Smart phone sales suffer second-quarter slowdown

Smart phone sales growth slowed in the second quarter amid a weak global economy.

The worldwide market for smart phones grew 15.7 per cent in the second quarter, as vendors shipped a total of 32.2 million devices. But earlier this year the market was growing at 60 per cent. According to analysts Gartner, a slowing economy around the world is to blame, coupled with the development of more sophisticated "enhanced phones" running Java or Qualcomm's Brew rather than true smart phone operating systems like Symbian, Windows Mobile, or Apple's OS X.

Nokia is still the market leader by a huge margin, shipping nearly half of all smart phones sold in the world during the second quarter. The company is not growing nearly as fast as its rivals, however, and lost market share; second-place RIM increased its shipment totals by 126 per cent to obtain 17.4 per cent market share, and HTC grew its shipments 119 per cent to edge out Sharp for third place.

Absent from Gartner's top five was Apple, which shipped just 717,000 iPhones during the second quarter as it ran down the inventory of classic iPhones ahead of the July launch of the iPhone 3G. Apple should show up in next quarter's rankings, however, as the company sold one million iPhone 3Gs in just the first weekend it went on sale. Fujitsu's 1,071,490 units was good enough for fifth place for the entire second quarter.

The US is the fastest-growing region for smart phone sales, with shipments up 78.7 per cent in the second quarter. Western Europeans bought 29.3 per cent more smart phones in the quarter, while Japanese customers actually bought 24 per cent fewer phones than during the same period last year.

The picture should be brighter later in the year, Gartner said. "Wider availability of new touch smart phone models together with the global introduction of the iPhone 3G will help sales of smart phones return to stronger growth in the third quarter of 2008," Gartner analyst Roberta Cozza said.

Original article: Smartphone shipments ease off the gas pedal from CNET News.com