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Mobile Phone Sales Decline 2.3% in Q2. Are Apple and Samsung Doomed?


It seems like consumers are holding out for new models.


Gartner (IT) has released a new report (via CNET) announcing that worldwide mobile phone sales declined 2.3% in the second quarter of the year, presenting a new challenge to device manufacturers as they prepare for the fall shopping season.

Despite the decline, the tech industry still sold 419 million units during the period. According to Gartner, smartphone sales grew 42.7% and accounted for 36.7% of total mobile phone sales. This could prove to be a positive development for Apple (AAPL), which is expected to release its next-gen smartphone (presumably titled iPhone 5) in September. Samsung may also unveil a new smartphone next month, though it is unknown if the Galaxy Note II or some other unnamed device will be released.

Gartner blames the decline on user anticipation for these new smartphones. With so much promise behind every product Apple plans to release, consumers lose interest in last year's models -- including the iPhone 4S or the original Galaxy Note. Why spend $200 on a new smartphone today if a newer and more exciting iteration is going on sale tomorrow?

This very logic helps and hurts the smartphone industry. Without it, consumers might be more interested in buying the devices that are already on store shelves. However, they also would be less likely to spend months anticipating the next best thing. Apple capitalizes upon this anticipation, using it to ensure that long lines are produced whenever the company releases a new product.

Samsung (SSNLF) has been using a similar technique to build its smartphone business, which recently topped sales of the iPhone by more than 20 million units. Both Apple and Samsung are expected to report positive news during the next quarter.

The same cannot be said for Nokia (NOK), which has all but lost the support of the nation's biggest cellular carrier, AT&T (T). Nokia recently announced that it will sell off a number of assets, which could be another sign of the company's financial struggle. According to Gartner, Nokia's mobile phone sales declined 14.8% during the second quarter.

Editor's Note: This content was originally published on by Louis Bedigian.

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