Mobile phone sales decline in Q2, says Gartner study

Apple iPhone sales stagnate as consumers wait for release of iPhone 5, pause in demand may continue into third quarter.

The global recession, especially in Europe and Asia, is hitting smartphone sales, according to a Gartner report. The report says that smartphone sales showed a 2.3 percent decline in sales when compared to the same quarter in 2011.

 "Demand slowed further in the second quarter of 2012," said Anshul Gupta, principal research analyst at Gartner in a prepared statement. "The challenging economic environment and users postponing upgrades to take advantage of high-profile device launches and promotions available later in the year slowed demand across markets. Demand of feature phones continued to decline, significantly weakening the overall mobile phone market."

Gupta said that those high-profile phone launches notably included the Apple (NASDAQ: AAPL) iPhone 5, which is expected to launch on September 12. He also said that a number of Chinese manufacturers are planning major launches in the fall of 2012, and that's also delaying upgrades.

The report said that demand for the Apple iPhone weakened in the second quarter of 2012, with sales falling 12.6 percent from the first quarter, but noted that Apple will likely position itself to take advantage of strong holiday sales in North America and Europe.

The bright spot in mobile phone sales figures came from Samsung, which Gartner said remained very strong, and in fact increased 29.5 percent in the second quarter. The study said that the growth was due to the record sales of the Galaxy line of smartphones, which exceeded Samsung's expectations. According to the Gartner report, the Samsung Galaxy S III was the best-selling Android phone in the quarter.

"Samsung and Apple continued to dominate the smartphone market, together taking about half the market share, and widening the gap to other manufacturers. No other smartphone vendors had share close to 10 percent," Gupta said in a prepared statement. "In the race to be top smartphone manufacturer in 2012, Samsung has consistently increased its lead over Apple, and its open OS market share increased to one-and-a-half times that of Apple in the second quarter of 2012."

The Gartner report said that the arrival of the iPhone 5 should provide a substantial boost to Apple's sales because the new form factor and larger screen would give users a reason to upgrade from the iPhone 4 and earlier models. Currently, Android has 64.1 percent of mobile market share, compared to 18.8 percent for iOS, according to the Gartner report.

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