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Phone fashion helps Nokia stay on top

Finnish giant Nokia has a market share that is nearly double that of its nearest competitor in Europe and Asia, according to Gartner

In an industry of over-achievers, Nokia continues to over-achieve more than anyone else, according to the latest survey of mobile handset makers from analyst Gartner.

The big six vendors all grew last year with Nokia the biggest winner of all. Sales of handsets grew by 21 percent in 2005, and totalled 816 million units. While its top six competitors saw modest double digit growth the Finnish giant grew by 35 percent, and sold 266 million units in 2005.

The industry experienced record sales due to continued strong growth in emerging markets, where falling prices for mobile connectivity resulted in higher-than-expected sales. In more mature markets, such as Western Europe and North America, replacement sales were driven by users that "gave in to the charm of highly fashionable devices", according to Gartner.

The top six vendors accounted for 79 percent of worldwide mobile phone sales in 2005 and all experienced a steady increase in market share throughout the year which went from 78 percent in the first quarter to 84 percent in the fourth quarter of 2005.

After Nokia's prodigious share of 32.5 percent of the market comes Motorola with 17.7 percent of the marker — up from 15.4 percent in 2004, then Samsung with 12.7 percent which was up by only a very modest 0.1 of a percent from the previous year. Outside the leading top three, growth was more modestly in single digits with LG up to 6.7 percent — compared to 6.3 percent the previous year, Sony Ericsson up to 6.3 percent — with modest growth of share from 6.2 percent the previous year.

"As competition continues to drive price pressure in the low-end, and a design and technology 'arms race' in the high-end, the survival of the fittest depends more and more on economies of scales, or very carefully cut-out niche markets," said Carolina Milanesi, principal analyst for mobile terminals research at Gartner.

Growth continued through the fourth quarter of 2005, the analysts said, with the mobile phone market remained strong and sales exceeding 235 million units. It was again the biggest quarter on record "since Gartner started tracking the market on a quarterly basis in 2001".