Consumer Handset Purchases Fall, NPD Says

By Joseph Palenchar On Dec 15 2008 - 8:00am

Cellphone purchases by consumers dropped 17.3 percent to 91 million units during the first three quarters of the year, but dollar volume declined by only 5.9 percent to $8 billion because a growing percentage of phones were sold with such step-up features as QWERTY keyboards and smartphone operating systems, The NPD Group found.

The sales estimates, which do not include purchases by enterprises for their employees, are based on online consumer surveys completed every month by 150,000 consumers. Results are projected to the entire population of U.S. consumers.

This year's drop follows a substantial gain during 2007's first three quarters, when unit volume grew 5.8 percent to 110 million and dollar sales grew 28.8 percent to $8.5 billion. Despite this year's decline, dollar volume remained well ahead of dollar sales in 2006's first three quarters, when sales reached $6.6 billion. This year's unit volume, on the other hand, is down substantially from the same period in 2006, when 104 million phones were sold.

Sales of smartphones and QWERTY phones were up substantially in the third quarter, NPD found. In fact, smartphones doubled their share of unit sales, and QWERTY phones almost tripled their share. About 22 percent of phones sold during the third quarter of 2008 were smartphones, up from 11 percent during the year-ago period and 4 percent during 2006's first three quarters. The share of QWERTY-equipped phones rose to 30 percent from the year-ago 11 percent and from 4 percent during 2006's third quarter.

Phones equipped with Bluetooth, memory card slots, and music-playback also gained share in the third quarter. The percentage of phones sold with music playback rose to 68 percent from the year-ago 49 percent and from 25 percent in 2006's third quarter. Phones equipped with memory card slots accounted for 62 percent of phones sold during 2008's third quarter, up from the year-ago 46 percent and from 14 percent in 2006's third quarter. Bluetooth was in 84 percent of phones sold in the third quarter of 2008, up from the year-ago 73 percent and from 50 percent in 2006's third quarter.