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November 27, 2007

Year-Over-Year U.S. Mobile Phone Sales Revenue Increase Is 7 Percent in Third Quarter 2007, Says NPD Group

By Calvin Azuri, TMCnet Contributing Editor

The NPD Group, a leading consumer and retail information company, announced that the sale of mobile phones to consumers in the U.S. has reached 38 million in the third quarter of 2007, according to a wire report. This is an increase of approximately 16 percent from the previous quarter. However, it is observed that the second quarter is usually a slow sales quarter for mobile phone retailers.

“The mobile phone market is not only growing, it is growing smarter,” Ross Rubin (News - Alert), director of industry analysis for NPD, was quoted as saying in the report. “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 (News - Alert).”
According to NPD, the total third quarter 2007 consumer sales is $3.2 billion, which represents a 47 percent increase from the same period last year. The percentage of smartphones sold during the third quarter has increased from 4 percent of all phone sales in the Q3 2006 to 11 percent during the same period in 2007. This represents an increase of 163 percent year over year.
This is the breakdown of the top five handset manufacturers’ third quarter 2007 share of units sold:
Motorola (News - Alert)                    31%    
LG                               17%    
Samsung (News - Alert)                     16%    
Nokia (News - Alert)                          11%    
Sanyo                         4%      
NPD has arrived at these estimates after compiling and analyzing mobile device sales data based on over 150,000 completed online consumer research surveys each month. The surveys are based on a nationally balanced and demographically representative sample. The final results are projected as a representation of the entire population of U.S. consumers.
NPD had also observed that most popular handset features have become common in new phones sold. In the third quarter, 72 percent of phones were sold with Bluetooth capability. This is an increase of 44 percent since the third quarter of 2006. Additionally, 50 percent of new phones sold in Q3 2007 had music capability. This has doubled since the previous year. Of these, 11 percent were smartphones.
The kind of subscription plan used by consumers also plays an important role in the kind of phones purchased. When consumers with a prepaid plan are selecting a channel, they are most likely to opt for a mass merchandiser mainly due to convenience and low prices. On the contrary, consumers with no plans or post-paid plans select channels where they have purchased phones in the past, although convenience is also considered. The second category is also likely to be inclined to channels that have a wide selection of phones, such as a carrier store.
“Carriers continue to be the dominant distribution channel for mobile phones,” Rubin had added. “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.”
Calvin Azuri is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.
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