The worldwide smartphone market grew 38.8 percent in the third quarter of this year ended Sept. 30, while growing Chinese demand for low-cost Android smartphones hurt Apple’s (NASDAQ:AAPL) market share, according to a new report released by the International Data Corporation, or IDC.

IDC, in its quarterly assessment, said that smartphone vendors shipped a total of 258.4 million smartphones in the third quarter of 2013, establishing a new record for units shipped in a single quarter -- 9 percent more than the previous high of 237 million units shipped in the second quarter.

“The third quarter was up substantially over the previous quarter, which was also a record quarter for shipments, showing the real momentum of the smartphone market,” Ryan Reith, program director at IDC, said in a statement on Tuesday.

According to Reith, prices of smartphones have declined significantly, largely due to the proliferation of low-cost Android handsets, which has helped China become one of the fastest-growing smartphone markets in the world. China accounted for more than a third of all smartphones shipped during the last quarter.

IDC said that Android has created vast opportunities for new players to enter the smartphone segment and produce fresh competition to market leaders. For instance, the report noted, smartphone vendors that are not among the top 5 control more than 40 percent of all worldwide smartphone shipments.

“Beyond Samsung (KRX:005935) and Apple at the top of the rankings is a tight race of vendors trying to break out from the pack,” Ramon Llamas, research manager at IDC, said in a statement. “In 3Q13, Chinese vendors Huawei and Lenovo (HKG:0992) moved past LG (KRX:066570), and not far behind are two more Chinese companies, Coolpad and ZTE (SHE:000063).”

Smartphone Vendor Highlights

Samsung maintained its lead and increased its market share by 0.4 percentage points to 31.4 percent in the third quarter compared to a year ago. The company’s 40.5 percent increase in shipments was driven more by its low-end mass market smartphones, compared to flagship models such as the Galaxy S4 and Note 3.

Apple, despite selling 33.8 million iPhones in the third quarter, accounted for only 13.1 percent of the worldwide smartphone market, dropping 1.3 percentage points from 14.4 percent during the same period in 2012. According to IDC, the company’s total volumes speak to the early success of the iPhone 5s and iPhone 5c, and the softening of demand for older devices before the launch of the new models.

The other three vendors among the top five -- Huawei, Lenovo and LG -- grew at a much faster rate, compared to Samsung and Apple, although they shipped fewer units in the same period. The trio also increased their market share by about 1 percentage point each, accounting for nearly 5 percent each of the smartphone market.

Meanwhile, in the overall mobile phone market worldwide (inclusive of smartphones), vendors shipped 467.9 million units in the third quarter, compared to 442.7 million units shipped during the same period a year earlier. Third-quarter shipments were up 7 percent compared to the 437.4 million units shipped in the second quarter of this year.

“Looking ahead, we anticipate strong momentum going into the fourth quarter, and another record quarter and year in the worldwide smartphone market," Llamas said. “With already strong growth in 3Q13 and multiple vendors launching flagship models, the market will be poised to reach one billion units for the year.”