Despite Recession, U.S. Smartphone Market is Growing
Mar 4, 2009
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According to The NPD Group, consumer sales of smartphones to U.S. consumers represented 23% of all handset sales in 4Q 2008 compared to just 12% in 4Q 2007. Led by the release of Apple’s iPhone 3G at US$199, the average price for a smartphone fell 23% from $216 in 4Q 2007 to $167 last year.

"AT&T and the iPhone began the trend of the signature touch-screen smartphone. The arrival of the BlackBerry Storm on Verizon Wireless, the T-Mobile G1, and imminently the Palm Pre from Sprint completes the new competitive dynamic," said Ross Rubin, director of industry analysis, The NPD Group.

NPD said that while half of smartphones on the market now sold with touch screens, 70% of all models instead offer QWERTY keyboards. T-Mobile’s Android debuted and Palm’s webOS will debut handsets that support both QWERTY and capacitive touch.

In addition, as the AT&T 3G network construction continues, and T-Mobile’s begins, high-speed data is becoming more central to smartphones. In fact, said NPD, two-thirds (66%) of smartphones now use 3G networks, compared to just 46% a year ago.

With prices continuing to fall, NPD said that manufacturers and retailers are looking for ways to bolster sales revenues. One option is to sell accessories, since they can help drive margins for smartphone retailers. More than half (52%) of smartphone buyers purchased an accessory at the time of their phone purchases, compared to just 41% among all other phone buyers.

"Palm, Apple, and HTC all over-index when it comes to accessory purchases at the time of the smartphone purchase," said Rubin. "Particularly with RIM’s large market share, resellers are apparently missing opportunities to sell more BlackBerry accessories."

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