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Inventories to cap phone market growth: Gartner


A customer talks with a sales representative at the Nokia flagship store in Helsinki September 29, 2010.REUTERS/Bob Strong
A customer talks with a sales representative at the Nokia flagship store in Helsinki September 29, 2010.REUTERS/Bob Strong

By Tarmo Virki, European Technology Correspondent

PARIS (Reuters) - Rising inventories of unsold cellphones and slower demand growth in emerging countries will cap cellphone market growth in 2011, research firm Gartner said on Thursday.

Gartner lowered its 2011 cellphone market view by 10-15 million phones as retailers stocked up after the earthquake and tsunami that struck Japan in March, hitting the supply chains in the electronics and car industries.

"It was panic ... A few days after it, the inventory built up," said Gartner analyst Carolina Milanesi.

Gartner said inventories of unsold phones grew by 13.3 million handsets in the quarter and were now higher than usual, equaling six to seven weeks of sales.

Milanesi said phone makers' total sales would drop in the second quarter from the first, with the market starting to recover over the summer.

"During Q3 we think everything will go in place, and we will have a much stronger Q4 than we had for many years," she said.

Milanesi said there was some softening in demand in emerging markets because of inflation.

(Reporting by Tarmo Virki; Editing by Will Waterman)

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