Sales of mobile phones in the mature markets of Western Europe and North America slightly recovered after a difficult start. Western Europe reached close to 42 million units while North America surpassed 44 million units in the second quarter of 2008.

"The economic environment continued to negatively impact mobile phones sales in both mature and emerging markets," said Carolina Milanesi, research director for mobile devices at Gartner, based in Egham, UK.

"Consumers in mature markets continued to favour mid-tier devices over high-end devices, while new subscribers continued to join mobile networks in emerging markets during the quarter. However, replacement sales remained weak, as consumers faced higher prices for fuel and food in addition to higher levels of inflation. Despite this, we remain positive that mobile phone sales in 2008 will reach 1.28 billion units."

Nokia sold 120.4 million mobile phones in the second quarter of 2008 and widened its lead to control 39.5 percent of the global mobile phones market. Sales in the ultra low-cost segment remained strong thanks to Nokia’s distribution strategy, economies of scale and brand power. However, competition is increasing in this segment and at the high end.

In July, Nokia applied strategic price cuts in its mid-tier portfolio, which put pressure on competitors such as Sony Ericsson and LG. Gartner expects Nokia to increase its market share in the second half of 2008 thanks to its wide portfolio, but also its long-awaited touch-screen device will be a high-mid-tier one, rather than the expected high-tier, device. This will help drive sales, assuming it has the right look, specification and usability.

Samsung’s mobile phones sales into the channel reached 45.7 million units. Good inventory management, however pushed sales up and helped Samsung reach a market share of 15.2 percent in the second quarter of 2008. Samsung’s strong performance this quarter helped widen its lead over third-placed Motorola. "We expect Samsung’s sales to remain strong in the second half of 2008 as new products such as the Omnia pick up momentum," said Ms Milanesi.

With mobile phone sales reaching 30.4 million units, Motorola’s worldwide market share dropped further in the second quarter of 2008 at -4.5 percent year-on-year. Nevertheless, sales grew quarter-on-quarter and reached 30.4 million units.

Motorola’s portfolio remained uncompetitive because of its lack of 3G and "hot" applications such as GPS and good-quality internet browsing. Gartner remains sceptical that the revamp of products such as the Ming in response to the touch-screen frenzy seen in the market is a strategy that will help boost sales. Motorola runs the risk of having to lower the prices of its handsets to compete because of a lack of features.

LG’s positive momentum continued in the second quarter of 2008, with mobile phones sales amounting to 26.7 million units. This represented a 2 percentage-point increase year-on-year.