More operational realignment is expected into the first half of 2009 before results are seen in the second half of the year.

Motorola took another step to reversing its fortunes, hiring Qualcomm's Sanjay Jha to lead its mobile devices division this summer. Since then, Jha has sought to rationalise its supply chain, platforms, and research and development in order to restore the company's luster.

More challenges remain as Motorola's volumes were still a fraction of what they used to be and the division posted another quarter of operating loss. But the company introduced several key devices before the holiday quarter, including the Krave ZN3, several ROKR devices, Rapture VU30, and the luxurious AURA which address consumer demand for touchscreen and multimedia handsets.

LG Electronics slipped into the number five spot during the quarter, citing unit shipment declines in key emerging markets as well as economic challenges in Europe. Even so, LG has been meeting consumer demand and taste for messaging, touchscreen, and music devices, which have driven strong revenue growth from the same quarter a year ago as well as double digit operating margin. Key devices for LG during the quarter included the Secret and Viewty, while new devices like the Decoy and Dare continued to gain momentum.

Top Five Mobile Phone Vendors, Shipments, and Market Share, Q3 2008 (Units in Millions)

Source: IDC Worldwide Quarterly Mobile Phone Tracker, October 30, 2008

Note: Vendor shipments are branded shipments and exclude OEM sales for all vendors.