Purchase Deferrals Ahead of iPhone 5 Hurting All Mobile Phone Sales

Worldwide sales of mobile phones slipped 2.3 percent in Q2 to 419 million units, according to Gartner Group. The smartphone segment jumped 42.7 percent during the period, and now comprises 36.7 percent of total mobile phone sales, Gartner said. Slowing demand for the overall category is due to the challenging economy and users postponing upgrades in anticipation of high-profile product launches such as the iPhone 5, Gartner said. Chinese manufacturers are pushing 3G and preparing for major device launches in the second half that will propel the smartphone market further, while the feature phone market will continue to weaken, said analyst Anshul Gupta.

Consumer demand for the iPhone slowed in Q2, with sales falling 12.6 percent from Q1, while year-over-year sales grew 47.4 percent, Gartner said. Apple could experience another quarter of weaker-than-usual sales, it said, depending on the launch date of the new iPhone this quarter. According to published reports Tuesday, iPhone 5 will ship on Sept. 21, though those reports weren’t confirmed by Apple. Despite economic headwinds, Apple will benefit from strong holiday sales in North America and Western Europe that have historically been “immune to economic pressure,” Gupta said.

Samsung’s mobile phone sales remained strong in Q2, up 29.5 percent from Q2 2011 on “particularly strong” Galaxy 3 sales, Gartner said. Some 10 million Galaxy 3 phones sold in the two months after release and the number could have been higher except for product shortages, Gartner said. Samsung boosted its share of the worldwide mobile phone market to 21.6 percent, increasing its lead over Nokia (19.9 percent) and Apple (6.9 percent), Gartner said. Smartphones now account for 50.4 percent of all Samsung mobile devices, or 45.6 million units, it said.

Samsung and Apple now represent about half the smartphone market with no other vendor reaching 10 percent, Gupta said. 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 Q2, Gupta said. Nokia’s mobile phone sales, meanwhile, fell 14.8 percent in Q2, and the company is “battling fiercely” with unbranded and emerging device manufacturers “to defend its feature phones sales,” Gupta said. Nokia posted sequential growth in the feature phone market, but its Lumia devices “continue to struggle to find a place in consumers’ minds” as an Android alternative, he said. Declining smartphone sales are adding to Nokia’s woes, as Nokia lost the No. 1 position to Samsung in Q1 and is facing “reduced profitability due to continuous declining sales of premium smartphones,” Gupta said.

Among smartphone operating systems, Android extended its lead with an increase of 20.7 percentage points in market share in Q2, Gartner said. Apple’s iOS share inched ahead 0.6 percent year over year for the quarter, but sagged 3.7 percentage points from Q1, as users postponed upgrading ahead of the upcoming launch of the iPhone 5. The next-gen iPhone “should provide the greatest upgrade opportunity yet” on an expected new design, larger screen and other stylistic changes that “make a strong case for iPhone 4 users to upgrade,” according to Gartner analysts.