Correction, 2:38 p.m. PST: This story initially gave an incorrect name for the firm that released the report. It is Strategy Analytics.
Samsung Electronics became the top mobile phone provider in the U.S. during the third quarter, unseating longtime rival Motorola, according to a report Friday by Strategy Analytics.
Samsung grabbed 22.4 percent of the market share based on U.S. shipments in the quarter, compared with Motorola, which was slightly more than 1 percentage point away, and LG Electronics which was a close third.
Samsung and LG, which have been rapidly closing the gap on Motorola in the past two years, were aided by marked improvements with their U.S. wireless carrier relationships, said Bonny Joy, a senior analyst at Strategy Analytics.
Samsung, which already has a wide portfolio of products from its Instinct to its Glyde, previously had relationships with all major carriers but over the past two years has greatly improved those relationships, especially with AT&T and Verizon, the No. 1 and No. 2 players, noted Joy.
Samsung, which has been in the U.S. wireless market since 2000, has gone from having a small presence in the number of product lines that carriers would offer to gaining their trust and having a wide breadth of models at varying price points with the carriers.
"Motorola had a big advantage in the market with its extensive relationship with the carriers, but during this period, Samsung and LG have built strong relationships with all the major carriers too. The only one that LG doesn't yet have is T-Mobile," Joy said.
Just a year ago, Samsung's U.S. market share stood roughly 18 percent, compared with Motorola which was nearly double that level. LG, meanwhile, was a few percentage points off from Samsung, as the No. 3 player.
For Motorola, this latest turn of events does not bode well for the company, especially in light of its struggle to survive after living off the success of its Razr phones and amid the tightening competition from Apple's wildly popular iPhone.
During the third quarter, Apple's iPhone ranked sixth in the U.S. market, based on shipments. AT&T, the exclusive iPhone U.S. carrier, aided sales by heavily subsidizing the cost of the phone for customers, driving a spike in demand, the report noted.
Samsung Electronics reported Friday that its second-quarter profits rocketed 51 percent, due in large part to a surge in cell phone sales.
The South Korean company, which sells TVs and other consumer electronics, electronic components, and mobile handsets, reported a profit of $2.12 billion on $18 billion worth of sales.
The company said the jump in profits came as it sold 45.7 million handsets during the quarter, a 22 percent hike in sales over the previous year. For the past year, Samsung has been gobbling up market share at the expense of its American rival Motorola. Last year, the company overtook Motorola as the No. 2 handset maker in the world, behind Nokia, the worldwide leader.
But despite its strong sales in the second quarter, Samsung executives told investors and analysts that it expects the worldwide economic slowdown to affect sales in the second half of the year.
Samsung has seen great success with its smartphone the Instinct, which is sold exclusively in the U.S. for Sprint Nextel's network. Sprint reported in June that the phone had sold out in the first week it was on the market.
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