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

By Louis Bedigian,

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Gartner (NYSE: IT ) has released a new report (via CNET ) announcing that worldwide mobile phone sales declined 2.3 percent 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 percent and accounted for 36.7 percent of total mobile phone sales. This could prove to be a positive development for Apple (NASDAQ: 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 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 (NYSE: NOK ), which has all but of the nation's biggest cellular carrier, AT&T (NYSE: ). Nokia recently announced that it will , which could be another sign of the company's financial struggle. According to Gartner, Nokia's mobile phone sales declined 14.8 percent during the second quarter.

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(c) 2012 Benzinga does not provide investment advice. All rights reserved.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: AAPL , IT , NOK , T

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