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NPD: Cellphone Prices Up, Sales Down

6/23/2008 03:30:00 PM Eastern

Port Washington, N.Y. – Retail-level cellphone sales dropped 22 percent in units during the first four months of the year to 39.3 million, but because the average selling price rose to $87 from $74, dollar volume slipped by only 8.7 percent to $3.41 billion, The NPD Group concluded based on a survey of more than 150,000 online consumers.

A second survey concluded that retailers missing out on handset sales might be able to make up for lost revenue by more aggressively concentrating on accessory sales, which many consumers are passing by at the time of their cellphone purchase.

 

Mobile Phone Retail-Level Sales    Jan.-April 2007       Jan.-April 2008


U.S. Handset Revenue

$3,734,589,000

$3,408,778,000

U.S. Handset Unit Volume

50,317,070

39,284,000

 

Average Retail Price                  Jan.-April 2007    Jan.-April 2008


Mobile Phone Average Price

$74

$87

Music-Enabled Phones

$105

$117

Bluetooth-Enabled Phone

$91

$104

Source: The NPD Group,
Port Washington
,
N.Y.

 

"With [wireless] saturation increasing and the pace of new phone adoption slowing, there's still room to increase revenues from the sale of mobile phone accessories like Bluetooth headsets, memory cards, and car kits," said Ross Rubin, NPD’s director of industry analysis.

Half of accessories buyers are not buying all of their accessories at the time of their phone purchase, NPD said. On top of that, 39 percent of mobile phone owners have not purchased any accessories at all for their mobile phones.

Although 60 percent of the phones purchased by U.S. consumers in the January-April period could play music, only 2 percent of phone owners in a June survey had purchased music kits or received them as a free promotion, and only 3 percent of phone owners had purchased stereo headsets, NPD found. Likewise, only 18 percent of phone owners have purchased Bluetooth headsets or received them as promotions, according to the June survey, even though almost 80 percent of handsets sold in the January-April period were Bluetooth-enabled, NPD said.

NPD pointed a finger at carrier-owned stores for missing out on the accessories opportunities, given that 60 percent of phones purchased at retail are sold through carrier-owned stores. "Handset average selling prices continue to rise, showing that consumers are investing in greater functionality and personalization of their mobile experience," Rubin said. "Whether consumers are in the [carrier] store to buy a handset, receive technical assistance, or even pay a bill, carrier stores need to focus their energy and consumers' attention on the latest and greatest phone accessories or risk losing the sale to a competing retailer." Almost half of mobile phone owners are likely to look to those competing retail outlet, including mass merchants and electronics stores, when purchasing accessories for their phones, he added.

When asked why they bought accessories at the store where they bought their phone, 38 percent of respondents said the store offered accessories that worked with their new phone, 30 percent said the store carried the brands that matched their phone, and 25 percent cited convenience.

If you have an audio or portable digital device news tip please emailJoseph Palenchar.

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