Gartner said mobile phone sales increased to 112.7 million units in the first quarter, compared with 95.3 million in the year-ago period.
Gartner analyst Bryan Prohm said the first-quarter sales figures indicate that the industry could be on track to post double-digit growth for the full year, sparked partly by people replacing their old handsets.
"Significant demand was recorded across all geographical regions during the quarter," Prohm, senior analyst with Gartner's mobile communications worldwide research group, said in a statement.
Nokia, which posted first-quarter handset sales of 39.5 million units, expanded its lead slightly to capture 35 percent of the market. In the year-ago period, the company sold 32.6 million handsets, accounting for 34.2 percent of the market.
Motorola and Samsung continued their battle for second place. Motorola's sales of 16.6 million in handsets landed it 14.7 percent of the market, down from 17.6 percent in the year-ago quarter, while Samsung closed the gap slightly, posting sales of 11.9 million handsets for 10.5 percent of the market, up from a 9.3 percent market share last year.
Those companies were followed by Siemens and Sony Ericsson Mobile Communications, with market shares of 7.6 percent and 4.8 percent, respectively.
In the report, Gartner analysts predicted that handset pricesbecause of stiff competition among the more than 100 manufacturers competing in the market. The report also said that, although low-end functional sets will account for the majority of sales in the near future, the availability of color screens and camera phones will encourage many people to upgrade.
"Photo messaging...is expected to be the cornerstone service in mobile network operators' marketing campaigns throughout the year," Ben Wood, principal analyst with the mobile communications group, said in a statement.