To the extent that smart phone sales are correlated with economic conditions, it is conceivable that economic conditions again are taking a toll on consumer spending. According to Gartner, global sales of mobile phones to end users reached 419.1 million units in the first quarter of 2012, a two percent decline from the first quarter of 2011.
Also, AT&T Chief Executive Officer Randall Stephenson recently noted that traditional economic indicators have become less reliable. “I’ve never seen it like this,” Stephenson said. The AT&T CEO means that the indicators are contradictory.
“Small business starts are still negative,” he said. “That used to be the early warning indicator.” That suggests there are key economic constraints. But there is strength in some parts of the consumer market. And new home construction is picking up, after a four to five year lull.
But he real driver is businesses “hiring and putting people on payroll; that’s when our business catches leverage and starts to take off,” Stephenson said. “We’re still not seeing that.”
That would mark a rare occasion when smart phone sales failed to grow, and is the first dip since the second quarter of 2009, which might arguably be related directly to the “Great Recession” of 2008.
Of course, it always is possible that entirely unrelated factors are at work, such as component shortages, key supplier delays of new products, or consumers waiting for new models of hit phones to be released.
Indeed, that is a plausible explanation. “Global sales of mobile devices declined more than expected due to a slowdown in demand from the Asia/Pacific region,” says Anshul Gupta, principal research analyst at Gartner. “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 smart phone deals arriving later in the year.”
But something else might be at work. “The lower results in the first quarter of 2012 have led us to be cautious about sales for the remainder of the year,” says Annette Zimmermann, principal research analyst at Gartner. “As we are starting to update our market forecast we feel a downward adjustment to our 2012 figures, in the range of 20 million units, is unavoidable.”