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Cell phone market Q1 growth fastest since 2006

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.

Softbank's new cell phone is displayed at an unveiling of its new cell phone models in Tokyo in this September 28, 2006 file photo. REUTERS/Toshiyuki Aizawa

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, and Korean vendors Samsung Electronics 005930.KS and LG Electronics 066570.KS, 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.

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Struggling Motorola MOT.N, Swedish-Japanese Sony Ericsson 6758.TERICb.ST and Apple AAPL.O, 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.

However, the 14 percent growth shows the market has been relatively little hurt by worries over global economy, so far.

“Disposable income is being eroded by rising food and fuel prices and worries about global financial markets and slow economic growth are creating a cautious outlook for the months ahead,” IDC analyst Ramon T. Llamas, said in a statement.

Editing By Ovais Subhani

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