Sales of mobile phones rose 13.8 percent to 326 million units in the second quarter but average selling prices fell by more than expected amid intense competition, IT research firm Gartner said on Thursday.
Sales of smartphones rose by 50 percent and accounted for 19 percent of shipments as more affordable data plans encouraged more consumers to try them.
Launches of updated operating systems will help maintain strong growth in smartphones in the second half of 2010 and spur innovation, Gartner analyst Carolina Milanesi said.
Nokia's Symbian phones had 41.2 percent of the smartphone market, down from 51 percent a year ago as it struggles to revamp its portfolio, followed by Research in Motion's BlackBerrys, with 18.2 percent.
RIM lost its position as the leading smartphone platform in the United States to Google's Android, an open platform that runs phones made by a host of manufacturers including Taiwan's HTC and U.S. phone maker Motorola.
As competitors eat into RIM's North American market share, the Canadian company has increasingly been pushed to look to markets like India and Saudi Arabia for growth.
But security demands made by some foreign governments have landed RIM at the center of international controversy in recent weeks.
Android also overtook Apple to become the third most popular smartphone operating system globally. Milanesi predicted Apple's sales would regain some momentum in the second half as its new iPhone 4 goes on sale around the world.
She also predicted that Android would overtake RIM on a global level by the end of the year.
Android had 17.2 percent of the smartphone market in the second quarter, with Apple's iPhone OS taking 14.2 percent.
In the wider phone market, Nokia's market share fell to 34.2 percent from 36.8 percent, while second-placed Samsung slightly increased its market share to 20.1 percent from 19.3 percent.
Fellow South Korean phone maker LG Electronics lost market share, slipping to 9 percent from 10.7 percent of the market, despite aggressive price cuts. RIM had 3.4 percent of the total phone market, up from 2.7 percent.
Milanesi predicted stronger pressure on prices in the second half of the year.
As you get into Q4, competition will be so strong... things are really going to get intense, she said.
Gartner kept its forecasts for 2010 unchanged. It expects the overall phone market to grow by 14 percent this year, and the smartphone market to grow by 46 percent.
(Reporting by Georgina Prodhan; Editing by Hans Peters)