New iPhone? No thanks, say cash-conscious Europeans

Luke Peters holds the new iPhone 4S outside the Apple store in Covent Garden, London October 14, 2011. Apple Inc's new iPhone went on sale in stores across the globe on Friday, with fans snapping up the final gadget unveiled during Steve Jobs' lifetime, many buying the phone as a tribute to the former Apple boss.

(Reuters) - Weakening economies and falling prices of rival smartphones are hurting sales of Apple iPhones across Europe, data from research firm Kantar Worldpanel ComTech showed on Thursday.

The October roll-out of Apple's iPhone 4S boosted its position in Britain and United States, but the new phones failed to excite interest in continental Europe, where Apple's share of the fast-growing smartphone market slipped.

The smartphone industry is dominated by Google, which has stormed the market with its free Android platform.

"In Great Britain, the U.S. and Australia, Apple's new iPhone continues to fly off the shelf in the run-up to Christmas. However, this trend is far from universal," said Dominic Sunnebo, global consumer insight director.

Apple's market share in the 12 weeks to end-November rose to 36 percent in the United States from 25 percent a year earlier and in Britain to 31 percent from 21 percent, Kantar said.

However, in France its share slipped to 20 percent from 29 percent and in Germany to 22 percent from 27 percent. Similar drops were seen in Italy and Spain.

"The French market is showing increasing signs of price sensitivity," Sunnebo said.

In part, the European sales of the expensive Apple model were hit by weakening economies across the continent.

Euro zone GDP grew just 0.2 percent in the third quarter and most economists expect it to contract in the fourth and also in the first three months of next year, sending the bloc back into recession after its two-year recovery from the worst global financial crisis since the 1930s.

The euro zone's own crisis with government debt has scared off investment and eaten into business and consumer confidence, particularly since August when investors intensified their scrutiny of the bloc's problems.

European consumers are keeping a lid on their expenses as government spending cuts and job losses deprive companies of demand for goods and crush exports.

Google had market shares of between 46 and 61 percent in all markets. Cellphone makers like Samsung Electronics, Sony Ericsson, LG Ericsson and Motorola Mobility all use its Android platform in their phones.

"In Germany, Android achieved a dominant 61 percent share of smartphone sales in the latest 12 weeks, with the Samsung Galaxy S II the top selling handset," Sunnebo said.

(Reporting By Tarmo Virki; Editing by Jodie Ginsberg)