LONDON - Nokia was back with a vengeance in the battle between handset makers over Christmas, Carphone Warehouse, Europe's biggest mobile phone retailer, said on Tuesday.

Nokia did particularly well with the Illuvial product ... It drove some really significant market share, Carphone finance chief Roger Taylor told Reuters after the retail-to-telecoms group beat third-quarter revenue forecasts.

Taylor said it was a strong Christmas for smartphones like Apple Inc's iPhone compared with cheaper SIM-only deals, which surged in popularity at the start of the recession.

There's no doubt that iPhone has set the bar and everyone is going hell for leather to jump over it, he said, adding that LG's BL40 Chocolate phone and Research in Motion's Blackberry phones had also sold well.

The good news is no one can stand still, not even Apple,

Taylor said there was little sign of a let up in demand for high technology phones.

It's quite an exciting pipeline for the year ahead, he said, adding this was good news for Carphone because it makes higher revenues and profits on handset deals.

Taylor said smartphones were in demand for both pre-pay and post-deals, and that Carphone captured around a third of the pre-pay market over Christmas.

He was cautious about the coming year, with taxes set to rise and unemployment remain high, but was confident Carphone would benefit from the rollout of more stores in the United States, hi-tech Wireless World shops in Europe and the launch of megastores in Britain in the spring.
(Editing by Kate Holton)

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