Mobile phone vendors experienced a lull in 1Q08, shipping just 291.6 million units — an 11.6 percent downturn from the 330.8 million units shipped during the busy holiday quarter (4Q07), according to IDC's Worldwide Quarterly Mobile Phone Tracker, writes MarketingCharts.

However, first-quarter numbers were 14.3 percent more than the number of units (255.0 million) shipped in the year-earlier period (1Q07).

Eroding disposable incomes from rising food and fuel prices coupled with worries about the global economy will cause consumers to adopt a cautious outlook for the months ahead, putting the mobile phone market under increased pressure to compete for wallets and attention, said Ramon T. Llamas, senior research analyst with IDC's Mobile Device Technology and Trends team.

Highly competitive pricing and innovative service plans will keep the overall market on track for the year, he noted, and emerging markets will continue to offer tremendous growth potential.

Top 5 Mobile Phone Vendors

Nokia came out on top once again, capturing 39.6 percent of the market.

• Total shipment volumes (115.5 million) were greater than those of the next three vendors' combined.
• Fully featured devices (e.g., the 5310, 5610, and 6500 series, Nseries devices) generated the most revenue and profit.
• Entry level devices (e.g., the 1100 and 1200 series) going into emerging markets kept shipment volumes high. Strong presence in emerging markets puts Nokia in a good position to capitalize on replacement handset opportunities.

Samsung (No. 2) built its largest margin yet against Motorola.

• Shipments remained even from the holiday quarter, but increased 33 percent from 1Q07.
• Double-digit profitability was achieved by cutting down on marketing expenses.
• Presence within key emerging markets balanced out against soft demand in Europe and North America.

Motorola fell 39.7 percent from Q107, with the lowest shipment levels since the second half of 2004, capturing less than 10 percent of the market - compared with last year's 17.8 percent.

• Product portfolio gaps in the areas of music, touch, and messaging caused Motorola to fall behind its competitors, as did operating loss and lower operating margin.
• Motorola plans to separate the mobile devices business unit from the company and streamline its silicon and software platforms to bring new devices to the market later this year.

LG Electronics just beat out Sony Ericsson to take the No. 4 position for the first time since the beginning of 2006.

• Flagship feature phones such as the Viewty, Voyager, and Venus, allowed LG to keep shipment volumes high at 24.4 million units - a whopping 54.4 percent increase from 1Q07.
• LG plans to ship more high-end devices and also grow its presence within emerging markets in 2008.

Sony Ericsson lost market share (7.6 percent vs. 8.5 percent last year) and grew only 2.3 percent overall in the same time period.

• Diminished demand for its mid-range and high-end devices, channel inventory buildup, component shortages, and interest in low-price handsets in Asia/Pacific - where Sony Ericsson is lacking presence - were all cited as difficult challenges to maintaining high shipment volumes.
• In 2008, they plan to focus on the North American market with the W350, W760, Z555, and Xperia and globally with several Cybershot, Walkman, and web-ready devices.

Note: Mobile phones that combine voice communications capabilities with pen or keypad handheld data features are tracked by IDC within the Converged Devices category - not the Mobile Phone category.