A new report claims that tier one handset vendors reported between 15 percent and 22 percent year-over-year increase in shipments in the second quarter.

Market researcher ABI Research estimates that 301 million units were shipped during the sector quarter. ABI forecasts that the mobile device market will deliver 13 percent growth to take 2008 annual shipments to 1.3 billion units.

"We expected this quarter to be weak," said Kevin Burden, director of mobile devices at ABI, Oyster Bay, NY. "But it was surprisingly a strong quarter.

"Motorola certainly shocked us with its financial results," he said. "I don't think there is anyone that believed it would be at the level it is.

"This quarter's growth is evidence that this market will continue to grow, even in spite of the economic downturn."

In terms of market share, Nokia has passed the 40 percent threshold for the first time.

Samsung secured second place with 15.2 percent.

Motorola managed to keep ahead of LG with its 9.3 percent versus LG's 9.2 percent.

Sony Ericsson did the worst, with 8.3 percent.

There is a possibility that LG may overtake Motorola by the end of this quarter, putting Motorola into fourth place, ABI said.

Apple's iPhone has rewritten the rulebook, though. The iPhone is sought after for its user interface and Web browsing experience.

Regardless, Nokia's overall market share is likely to hold, as it refreshed its portfolio in the mid-tier and high-end categories and has pretty much cornered the ultra-low cost handset market.

Even carriers did well this quarter.

In fact, Verizon Wireless' second quarter financial results place it at the top of the domestic carrier charts, beating long-time rival AT&T in terms of churn, turnover and customer additions (see story).

Verizon reported 1.5 million net customer additions, a record low 1.12 percent churn rate and total revenues of $12.1 billion, an increase of almost 12 percent over last year's second-quarter numbers. The carrier says that its wireless operating income margin was 28.6 percent, its highest ever.

AT&T Wireless reported a 15.8 percent overall increase of revenue for the second quarter. Sales grew to $12 billion and wireless service revenues grew 14.8 percent to $11 billion, excluding handset and accessory sales (see story).

"I think these findings mean we are still in market where people buy latest and greatest phones," Mr. Burden said. "As wireless subscribers begin to adopt phones with more capabilities, mobile marketing will surely take off.

"But already we see evidence that there is a large audience that can be targeted via mobile," he said.