Nokia sales drop in third quarter as Apple and Samsung continue to dominate

Nokia took a tumble in the third quarter, falling from third to seventh in the rankings of worldwide smartphone sales as Samsung and Apple continued to dominate the space, according to new stats from Gartner.

"Nokia had a particularly bad quarter with smartphone sales" of just 7.2 million, Gartner said. The company, however, did not have any major releases in the second quarter and is betting big on its Windows Phone 8-based Lumia line-up, which is set for release this month.

"The arrival of the new Lumia devices on Windows 8 should help to halt the decline in share in the fourth quarter of 2012, although it won't be until 2013 to see a significant improvement in Nokia's position," Gartner said.

The company fared a bit better with overall mobile phone sales. Though they declined by 21.9 per cent during the quarter, sales of "82.3 million were better than Gartner's early estimate, largely driven by increased sales of the Asha full touch range," Gartner said.

Nokia's drop allowed the troubled Research in Motion to capture the number three spot behind Samsung and Apple, while HTC came in number four. "[But] both HTC and RIM have seen their sales declining in past few quarters, and the challenges might prevent them from holding on to their current rankings in coming quarters," said Anshul Gupta, a principal research analyst at Gartner.

Together, Apple and Samsung control 46.5 per cent of the smartphone shelf, "leaving a handful of vendors fighting over a distant third spot," Gupta said. Samsung sold 55 million smartphones, while Apple sold 23.6 million, Gartner said.

On the OS front, Android continued to increase its share, up almost 20 per cent in the latest quarter for 72.4 per cent of the market. Apple's iOS came in second with 13.9 per cent, followed by RIM with 5.3 per cent. With the iPhone 5 launch and the holiday season on the horizon, however, Apple's share will likely increase in the coming months, Gartner said.

Similarly, Microsoft's OS lost its footing, as the wait for Windows Phone 8 dampened demand for Windows Phone 7 devices, but that might pick up in the fourth quarter, as well.

The growth of next-quarter operating system markets may not come in the form of smartphone activations, though. Gartner analysts said that phone makers shouldn't expect the usual end-of-the-year boost from seasonal buyers. Instead, predictions of lower-than-usual holiday sales point to cautious consumers looking to curb their spending, or the idea that new gadgets like tablets simply make more attractive gifts.

Overall, third quarter mobile phone sales reached almost 428 million units, a 3.1 per cent decline from the same period last year, while smartphones, which account for 39.6 per cent of total mobile sales, grew 46.9 per cent from the third quarter of 2011.

"After two consecutive quarters of decline in mobile phone sales, demand has improved in both mature and emerging markets as sales increased sequentially," Gupta said.

He cited China, currently the world's largest mobile market, where smartphone sales grew, but demand for feature phones remained weak. Mature markets were propped up in part by people replacing existing smartphones with new devices, like Apple's iPhone 5 and the Samsung Galaxy S3.