Mobile phone market grows smarter in Q3

Consumer handset sales in the United States reached 38 million units in the third quarter of this year, with smartphones accounting for 11% of those sold, according to a report released today by the NPD Group. Smartphone sales are up from 4% in the third quarter of 2006, an increase of 163% year over year.

Ross Rubin, director of industry analysis for NPD, noted that the increase in smartphones shows that this once negligible niche is becoming more influential in the consumer market, which is also evidenced by new entrants such as Apple and the Open Handset Alliance.

Capturing 31% of the market, Motorola had the largest share of handsets sold, followed by a close race between LG at 17% and Samsung at 16%. Nokia and Sanyo also made the top five, capturing 11% and 4% market share, respectively.

In the handsets, popular handset features including Bluetooth capabilities and music players became more common. Seventy-two percent of phones sold were enabled for Bluetooth, which represents an increase of 44% since last year’s third quarter, and 50% of new phones – double last year’s amount – were able to play music.

NDS highlighted the type of subscription plan and convenience as the most important determinants of a consumer’s handset choice. "Carriers continue to be the dominant distribution channel for mobile phones," Rubin said in the report. "However, mass merchants are bringing in new customers, such as those on pre-paid plans, and wireless specialists offer a broader range of carriers from which to choose."

In total, NPD estimated total third-quarter 2007 consumer sales of $3.2 billion, which is a 47% increase since the same period one year ago.