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Android Sales Soar In Third Quarter, Gartner Study Shows

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By Tarmo Virki, European Technology Correspondent
(Reuters) - Cellphone market growth slumped in the third quarter, with the grim economic climate prompting consumers to cut back or delay purchases, particularly in western Europe, research firm Gartner said.

Global sales of all mobile phones grew an annual 5.6 percent in the third quarter to 440.5 million phones, down sharply from 16.5 percent growth in the previous quarter.

"The economic factor is there, definitely," said Gartner analyst Roberta Cozza. "If you look at smartphones performance in some southern European countries it is flat or declining."

"Last quarter we warned of a slowdown in smartphone sales in western Europe," she said.

Global smartphone sales grew 42 percent in the third quarter from a year ago, but that was down from a 74 percent rise in the previous quarter and the more than 100 percent growth rates the market has seen over the last few years.

Gartner said growth in demand for smartphones slipped in advanced markets such as western Europe and the United States as many users waited for new flagship devices, while slowdown also occurred in Latin America and the Middle East and Africa.

Inventories of unsold phones grew by some 20 million phones in the quarter mostly in a preparation for the upcoming holiday-sales season, but Gartner noted Samsung Electronics and HTC saw a bigger buildup of unsold models than others.

Cozza repeated Gartner's forecast for 11 percent growth for the overall cellphone market for the full year and said the smartphone market should grow 45 to 50 percent in 2011 as stronger uptake in emerging markets and North America compensates for weaker Europe.

NOKIA STILL NO. 1

Nokia remained the world's largest cellphone vendor, but its market share dropped to 23.9 percent from 28.2 percent a year earlier, while rivals Samsung, LG Electronics and Apple closed the gap.

"The second quarter of 2011 was the low point for Nokia, and the third quarter brought signs of improvement," Gartner said.

Nokia, left in the dust by Apple and Google in the booming smartphone market, last month introduced its Lumia models, the first it has developed using Microsoft's Windows Phone platform, seen as the key to its future.

"Heavy marketing from both Nokia and Microsoft to push the new Lumia devices should bring more improvement in the fourth quarter of 2011. However, a true turnaround won't take place until the second half of 2012," the researcher said.

Microsoft's share of the smartphone market almost halved in the quarter to just 1.5 percent, while Google's Android saw its share more than doubling to 52.5 percent.

"Android benefited from more mass-market offerings, a weaker competitive environment and the lack of exciting new products on alternative operating systems such as Windows Phone 7 and RIM," Cozza said.

(Reporting By Tarmo Virki; Editing by Will Waterman and Jane Merriman) Copyright 2011 Thomson Reuters. Click for Restrictions.

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