Chinese bargain hunters pull down global mobile sales

As consumers in China preferred to defer their mobile handset purchases in the hope of better bargains later this year, global mobile sales have got truncated. This is the first time since the second quarter of 2009 that the market exhibited a decline.

According to a report by Gartner, handset sales during January to March declined by two per cent as compared to the same quarter last year, internationally. Though Indian sales grew around six per cent, it was China which brought overall mobile sales down for the region as well.

Worldwide mobile handset sales stood at 419.1 million units as compared to 427.8 million units in the first quarter of 2011. The major reason being slowdown in demand from the Asia-Pacific region. The other reason was lack of new product launches. A number of international handset makers and local manufacturers have announced plans to launch handsets in the second and third quarters.

“The first quarter, traditionally the strongest for Asia, which is driven by the 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,” said Anshul Gupta, principal research analyst at Gartner.

But Gupta does not see the impact of economic slowdown on mobile sales. In fact, he expects emerging markets which are in a growth momentum, like China and India, to drive growth, especially in the smartphone segment.

“The continued rollout 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,” said Annette Zimmermann, principal research analyst at Gartner. Added to that, the firm believes that arrival of new products in mature markets based on new versions of the Android and Windows Phone operating systems (OSs), and launch of the Apple iPhone 5 will help drive a stronger second half in Western Europe and North America.

The lower results in the first quarter of 2012, however, have led Gartner to be cautious about sales for the remainder of the year. They are making a downward adjustment of their market forecast for 2012 sales, in the range of 20 million units.

Smartphone sales, however, have been on an upward path. The market, which reached 144.4 million units in the first quarter, grew 44.7 per cent. During the quarter, the top two leading smartphone vendors, Apple and Samsung, raised their combined share to 49 per cent from 29 per cent. They also widened their lead over Nokia, whose smartphone market share dropped to around nine per cent.