Smartphone Sales Reaching Critical Mass

According to the NPD Group, smartphones accounted for 31% of all handset sales in the fourth quarter of 2009 (up from 23% for the same period in 2008). However, with nearly two-thirds of all smartphone purchases at $150 or less, year-over-year revenue growth for manufacturers was down from the previous year. Consumers' appetite for smartphones is continuing unabated, but thanks to dropping prices, companies' margins on those phones are getting smaller and smaller. According to the NPD Group, smartphones accounted for 31% of all handset sales in the fourth quarter of 2009 (up from 23% for the same period in 2008). However, with nearly two-thirds of all smartphone purchases at $150 or less, year-over-year revenue growth for manufacturers was down from the previous year. According to the NPD Group, smartphone year-over-year revenue growth was 21%, down from the 37% posted in Q4 2008. "We've seen several popular models released under the $100 pricepoint, including the iPhone 3G, and that's contributing to the popularity of smartphones," Ross Rubin, executive director of industry analysis at NPD, tells Marketing Daily. "Smartphones are moving beyond the early technology adopters to a broader consumer market."