Smartphones Advance as Overall Phone Sales Drop

Global mobile handset sales fell 9.4 percent year on year to 269.1 million units in the first quarter, even as smartphone sales rose 12.7 percent to 36.4 million units, according to Gartner.

Overall, the mobile-device market recorded its biggest quarter-to-quarter contraction since the research firm began monitoring the market on a quarterly basis in 2001, said Gartner Research Director Carolina Milanesi. "This was also the first time the market contracted year over year during the first quarter, a period traditionally helped by strong seasonality in the Asia/Pacific market," she said.

Smartphones Shine

Still, there were some early signs of a potential recovery in markets such as North America and China, Milanesi observed.

"North America actually grew, and since the United States was hit first by the economic crisis, then we have to wonder if things are starting to stabilize a bit in the mobile space," Milanesi said. On the other hand, recent growth in western Europe may be attributable more to how bad sales were "there last year in comparison to this year."

Milanesi also expects the China market to bounce back in the second half of this year. "The subsidies and incentives that the Chinese government has given vendors have helped to reinvigorate the market and the excitement around 3G rollouts," Milanesi said. "It is starting to drive the attention, and we expect that to be the case in the second half."

Gartner analysts said the continuing rise in sales racked up by smartphone vendors such as BlackBerry maker Research In Motion and iPhone maker Apple is testimony to just how instrumental the merging of touchscreen capabilities with services and applications has become.

"'Touch for the sake of touch' was enough of a driver in the mid-tier space," said Roberta Cozza, a principal analyst at Gartner. "But tighter integration with applications and...