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Mobile phone sales grew 35% in the third quarter, as iPhone and Android smartphones roared ahead and no-brand, white-box manufacturers captured market share, primarily in emerging markets, according to Gartner.

Nokia, the longtime market leader with more share than the next three challengers combined, took the biggest hit in the quarter, dropping from 36.7% to 28.2% share of market. Nokia was squeezed from the top by iPhones, Androids, and BlackBerrys, while experiencing increased competition from below by Asian white-box manufacturers.

While fiercely competitive, the market remains healthy. "This is the third consecutive double-digit increase in sales year-on-year, indicating that consumer demand is healthy," said Carolina Milanesi, research VP at the market research firm. "This quarter saw Apple and Android drive record smartphone sales. Apple's share of the smartphone market surpassed Research In Motion in North America to put it second behind Android, while Android volumes also grew rapidly making it the No. 2 operating system worldwide."

Samsung, the second largest provider, saw its market share drop from 19.6% to 17.2% in the quarter, followed by third place LG's drop from 10.3% to 6.6%. RIM managed a slight gain to 2.9%, up from 2.8%. Motorola, which practically invented the mobile phone and dominated the market in earlier years, continued its decline to 2.1% market share from 4.5%.

Gartner said it expects white-box manufacturers to propel mobile phone sales of more than 30% for the remainder of 2010.

Milanese pointed to Apple's success with its iOS expansion and the iPad for contributing heavily to the firm's sharp gains. "They (iOS and the iPad) contribute to the strength of Apple's ecosystem and the iPhone in a way that smartphone-only manufacturers cannot compete with," she said. "Apple claims it is activating around 275,000 iOS devices per day on average -- that's a compelling market for any developer. And developers' applications in turn attract users."

Milanese noted that Google's Android platform still lags far behind the multi-device presence of Apple's iOS even as it enjoys success with media tablets and media players like the Galaxy Player.

For Further Reading

Smartphone Sales To Hit $200 Billion In 2012

Mobile Phone Market Recovery Continues

Nokia, Samsung Gain Cell Phone Market Share, Putting Pressure On Motorola