The competition among phone makers is as tough as it gets this year, a recent report released by Gartner earlier this week reveals. Despite sales going down 4.6 percent in the fourth quarter compared to the same period last year, the industry did experience growth in mobile phone sales to end users.

 

According to the report, the mobile phone sales to end users totaled 314.7 million units, in the context of a continuous struggle from manufacturers, who are now facing a harsh economic context and low consumer confidence in both mature and emerging markets.

 

“Mobile phones have traditionally been one of consumers’ preferred presents for Christmas. However, in the fourth quarter of 2008 consumers were concerned about taking on the contract associated with the most attractive products on the market,” Carolina Milanesi, research director for mobile devices at Gartner, said in the report.

 

Sales into the channel reached 297.3 million units, while sales to users went short of 314.7 million units in the fourth quarter, the report shows. This difference can be attributed to the channel reducing the inventory it holds, due to low consumer confidence.

 

This tendency will continue in the first and second quarters of 2009, Milanesi explained. While the channel will need to begin re-stocking in the second half of 2009, the market is not expected to begin recovery earlier than 2010, she added.

 

Although Nokia kept a strong market share of 38.6 in 2008, its smartphone sales aren’t doing very well, due to the lack of touch-screen functionality in its devices, Gartner said. Other brands, such as Sony Ericsson or LG, lost their places in the hierarchy, but Samsung for example had a strong finish at the end of the year.

 

In North America, smartphones continued to drive customers to upgrade their devices, and as a proof of that, smartphones sales accounted almost 20 percent of total sales in the region, thanks to the launch of devices such as G1, or BlackBerry Storm.