Finnish mobile phone maker Nokia has slipped from third to seventh place in the third quarter of 2012, for the sale of smartphone devices.

Nokia accounted for 7.2 million, or 4.3%, of the 169.2 million smartphones sold world-wide in the latest quarter according to research firm Gartner.

However, in the overall category for mobile phone sales, which includes devices not hooked up to the internet, Nokia remained the second biggest seller in the world, behind Samsung but in front of Apple.

Gartner says smartphones continued to fuel sales of mobile phones worldwide with sales rising to 169.2 million units in the third quarter of 2012. This is largely a market dominated by Apple and Samsung.

"Both vendors together controlled 46.5 percent of smartphone market leaving a handful of vendors fighting over a distant third spot," said Anshul Gupta, principal research analyst at Gartner.

Nokia's presence is largely in the "feature phone" market which continued to decline. Those phones saw shipments falling by 20% year-on-year to 258m, the fifth straight quarter of increasingly rapid contraction.

The sale of phones without 3G capability peaked in the fourth quarter of 2010 - the same period in which smartphones outsold PCs for the first time. This trend is largely fuelled by replacement handsets bought in China.

"After two consecutive quarter of decline in mobile phone sales, demand has improved in both mature and emerging markets as sales increased sequentially," said Anshul Gupta, principal research analyst at Gartner. "In China, sales of mobile phones grew driven by sales of smartphones, while demand of feature phones remained weak. In mature markets, we finally saw replacement sales pick up with the launch of new devices in the quarter."

Nokia, which was once the world's biggest seller of mobile phones has struggled to adapt to a sector dominated by smartphones. However, it recently announced the launch of several Windows Phone 8 devices which were not taken into consideration by Gartner's research.

The Nokia Lumia 920 was released last week and is designed as an Android and iPhone beater, with a 4.5-inch display and a 1.5GHZ dual-core processor. It's Lumia 820, which has a slightly smaller screen at 4.3-inches is also due to be released this month.

"Nokia had a particularly bad quarter with smartphone sales," said Garner. "The arrival of the new Lumia devices on Windows 8 should help to halt the decline in share in the fourth quarter of 2012, although it won't be until 2013 to see a significant improvement in Nokia's position."