Are Asian Consumers in Emerging Markets Waiting for Smarter Phones?

Samsung looks for more success in 2012 with Galaxy III

A new report from Gartner claims that because of decreased demand from Asia, worldwide sales of mobile phones dropped two percent in the first quarter of 2012 on the same time the previous year. The overall total for the first quarter was 419.1 million units shipped, according to the research firm.

Anshul Gupta, principal research analyst at Gartner, explained:

Global sales of mobile devices declined more than expected due to a slowdown in demand from the Asia/Pacific region. […] The first quarter, traditionally the strongest quarter for Asia – which is driven by Chinese New Year, saw a lack of new product launches from leading manufacturers, and users delayed upgrades in the hope of better smartphone deals arriving later in the year.

Looking at the breakdown of mobile vendors (see interactive chart below), however, it should be noted that not everyone did poorly, far from it in fact. As we mentioned previously, Samsung (005930:KS), who displaced Nokia as the top mobile maker in the quarter, saw a whopping 25.9 percent increase in units shipped over last year, accounting for 40 percent of the Android market while no other vendor could surpass 10 percent. Not to be outdone, Apple (NASDAQ:AAPL) saw a very productive quarter as well with its sales growing 96.2 percent thanks to strong iPhone sales in China.

Gupta noted when speaking to Business Week that the market for feature phones and low-end handsets has declined significantly with consumers waiting for better smartphone deals. We hate to point fingers at Nokia (HEL:NOK1V; NYSE:NOK) again, but its sales dropped 22.7 percent. The breakdown of operating systems (as you can see below) shows that while Android and iOS have skyrocketed, Symbian has plummeted. It’s notable that RIM didn’t have a particularly good quarter either.

While it may have looked like a good strategy to target the so-called ‘next billion’ by focusing on feature phone offerings for emerging Asia markets (again, sorry Nokia…), it appears as though consumers in those markets might just be waiting for something a little ‘smarter.’