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Mobile market shrinks; Gartner blames economy, iPhone 5

Research company says worldwide sales of mobile phones declined 2.3 percent in second quarter amid "challenging economic environment" and hopes for fall's device launches.

Samsung's growth in the second quarter got a boost from sales of its flagship Galaxy S3 device. Josh Miller/CNET

The worldwide mobile phone market shrank in the second quarter of this year, with sales falling by 2.3 percent compared to the same quarter a year ago, according to research company Gartner.

The reason for the decline was the "challenging economic environment," Gartner said, as well as phone owners holding out for high-profile device launches later this year such as Apple's iPhone 5.

Gartner warned that the third quarter may be "weaker than usual" for Apple depending on when exactly the iPhone 5 is released. The device is expected to be announced in September and launched a month or two later.

Nokia saw its market share drop 3 percentage points year over year for the second quarter, Gartner added, while sales fell by 14.8 percentage points. Motorola, LG, HTC, and BlackBerry maker Research In Motion all also saw losses in market share, while Apple and Samsung's rose by 2.3 percentage points and 5.3 percentage points, respectively.

Worldwide mobile device sales to end users by vendor in Q2 2012 (thousands of units) Gartner

Samsung's growth was aided by strong Galaxy sales -- particularly of its flagship Galaxy S3 device, which reached 10 million in the first two months after its release.

Overall global sales of mobile devices reached 419 million units in the quarter, with smartphone sales up by more than 42 percent year-on-year.

Emerging markets such as China and phone makers pushing 3G will "drive the smartphone market upward," Gartner said, while feature phones sales will remain under pressure. Smartphones accounted for around 37 percent of all mobile devices sold in the second quarter of this year.

The research firm has previously said it expects to see 1.9 billion mobile phones sold in the course of 2012.

Samsung Galaxy S III Verizon Wireless