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Handset sales drop for first time in mobe history

Economic woes beget mid-range lane-hoggers

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It had to happen sooner or later - handset sales in Europe and Japan have dropped for the first time, and growth in the US is looking a bit sleepy too.

Sales have dropped by 16.4 per cent in Europe, with Japan likewise losing interest to the tune of ten per cent. US sales are up, but only by a measly 2.4 per cent compared to the first half of last year.

The figures come from Gartner, and make sober reading. The worldwide handset market is growing – by almost 14 per cent since last year - but the growth is in developing markets such as India, the Middle East and Africa.

In Europe and the USA the gloomy economic situation is making punters more nervous about upgrading their phones - most of them are going for sensible mid-range feature-phones rather than high-end smartphones.

The move towards the mid-range is bad news for Sony Ericsson, which has slipped to fifth place in the vendor line-up. That puts it behind LG whose touchscreen handsets have helped them shift 23.6 million phones, though Gartner notes that the company will need to bulk out its mid-range if current trends continue.

Samsung also rode a touchscreen wave, securing its second place above Motorola, with the beleaguered US manufacturer shifting less than 30 million phones compared to Samsung's 42 million.

Of course, that's still less than half what Nokia shifted during the same period - more than 115 million handsets. Last year Nokia had 35.5 per cent of the world market, this year 39.1 per cent: while Symbian handsets might get all the attention, it's those mid-rangers that are putting Nokia into such a lead over the competition.

With the European market saturated, and the economy looking a little unstable, punters need compelling reasons to upgrade to top-end handsets. A pretty case and 3G connectivity might not swing it for Apple's upcoming new iPhone, but then that's what we said last time... ®

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