Sluggish economy hurts smartphone sales in Q3

The struggling global economy has taken a toll on worldwide smart phone sales in the third quarter, with sales growth the weakest in four years, according to new data from Gartner Inc.

In the third quarter, 36 million devices were sold, an 11.5% increase, compared with the 32.7 million sold in the same period last year, Gartner said. It is the weakest year-over-year growth reported since Gartner began tracking smart phones in 2004.

"The current economic climate is negatively impacting sales of higher end devices," said Roberta Cozza, a Gartner analyst, in a statement. Cozza said that in the future, smart-phone sales will continue to grow, but at a slower pace. Mobile carriers still tie the devices to two-year contracts with monthly data plans, "which remain too expensive for the mainstream user," she added.

The results show some positive findings, however, for Apple Inc. and its iPhone, and Research in Motion Ltd., which makes BlackBerry devices. Apple took third place globally and in North America for smart-phone sales by operating system for the Mac OS X in its iPhones, beating out Microsoft Corp.'s Windows Mobile operating system for the first time, the report said. Apple sold 4.7 million devices, while devices running the Windows Mobile operating system totaled 4 million, a 3% decline for the quarter.

Nokia smart phones, as well as the Symbian operating system, finished on top, but Nokia device sales, which totaled 15.4 million, fell for the first time, dropping by 3%. All devices running the Symbian operating system declined 12% for the third quarter.

Cozza said Nokia is feeling pressure from increased consumer smart-phone competition, including the iPhone 3G. The recently announced touch-screen N97 smart phone from Nokia came on the scene too late and won't be available before the first half of next year, she noted.

The second-place finisher for both devices and operating system sales was RIM with 5.8 million units sold in the quarter. That amount represented an 81% increase over the prior year.