Gartner reduces handset forecasts for 2011

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Gartner reduces handset forecasts for 2011

Smartphones see stronger than expected growth, and HTC reaps the richest rewards, taking RIM's number two spot

By CAROLINE GABRIEL

Published: 19 May, 2011

READ MORE: Metrics | HTC | Handset | Android

Researchers at Gartner have lowered their forecast for 2011 handset sales, citing increased inventory and weakening demand in emerging markets. However, it sees smartphones continuing to experience strong growth, with Android players cashing in.

"The 13.3m unit growth in channel inventory, along with some softness in demand from users in emerging markets registered at the start of the second quarter of 2011, is leading us to be cautious about sales in the remainder of the year," said VP Carolina Milanesi in the report. She has reduced full year estimates to a range of 1.79bn to 1.795bn units, though this would still be up on last year's sales of 1.6bn.

In the first quarter, Gartner says shipments reached 427.8m, up 19% year-on-year. Nokia kept its market lead, shipping 107.56m units, but its share was down to its lowest level since 1997 at 25.1%, compared to 30.6% in Q110. In the top 10, the only significant growth in share was seen at Apple, up from 2.3% to 3.9%; ZTE, up from 1.7% to 2.3%; and most dramatically, HTC, up from under 1% of the overall cellphone sector to 2.2%. Huawei also saw marginal growth, from 1.5% to 1.6%, while all the others - Samsung, LG, RIM, Motorola and Sony Ericsson, slipped in share terms. LG, Motorola and Sony Ericsson also fell back in terms of actual handset shipments. After Nokia, Samsung increased sales from 64.9m units to 67.78m and while LG slid from 27.2m to 24m.

Smartphones were the main driver, accounting for 23.6% of overall sales, an increase of 85% year-on-year. Analyst Roberta Cozza said the figure could have been higher, but several flagship devices were launched after the holiday season, for shipment in Q2. "We believe some consumers delayed their purchases to wait for these models," she said. HTC overtook RIM to take second place in the smartphone segment.

By operating system, Android shipped 36.7m devices, followed by Symbian and Apple iOS with 27.6m and 16.88m respectively. Windows Phone reached 1.6m units as it struggled to gain serious attention from Android focused OEMs.

The Japanese earthquake and tsunami are expected to have a smaller effect on the mobile devices market than initially expected. There are currently six to seven weeks' worth of inventory of finished products in the channel and about four weeks' worth of inventory for components, says Gartner, which forecasts that manufacturers' sales into the channel will drop in the current quarter, while sales through to consumers will be flat.