But where feature phones faltered in 2012, smartphones had a very strong year lead by handsets from Apple and Samsung.

Sales to end users totaled 1.75 billion for 2012 which was a 1.7 percent decline from the year before. In the fourth quarter alone, feature phone sales were down 19.3 percent year over year. Smartphones sales, on the other hand, were up 38.3 percent over the same period in 2011 but it still wasn’t enough to make up the overall deficit.

We are told that tough economic conditions, shifting consumer preferences and intense market competition weakened the worldwide market last year. The research firm expects feature phone sales to continue to fall through 2013 with overall sales to reach an estimated 1.9 billion units.

Together, the top two handset makers were responsible for 52 percent of the global smartphone sales. Gartner says Samsung finished on top which isn’t a huge surprise. What was a surprise, however, is the fact that Huawei had a solid fourth quarter that helped catapult them to the third overall position among smartphone vendors.

For 2012, the company managed to sell 27.2 million smartphones – up 73.8 percent from 2011. That growth is likely to continue through this year as Huawei announced two smartphones at CES last month that are already gaining a lot of attention, the Ascend D2 and Mate.