The NPD Group: Despite Recession, U.S. Smartphone Market is Growing

PORT WASHINGTON, N.Y.--(BUSINESS WIRE)--According to The NPD Group, a leader in wireless industry market research, consumer sales of smartphones to U.S. consumers represented 23 percent of all handset sales in the fourth quarter (Q4) 2008 compared to just 12 percent in Q4 2007. Led by the release of Apple’s iPhone 3G at $199, the average price for a smartphone fell 23 percent from $216 in Q4 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”

“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.

While half of smartphones on the market now sold with touch screens, 70 percent 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.

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

With prices continuing to fall, 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. In fact, more than half (52 percent) of smartphone buyers purchased an accessory at the time of their phone purchases, compared to just 41 percent 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.”

Methodology: The NPD Group compiles and analyzes mobile device sales data based on more than 150,000 completed online consumer research surveys each month. Surveys are based on a nationally balanced and demographically-representative sample, and results are projected to represent the entire population of U.S. consumers. Note: Sales figures do not include corporate/enterprise mobile phone sales.

About The NPD Group, Inc.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit http://www.npd.com.