Nokia shipped 111.7 million units or nearly four in 10 handsets shipped worldwide, a 10.8% increase from the 100.8 million units sold in the second quarter, a market research firm said.

"Nokia is capitalizing on the increasing popularity of multimedia- and business-oriented applications for mobile phones." iSuppli analyst Tina Teng said.

Nokia also led other handset makers in operating profit in the third quarter, achieving an exceptionally healthy 22.2% operating margin. The average for the top five suppliers was 10.5%.

Nokia's strong results were part of an overall robust mobile phone market worldwide. Driven by high replacement rates in Europe and solid first-time sales in emerging markets, global shipments rose 6.4% from the second quarter to 266 million units. Year-to-year, shipments were up 15.4% from 245.3 million units.

Besides Nokia, Samsung also benefited from the rising global market, increasing shipments quarter-to-quarter by 13.9% to 42.6 million units. The increase boosted its market share 1 percentage point to 15.1%, and gave the Korean company a 2.2 percentage point lead over No. 3 ranked Motorola of the U.S.

Motorola lagged the handset market's overall growth, increasing shipments by only 2.8% from the second quarter to 36.5 million units, according to estimates from iSuppli. Motorola's actual numbers were delayed until after it reported earnings this week.

Rounding out the top five were Sony Ericsson and LG Electronics. Sony Ericsson managed a 4% quarter-to-quarter increase in shipments, but its market share fell slightly to 9.2% from 9.4%. LG, on the other hand, posted a 14.7% sequential rise to 21.9 million units. LG's market share rose to 7.7% from 7.2%.

Most of LG's growth was in the price-sensitive emerging markets, such as the Middle East, Latin America, India and China. As a result, the vendor's average selling price fell quarter to quarter to $124 from $152.30.