Domestic mobile phone sales in 2002 dropped 3 percent from the previous year to 39.39 million units for the second straight year of decline, Gartner Japan Ltd. said Monday.

Handset sales recorded a slight dip as brisk replacement demand for camera-equipped models nearly offset a sharp fall in new mobile phone subscriptions, according to the information technology business research firm.

The number of new mobile phone contracts signed in 2002 plummeted to 6.41 million, having stood near the 10 million mark in each of the previous six years.

NEC Corp. retained its position as the top mobile phone vendor, although its unit sales slipped to 7.82 million from the 11.5 million logged in 2001. The firm's market share shrank to 19.8 percent from 28.3 percent.

Second-ranked Panasonic Mobile Communications Co., a unit of the Matsushita Electric Industrial Co. group, generated sales of 6.46 million units, down from 7.29 million. Its market share dropped to 16.4 percent from 17.9 percent.

Sharp Corp. climbed to third from fifth, generating sales of 5.29 million units and lifting its market share to 13.4 percent from 7.4 percent.

The market share of fourth-placed Toshiba Corp. jumped to 7.8 percent from 4.4 percent on sales of 3.07 million phones.

Gartner attributed Sharp's upturn to its early entry into the camera-equipped mobile phone sector. It cited NEC as the laggard among the industry leaders.

In the October-December term, overall handset sales jumped 34 percent from the same period in 2001 to 10.7 million units, marking the first such rise in eight quarters.

During the quarter, 57.3 percent of cell phones sold were equipped with cameras, Gartner said.