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For the first time since it started monitoring mobile phone sales, analyst firm NPD notes a decrease in the number of handsets sold in the United States for the first quarter this year by a significant 22 percent.
The cause has less to do with a mature market than with a squeeze on the economy and consumers' buying power, the firm says. NPD estimates sales of about $2.7 billion during the first quarter of 2008, down from $2.9 billion during the same period last year.
"Cellular phone service has become a practical necessity in modern life; however, with looming economic concerns on the horizon, many consumers may be holding back on new handset purchases, especially those tied to new pre-paid plans," Rubin said.
Market share among the handset makers stayed mostly the same, with Motorola still on top with 27 percent of all units sold, although that's down from 35 percent a year ago. Rounding out the top five are Samsung at 18 percent, LG at 8 percent, Nokia at 8 percent and BlackBerry with 5 percent. Dropping out of the top five was Sanyo.
Smart phones, like BlackBerrys and Palm Treos, continue to make up more of the market, comprising 17 percent of all phone sales, but these higher priced items are often used for business, so the cost is absorbed by a company and not an individual consumer. It's these individual consumers who are causing the dip in sales overall.
Bernstein Research says the U.S. wireless industry added 23% fewer subscribers in the first quarter, compared with the year-earlier period. The slowdown started six months ago, with fewer plans being purchased for kids and by people hit hard by the fallout from the subprime meltdown.
So, does this mean we've reached the peak of cell phone adoption, and with only 1 in 6 US households having eschewed landline service altogether in favor of their wireless handsets? In our opinion, it's not likely. Between the rise of the iPhone/smart phones and the pure convenience and savings that cell phones offer, it looks like this latest sales drop is just a temporary blip on the way to the wireless future.[Source: USA Today]
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Comments
31
Subscribe to commentsMichael L KuhneMay 20th 2008 6:03PM
A drop in cellphone sales means a drop in the number of people killed on the highways every year. I approve.
tessaMay 20th 2008 5:13PM
Please, cell phones DO NOT cause cancer. What a load of crap. They've made reaching people in an emergency a lot easier! Sure, its not good to be constantly on them, but they are not the reason for obesity and cancer. Its pathetic how people blame their problems on phones. What happens if your kid was in an accident or an emergency and couldn't reach you? Who's to blame then? If your afraid of technological advances, go be a hermit in the woods!
mike hyltonMay 20th 2008 5:30PM
the market is saturated, for gosh sakes i see grade schoolers on their way home from school using a cell phone, thats ridiculous, and remember cell phones are a new item, i still have the brick phone that i used in 1991, people seem to be addicted to all the wireless devices today, want to stop the world,? blow some sattelites out of the sky shut the phones and other wireless devices down and watch the country panic, some people could not survive without them
micheleMay 20th 2008 5:34PM
I suddenly woke up one day and decided that I don't need or want all the crap on my phone. It's made me a virtual prisoner. There's no such thing as taking a vacation anymore .... you can be reached ( hounded ) through your phone, Blackberry, laptop. I ditched my Blackberry and now I have a simple, prepaid phone that I picked up at Target. I can make and receive phone calls on it. Period. I'm sick of being a slave to the wirelesss world. It's a step toward getting my life back.
Jeff HeaderMay 20th 2008 5:38PM
Maybe its because they have been linked to radiation
kimMay 20th 2008 6:09PM
I love my cell phone, and I would day that about everybody in the U.S. has a cell phone so sales will go down
steveMay 20th 2008 6:31PM
If ever there was a need for government regulation of an industry, the cell phone industry is it. Free phone? No. It is merely an instrument to deliver the service, which you must subscribe to. Dropped calls? Sorry, not our fault. 911 not working? Not our fault either, sorry your relative is dead because emergency services couldnt locate him. Yes, the government did want us to institute GPS locaters and other technology, but we studied it and deemed it too costly. Just tell the operator where you are.
When is the last time anyone actually sat down and wrote a letter to someone? Or had a face-to-face meeting? Or actually had the strength to put down the cell phone and drive the car?
JennMay 20th 2008 7:21PM
For a military wife, cell phones are our lifeline. Imagine how horrible it would be to come home from the store to find a message on the machine from your soldier. I hate missing calls from my husband because I don't know when he'll be able to call again. With cell phones, even if we're at the store we can still talk with our loved ones. However, if I receive a call while driving I do pull over and if I'm in a store I step outside if I can. I do try to be safe and polite.
Richard FusilierMay 21st 2008 4:07PM
The cell phone scam is worse than the Big Oil- U.S. Government scam on oil. I once bought $50.00 worth of time, time was used and I never msde a single csll . One gets calls for all kinds of crank cslls and charged. Only suckers go for that. American, now, re sucketrs. When does the traditional start fighting to restrore the Republic or start the 2nd Republic. Where is the Grey nd Gold? The fundmental system is now too corrupted nad must be forcefully corrected.
MarieMay 20th 2008 7:51PM
SOME OF YOU DON'T REMEMBER WHEN YOU WENT TO USE A PAY PHONE AND THE DARN THING DIDN'T WORK. SOMETIMES THE RECEIVER CORD WAS CUT AND THERE WAS NO OTHER PHONE AROUND. THAT WAS WHEN A CELL PHONE WOULD HAVE BEEN NICE. NOW THERE ARE HARDLY ANY PAY PHONES, SO THE CELL PHONES CAN BE A LIFESAVER. I KNOW SOMETIMES THEY ARE A PAIN IN THE BUTT. SOMETIMES THEY CAN SAVE YOUR LIFE OR SOMEONE ELSES, OR YOUR CHILDS!
BillMay 21st 2008 11:37AM
I got my wife and I prepaid cell phones after we grew tired of paying $70 a month for service we never really used much. Drop a $25 T-Mobile card in each and you're set for two to three months. I can make, receive calls and text. That's all I need it for. No camera, no games, no stupid ring tones or music.
I was able to keep the same number I've had for the past ten years too.