UPDATE 2-Cellphone market seen returning to growth in Q4

By Tarmo Virki, European technology correspondent

HELSINKI, Oct 30 (Reuters) - The global cellphone market is set to grow in the holiday sales-fuelled October-to-December quarter, after four quarters of falls, analysts said on Friday.

'We forecast handset shipments to grow 3 percent annually in Q4 2009, signalling an end to the recession,' Neil Mawston, analyst with Strategy Analytics, said in a statement.

The mobile phone industry is ending its worst year ever, with top handset vendor Nokia forecasting earlier this month that 2009 market volumes would fall 7 percent from 2008, indicating a small rise in the fourth quarter.

CCS Insight analyst Geoff Blaber also said the market would grow in October-December, but cautioned against over-optimism pointing to the steep downturn at the end of last year.

'This market still has some way to go before stability is restored across the value chain,'Blaber said.

Strategy Analytics estimated 291 million phones were sold in the third quarter, down 4 percent from a year ago.

Separately, research firm IDC estimated the market dropped 6 percent year-on-year to 287 million phones in the third quarter.

'During the third quarter, we saw a number of channels promoting older devices at significantly lower prices. For many, this was enough to spur demand and push volumes higher,' said IDC analyst Ramon Llamas.



SAMSUNG, LG, APPLE WIN

The world's second and third-largest handset vendors, Samsung Electronics and LG Electronics, continued to win more share of the market, with sales rising 16 percent and 37 percent, respectively.

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Both Korean firms reached their highest-ever share of the cellphone market, with Samsung controlling 20.7 percent of the market, but still clearly behind Nokia's 37 percent.

'This was the first time a vendor other than Nokia has shipped more than one-fifth of the world's handsets since Motorola's RAZR-heyday performance of 2006,' said Strategy Analytics' Mawston.

Motorola and Sony Ericsson continued to struggle in the quarter, with both seeing sales almost halving from a year ago levels.

Sony Ericsson continued to lose market share for the seventh quarter in a row, while Motorola sold the least phones since first quarter 2001.

Apple's share of the cellphone market volumes rose to its highest-ever of 2.5 percent, Strategy Analytics said.

'Following the vendor's decision to keep the earlier 3G model on the market at a lower retail price, Apple's competitors in the smartphone market are now faced with competitive pressures on both the user-experience and the pricing fronts,' Mawston said. (Reporting by Tarmo Virki; Editing by Valerie Lee) Keywords: CELLPHONES/ Keywords: CELLPHONES/ Keywords: CELLPHONES/ ([e-mail], [phone], Reuters messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.