STOCKHOLM -(Dow Jones)- Smartphone growth continued in the first quarter, proving a bright spot in an otherwise gloomy picture as global handset sales fell at a record pace, research firm Gartner Inc. (IT) said Wednesday.
Smartphones, such as Apple Inc's (AAPL) iPhone and a growing number of touchscreen devices from other manufacturers, have defied the downturn, aided by growth in applications as they broaden their reach into both the mid-tier and high-tier segments.
Still, the rapid downturn in consumer spending has hammered the wider market as customers delay upgrades and hold off buying new phones.
"There were some signs of a recovery in markets such as North America and China, but 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," Gartner mobile device research director Carolina Milanesi said.
"We really don't see demand stabilizing before the second half of 2010," Milanesi told Dow Jones Newswires, with the global handset market returning to growth of 5%-6% in 2010.
First quarter sales fell 14.5% from the fourth quarter 2008, Gartner said, while the 9.4% fall on year, to 269 million, was also the sharpest on record.
"Device vendors will focus increasingly on smartphones, improved user interfaces and services to differentiate themselves and fuel consumer demand," Milanesi said.
Smartphone sales increased 12.7% to 36 million units, and represented 13.5% of all mobile device sales in the first quarter 2009, up from 11% in the first quarter of 2008, Gartner said.
"Making sure you have a strong smartphone portfolio is going to be very important for the vendors, and that is what is going to make a lot of the difference," Milanesi said.
"Much of the smartphone growth during the first quarter of 2009 was driven by touchscreen products, both in mid-tier and high-end devices," said Roberta Cozza, principal analyst at Gartner.
Nokia Corp. (NOK) maintained its leading position overall, although its market share dropped to 36.2% from 39.1% a year earlier. Overall sales fell and the average selling price of its phones declined 18% from a year earlier, Gartner said. However, sales of Nokia smartphones grew after it introduced its 5800 device into more regions.
Nokia started shipping its 5800 touch screen smartphone at the end of 2008.
Samsung Electronics Co. Ltd's (SSNHY) market share increased 4.7 percentage points to 19.1% and it returned to double-digit profitability due to a good product mix.
"The announcement of its first Android-based product, the i7500, will help Samsung in a highly competitive second half of 2009," Gartner said.
LG Electronics Inc's (066570.SE) market share increased to 9.9% from 8%. The company benefited from a very strong portfolio of touchscreen, messaging and imaging devices, said Gartner.
Motorola Inc's (MOT) market share fell to 6.2% from 10.2%. The company "continued to experience significant difficulties even in its home market," Gartner said.
Sony Ericsson's (ERIC, SNE) market share fell to 5.4% from 7.5%, partly due to a weak product portfolio, said Gartner.
(Units in thousands)
1Q 09 1Q 09 Mkt Shr 1Q 08
Nokia 97,398 36.2% 115,192
Samsung 51,385 19.1% 42,397
LG 26,547 9.9% 23,646
Motorola 16,587 6.2% 29,885
Sony Ericsson 14,470 5.4%% 22,061
Others 62,732 23.4% 61,103
Total 269,120 100% 294,283
(Smartphones - thousands of units)
1Q 09 1Q 09 Mkt Shr 1Q08
Nokia 14,991 41.2% 14,589
RIM 7,234 19.9% 4,312
Apple 3,939 10.8% 1,725
HTC 1,957 5.4% 1,277
Fujitsu 1,387 3.8% 1,318
Others 6,896 18.8% 9,095
Total 36,404 100% 32,315
(All data from Gartner, May 2009)
Company Web site: www.gartner.com
-By Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3099; gustav.sandstrom@dowjones.com
