The knee jerk reaction after the Japan earthquake was that the global supply of technology parts and supply will dampen market sales. Japan is a major supplier of parts and products for the IT and telecommunications industries.
However, Gartner said there are about six to seven weeks worth of inventory of finished products in the channel market and about four weeks' worth of inventory for components.
Even then, Gartner "estimates that manufacturers' sales into the channel will drop in the second quarter of 2011, while sales through to consumers will be flat".
Nokia will also face challenges from Android competitors and from some Japan-induced supply constraints, Gartner said.
OS-wise, competition is expected to heat up in the second quarter as Gartner noted the entry of devices in the mid-tier device market.
"A newly competitive mid-tier smartphone market will drive smartphones into mass adoption and accelerate this trend," Gartner said.
Among the manufacturers, HTC, Sony Ericsson, Alcatel and ZTE have already announced a broader portfolio of mid-tier devices, mainly based on the Android OS, which will reach the market in the second quarter of 2011, Gartner said.
Another interesting development to watch out for is the result of the alliance between Nokia and Microsoft.
Overall, however, Gartner said it is cautious in its forecast for the rest of the year because of emerging market trends.
"The 13.3 million-unit growth in channel inventory, along with some softness in demand from users in emerging markets registered at the start of the second quarter of 2011, is causing us to be cautious about sales in the remainder of the year," said Milanesi. "We are currently revising down our 2011 sales estimate as a result of these trends, and expect it will likely drop to between 1.790 billion and 1.795 billion units."
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