There's a new no. 3: Microsoft's mobile loss is Huawei's gain

Not even low-end feature phones have helped Microsoft retain its spot in the global handset list of leaders. The company's total market share of handsets fell by nearly half while Huawei's rose to surpass Microsoft's share. Microsoft shipped 27.8 million phones this April to June; down from 50.3 million a year ago.

Huawei, a China-based company, became the third largest phone vendor of both feature phones and smartphones in the second quarter of 2015, according to Strategy Analytics.

That places Huawei behind only Samsung and Apple, which have long been the top two, although Samsung's trend is falling. And the 30.6 million handsets that Huawei shipped during the quarter puts it well on track to top its internal goal of moving 100 million phones this year.

Huawei's biggest competitor in China, Xiaomi, is also on the way up, shipping 19.8 million phones in the second quarter of 2015; rising from 15.1 million in the year ago period.

Hurting Microsoft -- and helping the others -- is a lack of sales at the high end; the only market that Apple is actually in and a big focus for Huawei and Xiaomi. Hoping to crack the U.S. market, Huawei is selling affordable mid-range handsets direct to consumers with the potential to bring flagships to the market in the future.

Most of the recent Lumia handsets have been budget-friendly or mid-range models. Microsoft hasn't quite pulled out of the flagship market but is expected to only have one or two new devices this year after taking a $7.6 billion write-down from its Nokia purchase.