With handset makers and carriers gearing up for an anticipated healthy fourth quarter in sales, a new problem is looming: price cutting may accompany the return to growth.

Neil Mawston, an analyst with Strategy Analytics, is predicting the industry will return to a growth period in the fourth quarter of 2009 after a year of declining sales. But he and others fear there could be some price cutting along with the recovery.

Another market research firm, ABI Research, is also predicting an improvement in fourth quarter sales with Symbian-OS-based phones, as usual, poised to lead the pack. "The dark horse in all this is Android," said Kevin Burden, ABI practice director, noting that Motorola's Droid smartphone is just one of many Android phones waiting in the wings to be marketed.

While the Droid received a favorable first impression, the question now is whether it will steal any thunder from Apple's iPhone, which has dominated smartphone headlines for months. The Droid, based on Google's Android OS, is being offered by Verizon Wireless.

The Droid also got a boost when Google released a free GPS navigation system for its Android phones. The applications will enable Android subscribers to use Google Maps' turn-by-turn navigation feature.

ABI said third quarter mobile handsets dropped 6.5% to 291.1 million versus the year-earlier quarter. As a measure of the popularity of GPS, ABI said all handsets shipped this year will have onboard GPS. Some GPS navigation applications required payment by users. ABI also noted that Nokia, the traditional handset market leader, has seen its market share slip to 37.3% in the third quarter while Samsung has gained with a 20.7% share of market.

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