U.S. Cell Phones Sales Decline

Cell phone sales in the second quarter were down 13%, but customers increasingly bought more sophisticated handsets.

Marin Perez, Contributor

August 19, 2008

2 Min Read

An economic slowdown and increased competition affected U.S. mobile phone sales in the second quarter, according to a report by NPD Research.

The report said mobile handset sales to consumers totaled 28 million units in the quarter, a 13% decline from the same period last year. Overall, the sales totaled about $2.4 billion, down 2% from the previous year.

"Quarterly unit-sales of handsets fell to their lowest level since NPD began tracking the category in 2005," said Ross Rubin, director of industry analysis for NPD, in a statement. "Even so, major manufacturers picked up market share that was lost by Motorola."

Motorola sold the most handsets with about 21% of the market, but that was a 6% decline from the previous quarter. The company was able to post a small profit for the second quarter, mainly due to selling more phones than expected.

But Motorola is still reeling from years of sluggish phone sales, and recently brought in a new mobile phone chief to head up the ailing handset division.

Samsung and LG Electronics were hot on Motorola's heels with 20% of handset sales each. Both companies benefitted from the popularity of high-profile devices like the Samsung Instinct and the LG Dare.

Samsung saw second quarter profits jump 51% in the second quarter, but the company said it anticipated tough business months ahead due to a worldwide economic slowdown.

Nokia was in fourth place with 9% of sales in the United States, but the Finnish company remains the worldwide leader in mobile phone sales. Research In Motion had 7% of the market, according to NPD.

The report did not specifically report on sales of the iPhone, but Apple is increasingly becoming a player in the handset market. While Apple has not released U.S. sales figures, the company did say the iPhone 3G sold one million units worldwide in its debut weekend.

While overall cell phone sales slipped, the average selling price increased 14% from last year to $84. Customers are also seeking out more sophisticated devices, as smartphones comprised 19% of all mobile phone sales for the quarter, an increase of 9% from the previous year.

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