Sony Ericsson on the up in the downturn

Sony Ericsson has jumped two places to become the world's third largest handset vendor according to Gartner. The analyst firm warns that the Q3 move 'had more to do with the issues that Motorola and LG faced than Sony Ericsson's ability to turn around its business after a few difficult quarters.'

Sony Ericsson sold 24.8 million handsets in the third quarter, down from 25.4 million in a year ago, but enough to give it an 8.1% global market share. Motorola dropped from third spot in the second quarter 2008 to fourth spot in Q3, shipping 24.6 million units, giving it an 8% market share.

Meanwhile, LG dropped from fourth place in Q2 to fifth in Q3, shipping 24.1 million units to give it a 7.8% market share. Only 0.3% market share splits the three companies battling for third place, with Gartner warning that 'Sony Ericsson continued to suffer from the weakness in the high-end markets as well as the slowdown in replacement cycles in Europe.'

Gartner warns of tough times ahead for both Sony Ericsson's portfolio and Motorola's line-up of devices, but declares that LG's portfolio 'remains well-positioned to take advantage of the seasonality in the fourth quarter as its pricing is more suited to the current economic climate.'

Despite Nokia's recent admission it is feeling the negative economic effects of the global downturn, the Finnish vendor maintained its dominance of the handset market, shipping 118 million units to give it a 38.2% market share.

Second player Samsung had a strong third quarter as sales increased 26.3% over the same period in 2007, shipping 52.9 million units to give it a 17.1% share.

Apple ranked seventh thanks to the global success of iPhone 3G, just behind Research In Motion with its BlackBerry portfolio.

According to Gartner, worldwide sales of mobile phones reached more than 309 million units in Q3, a 6% increase on last year, although growth dipped back into single figures, representing less than half the 16% growth rate of the same period in 2007.

Gartner expects market conditions to remain challenging until at least the first half of 2009, with sales next year to show a low single digit growth contraction.