Worldwide sales of mobile phones will reach 1.28 billion units in 2008 - an 11 per cent increase from last year, according to Gartner. While the market is poised for double-digit growth in 2008 and 2009 (with sales increasing 10.3 per cent), the industry faces challenges.

Some regions projected to experience a decline in sales in 2008. Mobile phone sales growth will increasingly rely on emerging markets as mature regions, such as Western Europe, Japan and North America reach saturation.

In Asia/Pacific, mobile phone sales are forecast to reach 472.5 million units in 2008 - an increase of 17.9 per cent from 2007. Mobile phone sales in Western Europe are projected to reach 188 million units, a 1.5 per cent decline from last year, while in North America, mobile phone sales are expected to total 185.7 million in 2008.

New device vendors, such as Apple and Garmin, are looking to differentiate themselves, while big-name vendors, such as Motorola, face pressure as market shares decline and design innovation becomes increasingly challenging, notes Gartner.