Global sales of smart phones continued to rise in the second quarter as customers sought more features for their money, research firm Gartner Inc. said Wednesday.
However, the overall mobile-phone market declined from a year earlier for the third consecutive quarter, though the decline was at a slower pace than in the previous quarter, Gartner said in its quarterly report on the industry.
The rapid downturn in consumer spending has hammered the wider market as customers delay upgrades and hold off buying new phones. Prices of phones have been falling as phone companies and vendors try to stimulate demand. However, sales of smart phones are on the rise as vendors and wireless companies focus on marketing these devices in the hope of making more revenue per device.
Consumers who would usually buy midrange phones are either now purchasing smart phones, which offer features such as email, or are trading down to less-expensive handsets, said Gartner's research director, Carolina Milanesi. "We are seeing a lower revenue opportunity than we did a quarter ago," she said.
Gartner said about 286 million handsets were sold in the three months ended June 30, down 6.1% from a year earlier. That's an improvement on the record 9.4% drop in the first quarter from a year earlier.
Still, similar to a trend seen in the first quarter, sales of smart phones, such as Apple Inc.'s iPhone and Nokia Corp.'s N97 touch-screen handset, rose 27% to 41 million units.
The overall handset market could return to positive growth in volume terms by the fourth quarter, Ms. Milanesi said, helped by improving consumer confidence and new product launches from vendors including Sony Ericsson and Motorola Inc.The three months ending Dec. 31 "is going to be a very strong quarter; there are a lot of products coming in time for Christmas," she added.
Heavyweight Nokia maintained its leadership position in the second quarter, even though its market share fell to 36.8% from 39.5% in the year-earlier period as it lost ground to Samsung Electronics Co. and LG Electronics Inc.
Samsung's market share increased to 19.3% from 15.2%. LG's market share increased to 10.7% from 8.8%. Motorola's market share fell to 5.6% from 10%.
Sony Ericsson's market share fell to 4.7% from 7.5%. Gartner said the company has suffered from an uncompetitive range of handsets, missing key trends like full keyboards, Internet browsing and navigation.
