Full-Year Mobile Phone Sales May Miss Initial Projections: Gartner

By Beecher Tuttle May 19, 2011

Research firm Gartner lowered its 2011 sales estimates for mobile phones on Thursday due to mounting inventories of unsold devices and softer-than-expected demand from users in emerging nations.

Carolina Milanesi, research vice president at Gartner, said that mobile phone inventories have grown to 13.3 million units, mostly due to the devastating earthquake and tsunami that struck Japan in March, according to Reuters. The potential supply chain ramifications of the disaster led many retailers to expand their inventory while they could.

“It was panic ... A few days after it, the inventory built up,” Milanesi told the news source. The more than 13 million handsets remaining in inventory equate to approximately seven weeks of sales, she added.

Gartner expects mobile phone sales to drop in the second quarter, but then quickly recover in the second half of the year.

“During Q3 we think everything will go in place, and we will have a much stronger Q4 than we had for many years,” she told Reuters. Milanesi said that the lower-than-expected demand in emerging countries was mostly due to inflation.

The research firm has cut its full-year sales forecast by as much as 15 million handsets, to between 1.79 billion units and 1.795 billion units.

In the first quarter alone, mobile device sales totaled 427.8 million units, an increase of 19 percent compared to Q1 of 2010. The mass adoption of smartphone devices continued, with an 85 percent jump in the last year. Smartphones now account for 23.6 percent of overall sales.

“This share could have been even higher, but manufacturers announced a number of high-profile devices during the first quarter of 2011 that would not ship until the second quarter of 2011,” Roberta Cozza, principal research analyst at Gartner, noted in a statement.

Gartner speculates that a fair percentage of consumers delayed purchasing a new phone until these models come to market.

Nokia again led the market in sales, but saw its share decrease by 5.5 percentage points year-on-year. The Finnish company's market share of 30.6 percent is the lowest it has been in nearly 15 years.

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Beecher Tuttle is a TechZone360 contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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