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Smartphone Sales Continue to Grow

Fri, 05/22/2009 - 8:11am
Barry Levine, newsfactor.com

Editor's Note: I'm curious as to how smartphone sales develop as netbook computers continue to develop as an email, data-management, and web-browsing accessory. I used to believe that the next big thing in personal computing would be a smartphone, but now I'm not so sure.

(NewsFactor.com) - The bad news for the mobile-device industry is that its sales in the first quarter were horrible. The good news is that smartphone sales are showing strength.

Those are some of the takeaways from a report by industry researcher Gartner released Wednesday. The report indicated that worldwide mobile-phone sales in the first quarter of this year were down 8.6 percent to 269.1 million units compared to the same quarter last year. But smartphone sales, which were 13.5 percent of all mobile-device sales, were up 12.7 percent.

Gartner also indicated that a recovery will not happen until the second half of next year, at the earliest.

Some 'Signs of Recovery' 

While noting some "signs of a recovery" in North America and China, Carolina Milanesi, a research director for mobile devices, said that "overall sales in the first quarter of 2009 registered the biggest quarter-on-quarter contraction since Gartner began monitoring the market on a quarterly basis in 2001."

The Reuters news service, in a poll of 34 analysts, found a cumulative assessment that handset sales in the current April-June quarter would drop 14.5 percent, and sales for the year would slump 10.3 percent.

But "several companies and analysts" told Reuters that the worst may be over, because the first-quarter decline was due in part to selling old inventory. Gartner said about 25 million devices were sold from inventory last quarter.

Gartner also found that Nokia continues to lead the mobile-phone market, but its market share has dropped from 39.1 percent to 36.2 percent, quarter over quarter. The next four leaders, in order, were Samsung, LG, Motorola and Sony Ericsson.

The report also noted that, led by BlackBerry maker Research in Motion and iPhone maker Apple, services and applications are now a key factor in the success of smartphones, particularly those built around music, e-mail and Internet browsing.

'A Lot More Exciting' 

Avi Greengart, an analyst with Current Analysis, said people with budgetary concerns are buying lower-end handsets or taking the free ones offered by wireless carriers.

But, he noted, there is still a segment that is buying the higher-end smartphones, and when the economy recovers, he expects "a market uptick" because of pent-up demand. The higher costs for both smartphones and their data plans are the biggest hurdles, he noted.

Greengart said one exception seems to be feature phones with QWERTY keypads or touchscreens, which, as a category, are "doing reasonably well."

He also said these observations apply mostly to North America. "In Europe, for example," he said, "sales are depressed across the board." Reports indicating that sales in the last quarter were largely coming from inventory, he said, match up with the "road maps" he's been seeing from various handset vendors, a number of whom have what he described as "exciting stuff" being planned for release in the second half of this year.

"If you're thinking that sales were depressed because the products were boring," he said, "they're going to become a lot more exciting in a few months."

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