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Global mobile phone sales increased 6 percent in 2008 over the previous year while sales declined 4.6 percent in the fourth quarter due to the economic downturn, according to Gartner.

Worldwide mobile phone sales reached 1.22 billion in 2008, up from 1.15 billion in 2007.

"Mobile phones have traditionally been one of consumers' preferred presents for Christmas. However, in the fourth quarter of 2008 consumers were concerned about taking on the contract associated with the most attractive products on the market," said Carolina Milanesi, research director for mobile devices at Gartner, based in Egham, U.K.

"Consequently, mobile devices in both emerging and developed markets experienced the lowest quarter-on-quarter growth (2 per cent) ever recorded in a fourth quarter."

Nokia sold 472.3 million mobile phones in 2008, giving it a market share of 38.6 percent, up from 37.8 percent in the previous year.

Samsung took the second spot, selling 199.1 million mobile phones in 2008 capturing 16.3 percent of the market share up from 13.4 percent in 2007. Samsung was able to avoid a fourth quarter decline in mobile sales. "Samsung's quick response to demand for touch interfaces was the main reason for its success," said Gartner.

Motorola landed the third spot, selling 106.5 million mobiles but dropping in market share from 14.3 percent to 8.7 percent in 2008. "Lack of compelling products throughout the portfolio has made it impossible for Motorola to slow down its sales decline," Gartner said.

"Efforts to reduce inventory will intensify in the first quarter of 2009 and continue into the second quarter of 2009. In the second half of 2009, the channel will have to start re-stocking and this will help sell-in volumes," said Ms Milanesi.

"This will not mark the start of a market recovery - we do not expect demand to stabilize before 2010."