The latest figures on mobile phone shipments show that Samsung has become the world's second largest handset manufacturer after a poor showing by Motorola.

Nokia remains the world's leading handset provider, improving its market share to over 38 per cent with a series of best-selling handsets in Asia and eastern Europe.

But Samsung showed strong growth to reach 14 per cent, and hit the number two spot as Motorola's share dropped by seven per cent.

"Motorola today is a pale version of the company it was a year ago," said Carolina Milanesi, research director for mobile devices at Gartner.

"The third quarter saw Samsung gain the number two position taking advantage of Motorola's continued weak performance.

"Samsung will have to continue to closely manage its inventory in the last quarter of the year so as not to start 2008 on the wrong foot."

Sony Ericsson and LG retained fourth and fifth positions, showing minor growth in sales and revenues.

Global handset sales for the third quarter of 2007 rose 15 per cent to 289 million units. Asia showed the strongest sales growth, where India led the market, but Gartner noted that Apple's iPhone is beginning to have an effect.

"The iPhone was a major catalyst for AT&T's performance this quarter, as it drove customers into AT&T stores," said Hugues De La Vergne, principal analyst for mobile devices research at Gartner.

The iPhone sold more than one million units in its first quarter, according to Gartner analysts, who expect growth of between 10 and 15 per cent for the following year.