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Smartphone shipments ease off the gas pedal

Smartphones are still growing at a strong pace around the world, but they aren't immune to economic conditions that have slowed that increase compared to earlier in the year.

Nokia's still the largest smartphone vendor, but competitors are catching up to devices like the N95 shown here. CNET

Smartphone sales slowed a bit in the second quarter amid a weak global economy, but Gartner thinks that's about to change.

The worldwide market for smartphones grew 15.7 percent in the second quarter, as vendors shipped a total of 32.2 million devices. That's pretty solid, but earlier this year the market was growing at a 60 percent clip. Blame a slowing economy around the world and the development of more sophisticated "enhanced phones" running Java or Qualcomm's BREW rather than true smartphone operating systems like Symbian, Windows Mobile, or Apple's OS X, according to Gartner.

Nokia is still the market leader by a huge margin, shipping nearly half of all smartphones sold in the world during the second quarter. The company is not growing nearly as fast as its rivals, however, and lost market share; second-place RIM increased its shipment totals by 126 percent to obtain 17.4 percent market share, and HTC grew its shipments 119 percent to edge out Sharp for third place.

Conspicuously absent from Gartner's top 5 was Apple, which shipped just 717,000 iPhones during the second quarter as it ran down the inventory of classic iPhones ahead of the July launch of the iPhone 3G. Apple should show up in next quarter's rankings, however, as the company sold 1 million iPhone 3Gs in just the first weekend it went on sale. Fujitsu's 1,071,490 units was good enough for fifth place for the entire second quarter.

North America is the fastest-growing region for smartphone sales by far, with shipments up 78.7 percent in the second quarter. This region accounts for just 25 percent of all smartphone sales, however, as our cousins in Europe and Asia got on the smartphone train much earlier. Western Europeans bought 29.3 percent more smartphones in the quarter, while Japanese customers actually bought 24 percent fewer phones than during the same period last year.

The picture should be brighter later in the year, Gartner said. "Wider availability of new touch smartphone models together with the global introduction of the iPhone 3G will help sales of smartphones return to stronger growth in the third quarter of 2008," analyst Roberta Cozza wrote in Gartner's press release.