Fuelled by strong fourth-quarter growth, worldwide mobile phone sales surpassed 674 million units in 2004, a 30 per cent increase on 2003, Gartner said today.

The analyst firm's latest report shows that global mobile phone sales grew 24 per cent in the fourth quarter compared to the same quarter in 2003.

"The market exceeded even the most optimistic forecasts in 2004. Strong replacement sales, seasonal dynamics and continued growth in emerging markets, especially Latin America, delivered the highest sales volume ever recorded," said Ben Wood, principal analyst for mobile terminals research at Gartner.

After a tough start to the year, Nokia rebounded with a fourth-quarter 2004 market share of 33 per cent.

"Nokia stabilised its market share at the end of 2004 after the challenges of the first two quarters where it dropped to 28.8 per cent," said Wood.

"Its broad portfolio of devices, combined with its profitable high volume low-tier products, will help sustain this position in 2005, but it must regain the initiative in terms of brand and technology leadership in the face of strong competition from other top five vendors."

In the fourth quarter, Motorola regained its second position ahead of Samsung with higher than expected growth.

Gartner noted that Motorola is a "revitalised brand", due largely to the positive reviews of the RAZR V3 and strong sales in Europe and North America.

Samsung increased its brand awareness in 2004, particularly in China. However, to challenge Motorola and Nokia effectively Gartner said that the firm will need to change its strategy and expand its product portfolio into the high volume, lower margin segment.

In western Europe, strong Christmas sales combined with aggressive pricing on hardware and promotional contracts/calling plans helped sustain sales momentum. Other than price, colour screens, cameras and fashion/design remain the key sales drivers in this region.

"In mature markets, it remains to be seen whether the record breaking levels of replacement sales can be sustained," said Hugues de la Vergne, principal analyst for mobile terminals research (Americas) at Gartner.