NPD: Q1 Cellphone Sell-Through Dips 22%

By Joseph Palenchar On Jun 2 2008 - 6:00am




First-quarter cellphone sell-through dropped 22 percent in units to almost 31 million, but dropped only 6.9 percent in dollars to $2.7 billion, The NPD Group said.

Dollar sales did not drop as dramatically as unit sales in part because of consumers' growing penchant for feature-rich phones, NPD found in analyzing more than 150,000 online consumer research surveys completed each month.

"For the first time since NPD has tracked handset sales, we've noted a decline in sales during the first quarter after the holidays," said Ross Rubin, NPD's industry analysis director. NPD's first-quarter statistics go back to 2006. The reason could be that "with looming economic concerns on the horizon, many consumers may be holding back on new handset purchases, especially those tied to new prepaid plans," he said.

The high penetration rate of cellphones might also be a contributing factor, marketers said.

The survey also found:

  • Smartphone sales accounted for 17 percent of all mobile phone sales in the first quarter, up by 10 percentage points from the year-ago period.

  • Bluetooth was installed in 79 percent of phones sold in the first quarter, up from the year-ago 65 percent.

  • 60 percent of phones sold in the quarter were music-enabled, up from 41 percent during the year-ago quarter and 13 percent in the first quarter of 2006.

  • Carrier stores continued to dominate handset sales, maintaining a first-quarter share of 63 percent of unit sales vs. just 9 percent for mass merchandisers and 6 percent for electronic specialty stores. AT&T-branded stores maintained a 27 percent share compared to 26 percent for Verizon Wireless stores and 12 percent for T-Mobile stores.

  • Motorola's lead in U.S. market share slipped in the first quarter. Although Motorola remained No. 1 in unit sales in the quarter, its share declined from 35 percent during the year-ago quarter to 27 percent in the first quarter of 2008.

  • BlackBerry maker Research In Motion edged up to No. 5 in unit share to 5 percent from 2 percent, replacing Sanyo in the first quarter.

First-quarter handset share breaks out like this: Motorola, 27 percent; Samsung, 18 percent; LG, 17 percent; Nokia, 8 percent; and RIM, 5 percent.

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