-phone market grew 2.4 percent year-over-year in the third quarter, according to IDC's latest report, with handset makers shipping 444.5 million mobile phones in the period. Samsung is leading the charge, with Apple in second -- and Nokia has dropped off the top-five list.
This was the first time Nokia slipped out of the top-five list since it debuted in 2004. To put Nokia's woes into perspective, Research In Motion, the maker of BlackBerry smartphones, replaced Nokia as a top-five vendor. HTC and ZTE rounded out the list.
"Nokia's share losses have meant gains for competitors," said Kevin Restivo, senior research analyst with IDC's Worldwide Quarterly Mobile Phone Tracker. "The company's transition away from Symbian-powered smartphones to ones shipped with Windows Phone has left ample opportunity for rivals to steal share away from Nokia over the past 18 months. However, the smartphone market is still relatively nascent, which means there's room for multiple vendors and operating systems to flourish, including Nokia."
Can Windows Phone 8 Help Revive Nokia?
Avi Greengart, an analyst at Current Analysis, said if Windows 8 -- and the user interface and services is tying its products together with -- intrigues consumers, it could have a beneficial effect on Windows Phone 8. That could trickle down to Nokia, which is betting heavily on the platform.
"Although Windows Phone has not been successful thus far, there is still hope that things might change with the focus on the new OS. Nokia certainly needs that to happen," Greengart told us.
"Regardless of how successful Windows 8 is or is not relative to expectations or relative to Apple, Microsoft still has enormous resources and is a successful company and can support investment in Windows Phone until the sun goes down. Microsoft basically has because Microsoft is a computing software company and computing is going mobile."
What About Motorola?
Ramon Llamas, research manager with IDC's Mobile Phone team, rightly noted that Nokia is not the only smartphone vendor in transition. RIM, although still a market leader, expects to start shipping its first BB10 devices in 2013. RIM relied on its older product portfolio and models to achieve its status as a top-five smartphone seller.
"Motorola, once the No. 3 smartphone vendor worldwide, is redirecting itself under its parent company Google. These are just two vendors among many that feel the competitive pressure of Samsung and Apple, but are striving to create multiple points of differentiation to assert upward pressure."
IDC expects long-term mobile phone and smartphone shipment demand to grow due to the central role mobile phones play in people's lives. Llamas said communication is at the heart of mobility.
"Mobile phones and smartphones play a critical role in keeping people connected, regardless of location," he said. "In addition, their utility beyond communication -- productivity, entertainment, and multimedia -- continues to add to their value."