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. Last Updated: 07/27/2016

Nokia Hit as Worldwide Cellphone Sales Surge

AMSTERDAM, Netherlands -- Cellphone sales could reach half a billion this year, but Finland's Nokia and U.S.-based Motorola are under pressure from German rival Siemens and South Korea's Samsung and LG, a survey found on Monday.

"The mobile phone market is on fire. We're seeing phenomenal growth," said Ben Wood, an analyst at Gartner Dataquest which published third-quarter statistics for the handset market.

"At the start of the year we expected to reach 460 million to 470 million unit sales, but now it's likely it could be half a billion when we close the year," he said.

A total of 133 million cellphones were bought by consumers in the third quarter alone, Gartner found.

Vendors benefited from a double boost of demand for cheap phones from emerging markets like Russia, India and China, as well as an appetite for color screen and camera phones in saturated markets where consumers traded in their old models.

The quarter's biggest gainer was No. 4 handset-maker Siemens, which saw its market share increase to 9.1 percent from 7 percent in the second quarter. The company's relatively cheap products did well in Europe.

Siemens' success eroded the position of the world's biggest handset-maker, Nokia, whose global strength is based on its position in Europe. Nokia saw its market share drop to 34.2 percent from 35.9 percent a quarter ago. The Finnish firm has been hoping to reach a 40 percent global market share soon.

Gartner's numbers confirmed a trend also spotted by rival research firm Strategy Analytics on Friday, which noted that Nokia's European market share had dwindled to 42.1 percent in the third quarter from 48.8 percent in the second.

Strategy Analytics measures sales to distributors while Gartner measures sales to end-users, which gives a better picture of current consumer preferences.

Nokia challenged the numbers, saying that another research group called GfK had said its third-quarter western European market share had dropped to 45 percent from 46 percent in the year-ago quarter. GfK does not publish its statistics.

Nokia also said Gartner and Strategy Analytics were too optimistic in their total market forecasts. Nokia reckons only 460 million cellphones will be sold in 2003. A lower total market size would lift Nokia's market share.

"There's no doubt that we have better understanding and more resources and people on the ground to make estimates for the total market than these research groups," a Nokia spokesman said. Most of Nokia's rivals also expect the market to total around 460 million units in 2003.

Nokia partly compensated for its weaker European position by growing in other geographic regions -- in emerging markets like Russia, India and China, but also with a new lineup of cheap CDMA phones used in the Americas and parts of Asia.

Motorola ended the quarter at 14.7 percent, up from 14.6 percent in the second quarter.

Third-place Samsung ended at 11.2 percent, up from 9.9 percent in the second quarter, while LG came in at 5.3 percent, up from 3.8 percent. LG overtook Japanese-Swedish Sony Ericsson as the No. 5 handset-maker.

Sony Ericsson's share also ended at 5.3 percent, but it sold just a few thousand phones fewer than LG.