Symbian and Nokia surprised industry observers by taking the lead in European handheld sales and mobile operating system market share for the third quarter, according to the latest figures. A study from UK-based market researcher Canalys showed that Nokia shipped 152,335 of its Symbian-based 9210 Communicator smartphones during the quarter, surpassing second-runner Palm with 108,445 unit shipments. Compaq's PocketPC-based devices came in third with 66,925 sold. The new sales took Symbian's EPOC operating system into the lead with 34 percent of the handheld computer market, displacing Palm OS to second with 29.9 percent. Windows CE (the family that includes Pocket PC) held 20.8 percent of the market. EPOC is usually associated with the fortunes of its creator, Psion, which earlier this year shifted its focus away from mass-market handhelds amid slipping sales. But the figures should not really come as a surprise, according to Canalys. EPOC is well-established in Europe, far better than in markets such as the US, and Nokia's devices may appeal to Psion users looking to upgrade. Also, Nokia has huge manufacturing and distribution capabilities, and has already been using them successfully with previous smartphone products. "Nokia is able to produce devices on a vast scale and ship them through handset channels," said Canalys analyst Andy Buss. "They have access to vast numbers of shops and chains. Even a few sales through the major shops results in an immense number of devices in the hands of end users. It's quite a different business model from the handheld manufacturers." Nokia also has the early mover advantage in the smartphone market, as one of the earliest to deliver a colour-screen device integrating mobile phone and computing capabilities. "The 9110 (Communicator) was shipping about 70,000 units a quarter for the last year, and that was a monochrome device," Buss said. "The new device being colour, Symbian and offering high-speed data (HSCSD), makes it a compelling upgrade option." Canalys also sees a big potential market for smartphones like Nokia's going forward. The company projects that smartphones, defined as combined phone-computers that can accept new applications, will dominate the handheld market alongside the familiar standalone devices. Bluetooth remains an unknown for now but may also play a part, allowing standalone handhelds to communicate with mobile phones and thus making integrated devices less attractive. But Nokia, Palm and the various Microsoft licensees will face increasing competition, as network operators and others jump into the fray, and clear winners are unlikely to emerge in the near future, Canalys says. On a more sober note, the firm noted that economic uncertainties have pushed the overall handheld market for the third quarter down 16 percent compared with the same quarter last year, although the total for the first three quarters of this year is still 33 percent up on last year. See the Mobile Technology News Section for full coverage. See the Business News Section for full coverage. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Telecoms forum. Let the editors know what you think in the Mailroom. And read other letters.