Smartphones Gain Market Share in 2008

Sales ChartDespite the global economic slowdown, smartphones sales grew and gained market share in the United States throughout 2008. According to The NPD Group, consumer sales of smartphones to U.S. consumers represented 23% of all handset sales in the fourth quarter compared to just 12% 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," 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."

Source: NPD Press Release

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