Motorola's dominence in the mobile phone market is sliding with the Company reporting  a sharp decline in sales to 29.9 million units in the first quarter of 2008, compared with 47.6 million units in the year-ago period.

Having lost its global number two position in the handset market to Samsung, it is now under threat from LG, global technology research firm Gartner said on Wednesday.

US-based Motorola, whose market share slipped from 18.4% to 10.2% during the period, continues to struggle in finding a successor to its popular Moto Razr. Although it introduced new models, its portfolio is not competitive enough.

"Motorola is unlikely to introduce many products in the second half of 2008, a time when most competitors will bring new additions to the market, so it stands little chance of winning back its No 2 position. It may even have to watch out for a threat from current No 4 player LG," said Carolina Milanesi, research director for mobile devices at Gartner.

Both Kyocera of Japan and Indian consumer electronics major Videocon had expressed interest in buying Motorola's handset business, valued at around $3.8 billion. In March, Motorola decided to spin off the handset division amid declining revenues.

During the first quarter, Samsung sales reached 42.4 million units, with a market share of 14.4% as it widened the gap with third-placed Motorola. Samsung is reacting quickly to the focus on touch-screen devices. "Samsung's choice to be a quick follower has paid off so far, but it needs to focus on diversifying its designs and strengthening its lower-end portfolio to increase sales in emerging markets," said Ms Milanesi.