Motorola has performed strongly in Central and Latin America

All regions saw stronger demand, with total handset sales reaching 156 million, Gartner said.

Replacement handsets fuelled sales in the United States and Europe, where the mobile phone market is maturing.

Meanwhile Nokia, the leading handset maker, continued to lose market share to arch-rivals Motorola and Samsung.

Nokia's market share rose in the second quarter compared with the first three months of the year, helped by a price-cutting strategy.

Emerging markets

But its share of the global market was still down compared with the second quarter of 2003.

Motorola expanded in the Americas, but lost some market share in China, Gartner said.

The report also highlighted spectacular growth in emerging markets.

Latin America, notably Brazil and Mexico, led the sales increase, while demand in Argentina showed signs of recovery following its economic meltdown in 2001.

Worldwide Sales 2nd quarter 2004 (est) Nokia-46.3m (29.7%) Motorola-24.6m (15.8%) Samsung-18.9m (12.1%) Siemens-10.8m (6.9%) Sony Ericsson-10.3m (6.6%) source: Gartner

In the US, replacement sales were high as new generation handsets, often subsidised by mobile phone companies, attracted customers willing to upgrade.

Phones incorporating new features such as cameras are proving particularly popular.

Price pressure

The evidence supports recent forecasts that the popularity of mobiles packed with extra features is set to explode as they get better and cheaper.

So far these devices have been slow to get off the ground, as they have been relatively expensive and have limited battery life.

In the Asia Pacific region, the mobile market cooled slightly partly because seasonal factors.

In China, the government's efforts to slow the economy has also tempered the consumers' appetite for consumer electronics.