Apple overtook LG Electronics in the 4th quarter of 2011 to become the world’s third largest mobile handset, according to research firm IDC. In a report released Thursday, IDC said that Apple grew its December quarter shipments 128% year-over-year, while LG’s shipments declined by more than 42%, allowing Apple to slip past the Korean consumer electronics firm.

Chart by The Mac Observer from IDC data

“Apple jumped into the third spot globally from the fifth spot last quarter thanks to a record-breaking quarter of shipments,” the firm said in its report. “That represents the Cupertino-based company’s highest-ever ranking on IDC’s Top 5 global mobile phone leaderboard. The launch of Apple’s iPhone 4S smartphone, which is now available in over 90 countries (as of mid-January), was the primary reason the company leapt over LG and ZTE in 4Q11. Device sales in the U.S. and Japan were particularly strong given extra sales days in the quarter and carrier distribution.”

IDC’s report was for mobile handsets as a whole, and the firm didn’t break out smartphone sales as a separate line item. Apple makes only a smartphone, the iPhone, but sales of 37 million of the devices were enough to claim 8.7 percent of all mobile handset sales during the quarter. When the late Steve Jobs announced the original iPhone in January of 2007, he said his company’s goal was to own just one percent of the handset market, a goal surpassed long ago.

Nokia was #1 in the world, with 113.5 million handsets, an 8.2 percent year-over-year decline and 26.6 percent market share. Samsung sold 97.6 million handsets, up 20 percent year-over-year, for 22.8 percent of the market. LG sold just 17.7 million handsets, a 42.4 percent decline, for 4.1 percent market share. All three of these other companies make both smartphones and feature phones.

Calendar 2011

Apple was also the third largest handset maker for the full year. IDC said that Apple’s 93.2 million handsets (the firm uses its own methodology to report vendor sales) was enough to claim six percent of the market, just ahead of LG’s 5.7 percent. Nokia remained in the top spot with 27 percent of the market, while Samsung was the second largest handset maker with 21.3 percent share.

Top Five Mobile Phone Vendors, Shipments, and Market Share Calendar Year 2011 (Units in Millions)

Source: IDC

The company said that total handset sales grew by 11.1 percent in 2011, slower than the 18.7 percent growth reported for 2010. IDC believes the industry will continue to see double digit growth during the next several years, and that smartphones will continue to capture more of the market.