Mobile phone sales grow -- except in Japan

Worldwide mobile phone sales grew 21.5 percent year on year to 251 million units in the third quarter, with India and China driving growth, according to research from Gartner Inc.

Gartner predicts that sales for the year will fall just shy of one billion phones. Sales should reach 986 million units by the end of the year, the research group said.

Europe, one of the most mature mobile phone markets in the world, showed just 1.9 percent growth over the same quarter last year.

Asia Pacific experienced the most dramatic gains, with sales of 80.8 million units during the third quarter, an increase of 54.7 percent over the same period last year. That significant growth happened despite a decline in sales of 4.7 percent in Japan compared to the third quarter in 2005. An increase in retail outlets and better distribution channels in emerging markets such as Indonesia, Philippines, and India significantly offset that loss though, driving growth in the region.

Other regions of the world also reported solid growth. In Eastern Europe, the Middle East and Africa, sales grew 19 percent compared to last year, to 48 million phones. North American sales reached 40.8 million units, up 12 percent. Sales in Latin America grew 13.7 percent over the same time last year, to 29.8 million phones.

Gartner reported that the smaller phone makers will increasingly struggle to compete against the giants. In the third quarter, Nokia, Motorola, and Samsung Electronics together accounted for 68 percent of phone sales.

Among those three, competition is fierce. While Motorola increased its market share during the quarter, it lost its number one position in Latin America, to Nokia, and also lost its number two spot in Western Europe, to Samsung. Nokia has the largest market share worldwide, but failed to grow its market share in North America during the quarter.

Nokia's worldwide market share was 35.1 percent, up from 32.5 percent in the same quarter last year. Motorola had 20.6 percent, compared to 18.7 percent during the third quarter in 2005. No. 3 vendor Samsung had 12.2 percent market share, just slightly down from 12.5 percent last year.