Mobile phone market growth slumped in the third quarter, with the grim economic climate prompting consumers to cut back or delay purchases, particularly in western Europe, research firm Gartner reported.
Global sales of all mobile phones grew an annual 5.6 percent in the third quarter to 440.5 million phones, down sharply from 16.5 percent growth in the previous quarter.
“The economic factor is there, definitely,” said Gartner analyst Roberta Cozza. “If you look at smartphones performance in some southern European countries it is flat or declining.”
“Last quarter we warned of a slowdown in smartphone sales in western Europe,” she said.
Global smartphone sales grew 42 percent in the third quarter from a year ago, but that was down from a 74 percent rise in the previous quarter and the more than 100 percent growth rates the market has seen over the last few years.
Gartner said growth in demand for smartphones slipped in advanced markets such as western Europe and the United States as many users waited for new flagship devices, while slowdown also occurred in Latin America and the Middle East and Africa.
Inventories of unsold phones grew by some 20 million phones in the quarter mostly in a preparation for the upcoming holiday-sales season, but Gartner noted Samsung Electronics and HTC saw a bigger buildup of unsold models than others.
Cozza repeated Gartner’s forecast for 11 percent growth for the overall cellphone market for the full year and said the smartphone market should grow 45 to 50 percent in 2011 as stronger uptake in emerging markets and North America compensates for weaker Europe.
The global leader in “daily deals” is now valued at almost $13 billion after saying it increased the offering by 5 million shares to 35 million in total and pricing them at $20 each, above an initial range of $16 to $18.
The debut of the three-year-old company, which sells Internet coupons for everything from spa treatments to nose jobs, is one of this year’s most closely watched. Its tiny float represents just above 5 percent of the company and helped drive up demand and price.
That constraint — one of the smallest floats of the past decade — should support Groupon’s share price when it begins trading on the Nasdaq on Friday under the ticker GRPN, analysts say.
But in the longer run, they cited concerns about competition from the deep-pocketed likes of Google and Amazon.com Inc; the need to spend continuously to drive user growth; and questions about accounting after the company altered its IPO filings twice to change the way it accounted for revenue.
“Groupon is expensive. The $12.8 billion valuation is only achievable because of the low float,” said Rob Romero, head of technology-focused hedge fund firm Connective Capital Management.
Beyond Friday, Groupon shares may prove volatile on concern about the company’s ability to generate long-term profit and revenue growth, plus the likelihood that existing investors will sell some of their holdings at some point.
Top PC maker Hewlett-Packard also saw its worldwide PC shipments grow by 5.3 percent in the quarter, despite reports that the company may spin off its PC business.
Both research firms said growth for the quarter failed to reach earlier projections. IDC said at the end of the third quarter, worldwide PC shipments increased by 3.6 percent year-over-year, below its earlier 4.5 percent growth projection.
Gartner said PC shipments grew by 3.2 percent year-over-year, which was lower than the research firm’s original projection of 5.1 percent growth for the quarter.
Analysts have pointed to sluggish spending because of weak economic conditions as a key reason behind the slowdown in PC growth. The rise of tablets has also hurt shipments.
“For the moment, PCs have taken a backseat to a range of other devices competing for shrinking consumer and business budgets,” said IDC analyst Jay Chou in a statement.
IDC, however, expects PC growth to pick up next year as vendors update their offerings and include more features on laptop devices, he added.
Lenovo posted the fastest growth in the quarter among the world’s top five vendors, according to the two research firms. Gartner put Lenovo’s market share at 13.5 percent, while it put Dell’s share at 11.6 percent.