Despite the higher costs of fuel and food, consumers still have an appetite for their gadgets, according to a Gartner report.

Sales of mobile phones worldwide jumped 12 percent to 305 million in the second quarter of 2008. Those numbers could have been better if economic conditions were better, according to the report.

“The economic environment continued to negatively impact mobile phones sales in both mature and emerging markets,” said Carolina Milanesi, research director for mobile devices at Gartner, based in Egham, UK, in the report.

The research firm forecasts sales will climb to 1.28 billion units by the end of 2008.

Gartner said Japanese cell phone makers Sharp, Panasonic, and Kyocera have historically been top five sellers worldwide but have faced market saturation there and have failed to successfully expand into other markets. That has given a rise in gains for companies such as Research In Motion, Tianyu Technology, and Gionee Communication of China, the report said.

The researcher reported that mobile phone sales totalled 9.4 million units in Japan for the quarter, a 21.1 percent drop from a year ago.

“This drop is twice as much as last quarter and it was the result of a lack of new phone features that were compelling enough to drive growth,” said Kenshi Tazaki, vice president for mobile communications research at Gartner’s Tokyo office, in the report.

Finnish phone giant Nokia kept its crown for top phone maker by units sold, increasing its chunk of the world market to 39.5 percent from 36.7 percent for the same period a year ago. The company sold 120.4 million mobile phones, continuing its dominance in low-end phones. But that mix could change. Gartner forecasts Nokia will make market share gains for the second half of 2008 on sales of touch-screen phones among others. That has been the domain of Apple’s iPhone, which has rewritten the game for smart phones but is so far nowhere to be seen in Gartner’s worldwide rankings.

Worldwide Mobile Sales in 2Q08 (Thousands of Units)

Source: Gartner (August 2008)

South Korea’s Samsung picked up 15.2 percent of the market compared with 13.3 percent a year ago, selling 45.7 million units.

Motorola was the quarter’s big loser. The Schaumburg, Illinois, company sold 30.4 million units in the second quarter of 2008 compared with 39.5 million units for the same period last year. The mobile phone maker’s share of the market fell to 10 percent from 14.5 percent a year ago.

“Motorola’s portfolio remained uncompetitive because of its lack of 3G and ‘hot’ applications such as GPS and good-quality Internet browsing,” the Gartner report said.

The analyst firm is unconvinced that the troubled phone maker will be able to boost sales on the release of such phones as its Ming amid the interest in touch-screen phones driven by Apple. The U.S. phone maker may be forced to slash prices because of a lack of compelling features.

In midday trading, Motorola shares were little changed, gaining $0.02, or .22 percent, at $9.58. Nokia dipped $0.04, or .15 percent, at $26. Apple shares gained $1.96, or 1.13 percent, to $175.60.

LG’s market share tacked on 2 percentage points in the quarter. The South Korean phone maker grabbed sales of 26.7 million units compared with 18.5 million a year ago.

Sony Ericsson, a joint venture between Japan’s Sony and Swedish company Ericsson, lost 1.2 percentage points in the quarter on sales of 22.9 million compared with 24.3 million a year ago.

The strongest growth was seen in the Asia-Pacific region, where 115 million handsets were sold, driving a 20.5 percent increase from last year. The second-largest regional gains came from Latin America. Mobile phone sales increased to more than 38.5 million units, or nearly 19 percent. Sales in Eastern Europe, the Middle East, and Africa also came in strong, hitting 56 million units, or an 18 percent increase.

North American phone sales did 44.1 million units, a 6.6 percent increase for the quarter.

Western Europe joined Japan in quarter-on-quarter declines, logging sales of 42 million phones, or a drop of 8.2 percent from a year ago. The penetration rate there reached 121.5 percent, Gartner said.