Motorola loses top spot in U.S. mobile-phone market

Motorola Inc. lost its top ranking in the U.S. mobile-phone market last quarter after Samsung Electronics Co. won over customers with devices that can surf the Web and play videos.

Motorola's share dropped to 21.1 percent from 32.7 percent a year earlier, Newton, Massachusetts-based research firm Strategy Analytics, said in an e-mail. Suwon, South Korea-based Samsung had 22.4 percent of U.S. sales, up from 17.9 percent a year earlier, giving it the top spot for the first time.

Motorola's Sanjay Jha, who joined Greg Brown as co-chief executive officer in August, is racing to hang on to customers in the U.S., the biggest mobile-phone market. He plans to entice shoppers by using Google Inc.'s Android software to build smart phones, devices with more advanced features. Samsung has made gains with those kinds of phones, such as its Instinct model.

"They obviously need more smart phones," Neil Mawston, director of Strategy Analytics, said in an interview. "They need more phones that look like the Samsung Instinct."

Motorola, based in Schaumburg, rose 5 cents to $4.57 at 10:07 a.m. in New York Stock Exchange composite trading. Before today, the shares had dropped 72 percent this year.

Overall U.S. handset shipments rose 6.2 percent to 47 million, Strategy Analytics said. The U.S. is the biggest mobile- phone market by revenue.

LG Electronics Inc., in third place with 20.5 percent of the market, also may be poised to pass Motorola, which has predicted a drop in sales this quarter.