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Samsung Passes Motorola in US

The U.S. economic meltdown still hasn't been able to stop the sale of mobile phones, according to a report Friday from Strategy Analytics Inc. , which said handset shipments grew 6% to reach 47 million units during the third quarter.

For the first time, Samsung Corp. led the U.S. shipments hit parade with a 22.4% share of the cell phone market. LG Electronics Inc. (London: LGLD; Korea: 6657.KS) finished in third place with a 20.5% share of the market.

However, the report contained bad news for Motorola Inc. (NYSE: MOT), whose mobile phone market share fell off a cliff, dropping from more than 30% in the third quarter last year to 21.1% in the third quarter this year. The near future bodes ill for Motorola, because its longtime best selling Razr phone is finally running out of selling steam. The Razr was developed more than five years ago when Christopher Galvin was still CEO of Motorola. Former Qualcomm executive Sanjay Jha currently serves as co-CEO in charge of Motorola's mobile devices unit in a move to beef up its sagging handset sales.

Strategy Analytics said that BlackBerry used its smartphones to capture 10.2% of U.S. mobile phone sales, putting it in the fourth-place spot. The market research firm said Apple Inc. (Nasdaq: AAPL)'s iPhone finished in the sixth-place position with 5.7% share of the market, but noted that AT&T Inc. (NYSE: T) helped drive iPhone sales by heavily subsidizing the device. Nokia Corp. (NYSE: NOK) finished in fifth place with 8.4% of the market.

Strategy Analytics said Samsung's balanced portfolio of phones for each of the largest four service providers enabled it to surge ahead in the marketplace.

"Despite the financial crisis," said Neil Mawston, director of the market research firm, "mobile phone shipments in the United States reached 47.4 million units during Q3 2008, up 6.2% from 44.6 billion in Q3 2007. Attractive bundling schemes from operators, healthy subsidies, and aggressive pre-stocking by distributors ahead of the holiday season helped to lift volumes."

— W. David Gardner, InformationWeek

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