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U.S. Mobile Phone Unit-Sales Declined 22% Year-over-Year in Q1 2008

First quarter 2008 U.S. revenues from handset sales reached $2.7 billion — down 7 percent from the previous year

According to The NPD Group, the leader in market research for the wireless industry, mobile phone handset sales to consumers in the U.S. reached nearly 31 million units in the first quarter of 2008, which is a 22 percent decline since the same period a year ago. NPD estimates total first quarter 2008 consumer sales of nearly $2.7 billion, down from $2.9 billion a year ago.

“For the first time since NPD has tracked handset sales, we’ve noted a decline in sales during the first quarter after the holidays,” said Ross Rubin, director of industry analysis for NPD. “Cellular phone service has become a practical necessity in modern life; however, with looming economic concerns on the horizon, many consumers may be holding back on new handset purchases.”

Among handset manufacturers, Motorola maintained its lead in the U.S. market during the first quarter; however, its share of unit-sales declined from 35 percent in Q1 2007 to 27 percent this year. In addition, RIM Blackberry improved its ranking, edging out Sanyo as the fifth largest mobile phone manufacturer based on the number of handsets sold in the U.S. in Q1 2008.

Following is the breakdown of the top five manufacturers’ share of units sold in Q1 2008:

Motorola 27%
Samsung 18%
LG 17%
Nokia 8%
RIM Blackberry 5%

Phones sold in Q1 2008 tended to be more feature-rich than those sold the year prior. Smartphone sales comprised 17 percent of all mobile phone sales in Q1 2008, an increase of 10 percentage points since the same period a year ago. Also this quarter 79 percent of phones purchased had Bluetooth technology (up from just 65 percent from quarter year ago), and 60 percent of phones purchased in Q1 2008 were music enabled (versus 41 percent the prior year ago quarter).

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Carrier stores continue to dominate handset sales, maintaining their collective share of 63 percent of unit sales in Q1 2008, compared to just 9 percent for mass merchandisers and 6 percent for electronic specialty stores. Among specific carriers, AT&T maintained a slight lead in the number of unit sales, marking a 27 percent share, versus 26 percent for Verizon Wireless and 12 percent for T-Mobile.

Methodology:
NPD 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. Results are projected to represent the entire population of U.S. consumers.

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.

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