Gartner attributed the slowdown to "the challenging economic environment" as well a consumer postponements of new orders in anticipation of new models expected in the second half from leading vendors including Apple (Nasdaq: AAPL), the world's most valuable technology company; Samsung Electronics (Seoul: 005930); Nokia Oyj (NYSE: NOK) and others.
The global sales leader was Samsung, the South Korean colossus that sold 90.4 million units, up 30 percent from year-earlier figures, to command a 21.6 percent market share. A year ago, Samsung's share was only 16.3 percent, behind Nokia's top-ranked 22.8 percent, Gartner reported.
This year Nokia was in second place, selling 83.4 million units, for a 19.9 percent share, although the company has reported record losses as it tries to transition from the European Symbian OS to Microsoft (Nasdaq: MSFT) Windows 7 and forthcoming Windows 8 for its Lumia line.
In third place was Apple, with only a 6.9 percent share, after selling 28.94 million iPhones, compared with 19.63 million a year earlier. The Cupertino, Calif., company previously reported phone sales dropped nearly 13 percent from the first quarter.
Gartner principal research analyst Anshul Gupta attributed the slowdown to anticipatin for whatever product Apple announces to upgrade the iPhone 4S, unveiled last October, for fourth-quarter shipment. True to form, Apple executives have declined comment on new products despite industry reports that subcontractors have been building a successor.
Apple shares this week have toyed with their all-time high of $644 set on April 10. In midday Tuesday trading, they were at $636.30, up $6.30, or 1 percent.
Gartner ranked Taiwan's ZTE in fourth place, followed by Korea's LG Electronics, China's Huawei Telecommuncations and TCL Communications.
The share of Motorola Mobility Holdings, which was acquired by Google (Nasdaq: GOOG) in May, fell to only 2.2 percent from 2.4 percent a year earlier, Gartner said. BlackBerry developer Research in Motion's share plunged to only 1.9 percent, or 7.9 million units, from 3 percent, or 12.6 million units a year earlier.
Like Nokia, RIM, of Waterloo, Ontario, is running in the red. Reports have said International Business Machines Corp. (NYSE: IBM) may seek to acquire its BlackBerry enterprise business for its nearly 80 million customers, largely white-collar users in the developed world.
Meanwhile, Gartner estimated the split between vendors running on Google's Android OS and Apple's iOS to 64.1 percent and 18.8 percent this year, from 43.4 percent and 18.2 percent a year ago. All the other OS including Symbian, BlackBerry and Microsoft accounted for the rest.
In the second half, Gartner predicted "the arrival of the iPhone 5 should provide the greatest upgrade opportunity yet" for smartphone users to upgrade.