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Smartphone Sales Increased 163 Percent in US

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The NPD Group: Year-Over-Year U.S. Mobile Phone Sales Revenue Increased 47 Percent in Third Quarter 2007

According to The NPD Group, a leading consumer and retail information company, mobile phone sales to consumers in the U.S. reached 38 million units in the third quarter of 2007. This number represents an increase of nearly 16 percent compared to unit sales figures from the previous quarter; however, the second quarter is traditionally a slow sales quarter for mobile phone retailers.

NPD estimates total third quarter 2007 consumer sales of $3.2 billion, which is a 47 percent increase since the same period one year ago. The percentage of smartphones sold during the third quarter increased from 4 percent of all phone sales in the third quarter of 2006 to 11 percent during the same timeframe in 2007 – an increase of 163 percent year over year.

“The mobile phone market is not only growing, it is growing smarter,” said Ross Rubin, director of industry analysis for NPD. “The nearly threefold increase in smartphones shows that this once negligible niche is becoming a more influential force in the consumer market — attracting entrants such as Apple and the Open Handset Alliance.”

Following is the breakdown of the top five handset manufacturers’ third quarter 2007 share of units sold:

Motorola 31%
LG 17%
Samsung 16%
Nokia 11%
Sanyo 4%

Many of the most popular handset features also became more common in new phones sold. In the third quarter, 72 percent of phones were sold with Bluetooth capability, which is an increase of 44 percent since the third quarter of 2006. Fifty percent of new phones were able to play music in the third quarter of 2007 (double the prior year) and 11 percent were smartphones.

The type of subscription plan that consumers have clearly influences the types of phones they purchase. When selecting a channel, most consumers with a prepaid plan choose a mass merchandiser primarily due to convenience and low prices. By comparison, consumers with no plans or post-paid plans also find convenience important, but they select channels where they have purchased phones in the past and those that boast a wide selection of phones – which is most likely a carrier store.

“Carriers continue to be the dominant distribution channel for mobile phones,” Rubin said. “However mass merchants are bringing in new customers, such as those on pre-paid plans, and wireless specialists offer a broader range of carriers from which to choose.”

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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