iPhone 3G overtakes the RAZR as best-selling domestic handset

According to a report from NPD, sales of cellphones have shifted in a manner which should shock and stun even a casual observer. Apparently for the first time in years, Motorola's ubiquitous RAZR has been overtaken in consumer sales... by the iPhone 3G. This is a watershed moment for handset sales in the US, marking not only a shift away from the dominant market leader, but a turn towards more complex, full-featured devices. The news comes hot on the heels of NPD's previous findings, which still placed the RAZR in the top spot -- though with ever-decreasing numbers. In that same report, the iPhone found itself in second place, but it appears that flagging interest in the inescapable dumbphone coupled with the recent iPhone PR blitz have put Apple's moneymaker into the top position. The news is also buoyed by recent reports that Apple has overtaken RIM as the number two smartphone vendor, and a J.D. Power study which found affection for the device waxing in the extreme. Overall, however, handset sales fell 15 percent year-over-year, and LG managed to snag the top brand position, with two models in the top five. Still, if there already wasn't a clear indication of the market moving towards both smartphones and touchscreen devices, this should give everyone a clearer picture of both the public's wants, and the power of Cupertino's ad-men. Full PR after the break.

FOR IMMEDIATE RELEASE

The NPD Group: iPhone 3G Leads U.S. Consumer Mobile Phone Purchases in the Third Quarter of 2008

Overall consumer mobile phone purchases declined 15 percent year-over-year

PORT WASHINGTON, NEW YORK, NOVEMBER 10, 2008 – According to The NPD Group, the leader in market research for the wireless industry, Apple's iPhone 3G surpassed the Motorola RAZR as the leading handset purchased by adult consumers in the U.S. in the third quarter (Q3) of 2008. RAZR had been ranked by NPD as the top-selling consumer handset for the past 12 quarters.

Even with stronger consumer sales of iPhone, and the mobile phone market's normal seasonal uplift after Q2, domestic handset purchases by adult consumers declined 15 percent year over year in Q3 to 32 million units. Consumer handset sales revenue fell 10 percent to $2.9 billion, even as the average selling price (ASP) rose 6 percent to $88.

Top-selling handsets and mobile phone brands

"The displacement of the RAZR by the iPhone 3G represents a watershed shift in handset design from fashion to fashionable functionality," said Ross Rubin, director of industry analysis for NPD. "Four of the five best-selling handsets in the third quarter were optimized for messaging and other advanced Internet features."

The top handset models in rank order, based on unit sales in Q3, were as follows:

1. Apple iPhone 3G
2. Motorola RAZR V3 (all models)
3. RIM Blackberry Curve (all models)
4. LG Rumor
5. LG enV2

Popular features

When it comes to the specific features that motivated U.S. consumers to purchase their handsets, 43 percent of handset buyers cited the need for a camera and 36 percent noted the ability to send and receive text messages. Mobile phones with a QWERTY keyboard experienced the greatest year-over-year rise in sales; 30 percent of handsets were sold with this feature in Q3 2008, versus just 11 percent the year prior. Also this quarter 83 percent of phones purchased were Bluetooth enabled (versus 72 percent last year), and 68 percent of phones purchased in Q3 were music enabled (versus 49 percent last year).

"A growing data divide continues in cellular handsets," Rubin said. "Those who see the value in wireless Internet access are justifying the investment, whereas voice-centric users have little incentive to upgrade, which is obviously detrimental to operators who seek to sell data plans and media-access services to their subscribers."

Methodology: NPD compiles and analyzes mobile device sales data based on more than 150,000 completed online consumer research surveys each month. Surveys are based on a nationally balanced and demographically representative sample of U.S. adults. Results are projected to represent the entire population of U.S. consumers age 18 and older.

About The NPD Group, Inc.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, visit http://www.npd.com/.

[(Unverified) Posted Nov 10th 2008 10:52AM]

This really isn't that impressive considering the Razr is no longer being sold by most carriers, and its 5 years old now.

[(Unverified) Posted Nov 10th 2008 4:35PM]

And by major carriers, you aren't including AT&T, T-Mobile, and Alltel. Why?

Also, the razr was only released four years ago, and it wasn't really sold to the masses on all carriers until about three years ago.

[(Unverified) Posted Nov 10th 2008 11:42AM]

I wanna see the numbers for this one, I know the iPhone is popular, but out of all phone sales its sold the highest quantity? That is a hard pill to swallow. I even recently gave into my boycott of Apple products with a nano that was given to me as a gift and I have to say I love it. But I wanna see the numbers. I'm in retail sales, and even the Curve seems to not fit in that model because so many people get the buy one get one phone over a full featured phone. So I gotta see the numbers on this one.

[(Unverified) Posted Nov 10th 2008 1:44PM]

But, technically speaking, isn't the iPhone a feature phone, not a smart phone, since it doesn't really have native applications? Thus, the comparison to the Blackberry is a bit misleading.

[(Unverified) Posted Nov 10th 2008 6:58PM]

I'd say it's a smart phone for sure. What native apps are you talking about?

[(Unverified) Posted Nov 10th 2008 10:30PM]

I hope you're not still thinking the iPhone only runs web-based applications. Haven't you seen the commercials on TV? You know, like the ones where they're running Cro-Magnum Rally with 3D accelerated graphics and tilt sensitivity for steering?

Although I am an Apple fanboi, I still haven't given into the iPhone. I love my SonyEricsson phones with unlocked firmware, ability to run J2ME apps, and tether my MacBook Pro via Bluetooth.

If Apple adds a 5+ megapixel camera WITH FLASH AND AUTOFOCUS and tethering ability (which I've heard is coming soon), I'll bite. A higher-resolution screen would be nice too. I would be using this as a MID so I want a good quality screen.

[(Unverified) Posted Nov 11th 2008 9:24AM]

The iPhone is kind of 'in between'. It's a feature phone with a lot of potential.

However, until it has (nearly) out-of-the-box support for tethering and push email, I will not consider it a smartphone. I'm tempted to require a removable battery too, but not for any real business reasons...only because the lack thereof simply offends me.

I'm sure lots of business weenies convince themselves that it's a smartphone...but that's just so they can play games on it.

[(Unverified) Posted Nov 11th 2008 12:57PM]

I would be bold to say that the iphone screen has a pretty damn good resolution. and tethering ability is gonna cost you more then just paying for the 3g service.

[(Unverified) Posted Nov 11th 2008 7:49AM]

I've seen the adds. But I was under the impression the apps in the app store don't have native access to the OS (for instance, can they multitask?). I've been able to download and install apps over the internet from an "app store" for like 10 years already. That's not new, but my old Panasonic phone certainly wasn't a smart phone!