High-tech industry research firm Gartner Inc. (NYSE: IT) reports this morning the worldwide sales of mobile phones unexpectedly fell -2% in the first quarter of 2012, to a total of 419.1 million units. That marks the first sales drop for the devices since the second quarter of 2009. Gartner’s research includes all mobile phones, both smartphones and the older feature phones.
Samsung Electronics (OTC: SSNLF.PK) led all vendors with 86.6 million units sold, followed by Nokia Corp. (NYSE: NOK) with 81.2 million units sold, and Apple Inc. (NASDAQ: AAPL) with 33.1 million units sold. Research in Motion Ltd. (NASDAQ: RIMM) sold 9.9 million units and Motorola Mobility Holdings Co. (NYSE: MMI) sold 8.4 million units.
Samsung grew its handset market share from 16.1% to 20.7% year-over-year. Apple’s share also grew, from 3.9% to 7.9%, while Nokia’s share fell from 25.1% to 19.8%. The only other vendor to increase share was ZTE Corp., a Chinese maker of low-cost handsets.
By software platform, the Android operating system from Google Inc. (NASDAQ: GOOG) grabbed 56.1% of sales, up from 36.4% in the first quarter of 2011. Apple’s iOS was second in platform shipments, with a 22.9% of the market compared with 16.9% last year. The big losers were Nokia’s Symbian OS, down from 27.7% a year ago to 8.6% this year, and RIM, down from 13% a year ago to 6.9% this year. Microsoft Corp.’s (NASDAQ: MSFT) share also fell, from 2.6% a year ago to 1.9% this year.
According to Gartner:
All vendors were impacted at different levels; however, white-box vendors seem to have suffered the most. While tier one players such as Nokia were negatively impacted on sell-in numbers (sold into retail), white-box vendors were unable to adjust production and were left with a build-up in inventory by the end of the quarter. Gartner expects some of this volume to be sold during the next couple of quarters, because the channel is likely to lower the prices to dispose of the stock.
The lower results in the first quarter of 2012 have led us to be cautious about sales for the remainder of the year. The continued roll-out of third generation (3G)-based smartphones by local and regional manufacturers such as Huawei, ZTE, Lenovo, Yulong and TCL Communication should help spur demand in China. In addition, the arrival of new products in mature markets based on new versions of the Android and Windows Phone operating systems (OSs), and the launch of the Apple iPhone 5 will help drive a stronger second half in Western Europe and North America. However, as we are starting to update our market forecast we feel a downward adjustment to our 2012 figures, in the range of 20 million units, is unavoidable.
Now a decline of 20 million units over the course of a year is not much when total sales are expected to be north of 1.5 billion units. Samsung and Apple took more than 49.3% of total smartphone sales of 144.4 million units in the first quarter. The smartphone market has become a two-horse race, especially at the top-end of the market. Whether or not Nokia/Microsoft want to or can get into that race remains to be seen.
The open race is at the low end of the market and that’s where RIM and Motorola will have to fight it out with the low-cost makers like ZTE. Nokia/Microsoft would probably prefer not to play down here. Neither do RIM or Motorola, but that’s where the race is still undecided.
The Gartner press release is available here.