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Color screens, polyphonic ring tones, and built-in cameras persuaded more people to buy a new mobile phone in the third quarter than analysts at Dataquest, a unit of Gartner, had expected, the research company said Tuesday.

An estimated 104.3 million mobile phones were sold to end-users worldwide in the third quarter, up 7.8 percent from 96.7 million in the year-ago period, the company said in a statement.

"We were not expecting the effects of new terminals hitting the market to kick in as much as we saw in the third quarter. We were expecting growth, but not almost 8 percent growth," Carolina Milanesi, an analyst with Dataquest in Egham, England, said.

Momentum Shift?

This is only the second time ever that over 100 million phones were sold in a third quarter, according to Dataquest. The company predicts that momentum from the third quarter will carry over into the already normally strong fourth quarter.

In mature markets, such as Western Europe and North America, sales were driven by new features, while vendors successfully targeted emerging markets, such as Eastern Europe, China, South America, and Africa, with basic phones, said Milanesi.

As a result of the high sales, Dataquest adjusted its full year 2002 phone sales forecast to between 415 million and 420 million units, at the high end of its earlier forecast of between 410 million and 420 million, Milanesi said.

Market Leader

Nokia strengthened its position as market leader in the third quarter as its slew of new phones was well received. The Espoo, Finland, phone maker sold 37.4 million phones in the third quarter, which gives it a 35.9 percent share of the worldwide market, up from 34.1 percent in last year's third quarter, according to Dataquest.

Samsung Electronics continued to grab market share with 11.1 million phones sold, up 52.5 percent from last year and good for 10.6 percent of the market. That figure represents amazing growth for the South Korean vendor, Milanesi said, adding that Samsung is headed for an overall market share of 10 percent in 2002. Samsung is the world's third largest handset maker.

Motorola and Sony Ericsson Mobile Communications both saw declines in market share. The world's second and fifth largest handset makers respectively, have trouble getting new handsets to market, Milanesi said. Sony Ericsson, especially, needs to release new handsets to stay competitive, she said.

New Products Needed

"Sony Ericsson has been relying on the T68 and the T68i. It is a successful handset, but they definitely need to come out with more products to target different parts of the market," said Milanesi.

Motorola sold 15 million phones, giving it 14.4 percent of the worldwide market, down from 15.2 last year. Sony Ericsson sold 5 million handsets, for a 4.8 percent market share, down from 7.4 percent last year. The drop for Sony Ericsson is even worse since last year's number is based only on Ericsson sales, Dataquest said.

Sony Ericsson, a joint venture between Telefonaktiebolaget LM Ericsson and Sony, started operations on October 1 last year.

Germany's Siemens continues to benefit from its low-priced market approach. The company is the world's fourth largest handset vendor with 7.8 percent of the market. Siemens sold 8.1 million phones, up from 7.2 million last year, according to Dataquest.

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