Gartner: Mobile Phone Sales Decline for First Time in Three Years

Asia/Pacific region fuels decline, says Gartner
By John P Mello
News May 17th 2012

Is the bloom off the rosy market for mobile phones?

Probably not. But recent worldwide sales figures from Gartner should raise a yellow flag in the market.

According to the technology research company, 419.1 million mobile phones were sold in the world during the calendar quarter ending in March. That's a two percent drop from the same period in 2011 and the first time there's been a sales decline in the market since 2009, it said.

The slip was largely due to a sales slowdown in the Far East, explained Anshul Gupta, a principal research analyst at Gartner in the United Kingdom.

“The first quarter, traditionally the strongest quarter for Asia—which is driven by Chinese New Year, saw a lack of new product launches from leading manufacturers, and users delayed upgrades in the hope of better smartphone deals arriving later in the year," he said in a statement.

For consumers, especially those buying off-brand phones, the sales slump could be good news. That's because so-called "white box" phone makers were unable to adjust their production runs during the quarter, resulting in inventory backlogs. "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 research firm predicted.

While Gartner expects sales to pick up as the year progresses, it's shaving 20 million units off its sales projections for the year, according to another of the firm's analysts, Annette Zimmermann.