Cell phone market Q1 growth fastest since 2006

By Tarmo Virki

HELSINKI (Reuters) - Handset makers sold 14 percent more phones in January-March than a year ago, growing at the fastest pace in five quarters, research firms said on Friday.

In 2006, market growth was at over 20 percent level throughout the year.

"Global handset volume continues to increase at a healthy pace. Recent annual growth rates have actually gone up, not down. Emerging markets continue to surge," said Neil Mawston, analyst at Strategy Analytics.

The world's largest phone maker Nokia (NOK1V.HE: Quote, Profile, Research, Stock Buzz), and Korean vendors Samsung Electronics (005930.KS: Quote, Profile, Research, Stock Buzz) and LG Electronics (066570.KS: Quote, Profile, Research, Stock Buzz), won further share of the market, helped by attractive designs and wide offerings.

The world's two largest vendors, Nokia and Samsung grew twice as fast as the market, research firms IDC and Strategy Analytics said.

Struggling Motorola (MOT.N: Quote, Profile, Research, Stock Buzz), Swedish-Japanese Sony Ericsson (6758.T: Quote, Profile, Research, Stock Buzz) (ERICb.ST: Quote, Profile, Research, Stock Buzz) and Apple (AAPL.O: Quote, Profile, Research, Stock Buzz), a newcomer to the industry, could not keep up with continuing fast growth on the market.

Sony Ericsson saw its profits halved in the quarter and its fourth spot in the market lost to LG, as demand slowed for its more expensive camera and music handsets.

"We see that the demand on the high end has softened," Sony Ericsson sales chief Anders Runevad told a conference call, adding that consumers were becoming more cautious.