Smartphone Makers' Shares Hit on Report of Slowing Sales

SAN FRANCISCO (Dow Jones) -- Research In Motion, Palm, Nokia and Apple all saw their shares take a hit Monday, retreating following a research report that showed a dramatic slowdown in the sales growth of so-called smartphones.

The term smartphone refers to devices, such as the BlackBerry, the iPhone and the Palm Treo, designed to handle email, Web surfing and organization tasks as well as phone calls and text messages. Such devices have been the fastest-growing segment of the wireless device market, thanks to growing demand for mobile computing products.

A report from market research firm Gartner found that sales of smartphones grew nearly 16% globally during the second quarter. While strong, that represented a sharp drop from the 55% growth rate in the same period last year.

"The current economic environment continues to negatively impact the market, limiting consumer spending and replacement purchases in general," wrote Roberta Cozza, principal analyst at Gartner, in the report.

By midday, shares of BlackBerry maker Research In Motion were down more than 7% at $99.34 -- the stock's lowest price in nearly six months.

Palm was also down, its shares off more than 7% at $7.12. Mobile-phone giant Nokia -- which also has the largest share of the smartphone market -- was off more than 5% at $19.48.

Shares of Apple traded down nearly 4% at $154.02. The report found that the company's share of smartphone sales fell during the second quarter as it cleaned out inventories ahead of the 3G iPhone, which went on sale in July. The company's sales are expected to increase "dramatically" in the second half of the year amid strong demand for the new device, the report predicted.

Worldwide sales of smartphones reached 32.2 million units in the second quarter, according to Gartner. About 25% of that came from North America, where sales boomed nearly 79% from the same quarter last year.

Nokia had a share of about 48% of total sales for the period, while RIM accounted for 17.4%. RIM's market share had nearly doubled from last year, Gartner noted.

(END) Dow Jones Newswires

Posted to the site on 8th September 2008