New data from Gartner has revealed that mobile phone sales dropped almost 5 percent in the last quarter of 2008 as vendors struggled against low consumer confidence. Total worldwide sales to end users totalled 314.7 million units in the quarter, a 4.6 percent decline from fourth-quarter 2007, with the top five handset vendors all registering a drop in sales. The decline came in a quarter that is traditionally the strongest for the mobile phone industry due to Christmas sales. “Mobile devices in both emerging and developed markets experienced the lowest quarter-on-quarter growth (2 percent) ever recorded in a fourth quarter,” said Carolina Milanesi, research director for mobile devices at Gartner. However, despite the fourth-quarter decline, sales for the full year 2008 reached 1.22 billion units, a 6 percent increase over 2007.

The research firm noted a widening gap between sales into the channel in the fourth quarter (297.3 million) and sales to users (314.7 million), suggesting that the channel is reducing the inventory it holds. The gap was the largest difference recorded since Gartner started measuring the market in 2001. “Efforts to reduce inventory will intensify in the first quarter of 2009 and continue into the second quarter of 2009. In the second half of 2009, the channel will have to start re-stocking and this will help sell-in volumes,” said Milanesi. “This will not mark the start of a market recovery – we do not expect demand to stabilise before 2010.” In terms of market share, Samsung and LG were considered to have outperformed rivals in the quarter, Samsung gaining 4.9 percent over the previous year (to 18.3 percent), and LG rising 1.8 percent (to 8.9 percent).