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America’s once-iconic wireless brand Motorola is under threat from LG Electronics for world’s number three spot. Last year, Samsung Electronics passed Motolola to become the world’s No. 2 player in the cell phone industry and this year analysts say LG will leap past Motorola in sales.

Nokia is the world leader in cell phone industry but that too is losing ground to Koreans shedding its share by nearly two thirds in the last two years. Unlike Nokia, the Koreans are very strong on Motorola’s home turf, the U.S., which accounts for 44 percent of its handset sales.

Samsung and LG together sell about the same volume in the U.S. as Motorola. And while Motorola’s presence is collapsing outside the U.S., the Korean electronics giants are gaining share in both developed countries and emerging markets, thanks to stylish phones featuring touch-screens and multimedia features.

LG, which until an year ago was seen as a second-tier vendor, has leapfrogged Sony Ericsson this year to become the world’s fourth-largest handset maker.

And apart from Motorola, Nokia which has 40.9 percent share needs to be worried because Samsung is narrowing the gap. The Koreans are even well positioned to challenge Apple and its iPhone.

According to recent Strategy Analytics study:

If 2007 was the year of the Europeans, then, due to LG and Samsung, 2008 is shaping up to be the year of the Koreans.

Industry watchers agree the Koreans were the star performers in the first three months of this year. In the first quarter, when the industry grew 14 percent from a year earlier, LG grew 54 percent, shipping 24.4 million handsets, while Samsung’s sales jumped 33 percent, to 46.3 million phones. They were the biggest beneficiary from the weakness of Motorola, whose shipments sank 40 percent, to 27.4 million.

Now both LG and Samsung are poised to capitalize on the industry wide buzz over the touch screen interface and multimedia devices created by Apple’s iPhone.

Telecom analyst Tina Teng at researcher iSuppli said

Apple’s high-priced iPhone and the company’s determination not to compromise its business style would not really help it gain share in the handset market although it will remain a “strong influence” in setting industry direction.