The global handset market should return to positive growth in the fourth quarter after several quarters of declining shipments, research firm Strategy Analytics said Friday.

In its latest report on the handset market, Strategy Analytics forecast that global shipments in the final quarter of 2009 will rise 3% from the previous year to reach 300 million units.

"We believe this will be the first time the industry has returned to positive growth since Q3 2008, signalling an end to the handset recession after four quarters of decline," it said.

In the third quarter 2009, global shipments of mobile phones fell 4% from a year earlier to 291 million units, Strategy Analytics said, also a significant improvement compared with an average decline of 11% for the last three quarters.

"Once again, the rate of decline slowed in comparison with the previous quarter, bolstering our belief that the industry is edging towards recovery," it said.

After several years of healthy growth, since late 2008 mobile phone manufacturers have struggled with falling sales as consumers cut spending due to the recession.

The expected return to cellphone sales growth in the fourth quarter comes after recent results from companies in the technology sector lend weight to the view that an upswing is now underway.

Samsung Electronics Co. (005930.SE), a major maker of memory chips and the world's second largest handset maker behind Nokia Corp. (NOK), and Toshiba Corp. (6502.TO) Friday posted significantly improved quarterly results for the three months ended Sept. 30 in a reflection that the two Asian technology firms are benefiting from a sharp rebound in memory-chip prices.

Last week, STMicroelectronics NV (STM), Europe's largest chipmaker by sales, posted forecast-beating revenue and upgraded its outlook and earlier this month, Intel Corp. (INTC), the world's biggest semiconductor maker, also said demand was rising after a year of decline.

Still, Strategy Analytics said Friday the development on regional mobile phone markets remains mixed with Asia stabilizing and some pockets of weakness in South America and Eastern Europe.

The expected upturn in the overall market comes both because supply is ramping up amid healthy competition in several markets and because consumer confidence is improving, Strategy Analytics director Neil Mawston told Dow Jones Newswires, adding that he expects markets to also gradually recover in 2010.

In the third quarter, Nokia maintained its market-leading position even as its market share fell to 37%, its lowest level since the first quarter 2007, Strategy Analytics said. The company's smartphone shipments stagnated in the quarter, with the U.S. remaining a particular weak spot for the Finnish company.

Samsung's market share increased to an all-time high of 21%, helped by the company's attractive portfolio of touch-screen phones and expanding regional retail presence.

Samsung's Korean rival LG Electronics Inc.'s (066570.SE) market share was flat compared with the previous quarter, at 11%, as strong Western European shipments of touch-screen and full-keyboard devices helped to offset weakness in North America.

Sony Ericsson, a joint venture between Sweden's L.M. Ericsson Telephone Co (ERIC) and Japan's Sony Corp. (SNE), was also unchanged with 5% of the market.

U.S-based Motorola Inc.'s (MOT) market share remained around 5%, slightly below Sony Ericsson's, Strategy Analytics said, adding that the company's financial prospects may improve thanks to a strengthened high-end portfolio.

Apple Inc. (AAPL), meanwhile, reached a record 2.5% market share helped by strong shipments of its iPhone. Apple earlier this month reported a 47% jump in quarterly profits led by better-than-expected sales of iPhones, Macintosh computers and iPods.

 
    Vendor       3Q09 Mkt Shr    2Q09 Mkt Shr   3Q08 Mkt Shr 
    Nokia        37.3%           37.8%          38.8% 
    Samsung      20.7%           19.2%          17.1% 
    LG           10.9%           10.9%          7.6% 
    SonyEricsson 4.9%            5.1%           8.5% 
    Motorola     4.7%            5.4%           8.4% 
    Others       21.5%           21.6%          19.8% 
 
    (All data from Strategy Analytics, October 2009.)

-By Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3099; gustav.sandstrom@dowjones.com