Strong demand for replacement handsets in western Europe and the US helped push global mobile phone sales to 156.4 million units in the second quarter of 2004, a 35 per cent increase from the second quarter of 2003, new research has claimed.

Analyst Gartner said that all worldwide regions experienced healthy sales of mobile phones in the second quarter of this year.

The western European market is being driven by consumers who bought their first mobile phones in 2000 and 2001, and are now upgrading to smaller colour screen phones with built-in cameras at much lower prices, according to the analyst.

"In mature markets, such as western Europe and North America, sales of replacement handsets ensured strong results, while spectacular growth in emerging markets, notably Latin America, further boosted unit sales," said Ben Wood, principal analyst for mobile terminals research at Gartner.

More than 300 million mobile phones were sold in the first half of 2004, and Gartner analysts have projected year-end sales of approximately 620 million units.

But the analyst warned that, if current momentum is maintained, worldwide sales could reach 650 million units resulting in excess inventory that could harm sales in the first half of 2005.

In the second quarter of 2004, Nokia was found to have suffered a decline in market share compared with the second quarter of last year.

However, Gartner noted that the company increased its market share from the first quarter of this year, when its share stood at 28.9 per cent.

"Nokia's price cuts gave it a small gain in market share compared to the first quarter, although the average selling price of its handsets fell in the second quarter," said Wood.

"Motorola maintained its second position based on a strong performance in the Americas, but Gartner expects Samsung to be battling with Motorola for the number two position for the remainder of the year."