Nokia's share of the global handset market fell to 35 percent in the first quarter from 36.2 percent in the fourth quarter, research group Gartner Dataquest said. Second-place Motorola saw its market share slip to 14.7 percent from 16.9 percent.

Gartner said Nokia is well placed to gain market share this year with new color display, music and camera phones. No. 3 Samsung Electronics from South Korea, which focuses on the most expensive models, had a 10.5 percent share versus 9.3 percent.

Gartner, which measures actual sales to consumers, said 113 million handsets were sold in the January-to-March period, an increase of 18.2 percent over the year-ago quarter.

The sharp increase, after two years of moderate decline and sluggish growth, was driven by cheaper-than-ever handsets, which still have popular functions such as musical ringtones.

"It's a storming start of the year. Low-end and low-cost phones did well, especially in China and western Europe," said Gartner analyst Ben Wood.

Competition is increasing with some 100 companies now producing mobile phones, most of which focus on cheap handsets and compete mostly on price. Financial analysts expect average selling prices to drop further this year, by about 5 percent, as a result of more cheap handset sales, offset partly by expensive camera phones.

The other top five players, Germany's Siemens and Japanese-Swedish joint venture Sony Ericsson, lost ground. Siemens slipped to 7.6 percent from 8.2 percent, and Sony Ericsson stayed ahead of South Korea's LG with a 4.8 percent share, down from 5.4 percent.

By: DocMemoy
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