TOKYO -- Sales of mobile telephones hit a new record of 52.3 million handsets last year in Japan as customers were pulled in by increasingly advanced features, a research firm said Tuesday.

The study by Gartner Japan also found that 105 million people were using mobile telephones in Japan as of the end of December, or more than 80 percent of the population.

Handset sales in 2007 marked a gain of 10.7 percent from the previous year. The sales broke the previous annual record of 48.7 million handsets in 2003, when customers snapped up new handsets featuring cameras.

Last year, handset sales were again boosted by new features, particularly phones equipped for digital television or serving as electronic money.

The Japanese market continued to be dominated by domestic manufacturers, which have exclusive contracts selling handsets for Japan's three main service providers -- NTT DoCoMo, KDDI and Softbank Mobile.

Sharp Corp., which has a popular model featuring television, led the market with nearly a quarter of handset sales in 2007, followed by Panasonic at 12.4 percent, Fujitsu at 11.1 percent and Toshiba at 9.9 percent.

Virtually all of the handsets sold in Japan were of third-generation, which allows a wider range of advanced features.

An industry study last week found that in January, Japanese stores for the first time took no delivery of second-generation phones, making the country the second after South Korea to go almost exclusively third-generation.