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Feature Phones Dominate Mobile Market: NPD

8/19/2009 10:32:41 AM Eastern

Port Washington, N.Y. - The NPD Group reported that when it comes
to sales of mobile phones in the U.S., feature phones still rule the market.

Smartphone sales continue to increase their share of overall
handset sales. NPD's Mobile Phone Track information reveals that unit sales of
new feature phones fell 5 percentage points, to 72 percent, of new handset sales
in the second quarter, while sales of new smartphones (e.g., handsets that are
sold with their own operating systems) reached 28 percent of overall consumer
purchases - a 47 percent increase in the category's share since last year.

"Despite their ties to pricey data plans, the rich Internet
access capabilities of smartphones are attracting consumers wooed by lower
device prices," said Ross Rubin, industry analysis director for NPD.

Overall handset sales volume in the U.S. grew 14 percent year
over year in Q2 2009, as sales revenue increased 18 percent. The average
selling price of all mobile phones increased 4 percent year over year -
reaching $87 in Q2.

NPD's Q2 2009 ranking of handsets showed the LG enV2 and Samsung
Rant led feature-phone sales, while Apple iPhone 3G and RIM Blackberry Curve
were the top-selling smartphones.

Wi-Fi capability increased three-fold since last year, with 20
percent of all new handsets equipped with this capability. Touchscreens on both
feature phones and smartphones have also seen tremendous growth since last
year, with 26 percent of all new handsets purchased in Q2 including this
feature; physical QWERTY keyboards, by comparison, were available in 35 percent
of handsets sold, NPD said.

"Feature phones are taking on more of the physical
characteristics of smartphones, and often offer greater exposure to carrier
services," Rubin said. "Although their user interfaces continue to improve, the
depth of their applications generally lags behind those of smartphones. With
the price gap between smartphones and feature phones narrowing, to remain
competitive feature phones need to develop a better Web experience, drive
utility via widgets and sidestep the applications arms race."

NPD compiles and analyzes mobile device sales data based on more
than 150,000 completed online consumer research surveys each month, the company
said. Surveys are based on a nationally balanced and demographically
representative sample, and results are projected to represent the entire
population of U.S. consumers. Sales figures do not include corporate/enterprise
mobile phone sales.

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