By Neil Hughes

Published: 09:20 AM EST (06:20 AM PST)

Apple moved ahead of rival Motorola in unit sales in the first quarter of 2010, with the iPhone taking a 3 percent share of the total cell phone market.

Apple's 8.75 million iPhones shipped in the first three months of 2010 managed to edge Motorola, which sold 8.5 million handsets during the same period, according to new data from iSuppli. Apple during the quarter was the No. 6 overall cell phone maker in the world, while Motorola came in at 8. iSuppli called Apple's growth in the global market a "changing of the guard" in the cell phone industry.

Apple was propelled by 130.7 percent year-over-year growth, up significantly from the 3.79 million iPhones sold in the first quarter of 2009. The Cupertino, Calif., company still remains behind Research in Motion, which has 3.6 percent of the market with 10.47 million BlackBerrys sold in the first quarter of 2010.

The numbers serve to illustrate what a small portion smartphones are of the overall cell phone market. The top global brand during the quarter was Nokia, which sold a total of 107.8 million cell phones and smartphones during the quarter. Competitors Apple and RIM, however, do not sell traditional cell phones.

"Smart phones represent the hottest segment of the cell phone market, with unit shipment growth of 35.5 percent expected in 2010, compared to 11.3 percent for the overall mobile handset business,” noted Tina Teng, senior analyst, wireless communications, for iSuppli. "Because of this, companies that are exclusively focused on this area, like RIM and Apple, have managed to move up to near the top-tier of the global cell phone business. This shows that the smart phone is reshaping the competitive landscape of the wireless business."



The latest numbers also demonstrate how far Motorola has fallen: In the first quarter of 2007, the company was the second-largest cell phone shipper in the world, behind only Nokia. Recently, Motorola has shifted its focus to higher margin smartphones, like the Droid.

"While Motorola’s ranking and share declined in the first quarter, the company did manage to make significant improvement in profit during the period, with its margin rising by 19 percentage points compared to the first quarter of 2009," Teng said. "This shows that Motorola is on the right track in its product mix, focusing on more profitable devices like Droid."

The report noted that the smartphone market is expected to continue to grow, which could result in both RIM and Apple ousting some of the biggest players in the global cell phone market. Within their sights is No. 4 Sony Ericsson, which has 3.6 percent of the market, but fell 27.6 percent year-over-year in the first quarter.

"It will be interesting to see how much more market share RIM and Apple can gain in 2010," Teng said.