Tuesday, May 20, 2008

Mobile Device Sales Decline in the U.S.

Not every child seems to need a mobile phone when the economy is not doing well.

Sara Silver of The Wall Street Journal reports:

U.S. purchases of new cellphones declined in the first quarter for the first time in several years, signaling that worries about an economic slowdown are hurting the handset market, according to two new studies.[dropping the line]

The drop was concentrated among poorer customers using prepaid plans and among households earning $75,000 to $99,000 a year. The upper end of the cellphone market -- phones featuring full keyboards for email and text messaging, and extra features for music downloads and video viewing -- continued to see growth.

The overall decline in handset sales also comes amid finds that growth in wireless-service subscriptions is slowing as the market reaches saturation, with 83% of the U.S. population owning a cellphone now.


This trend benefits makers of feature-rich handsets such as Samsung Electronics Co., LG Electronics Co., BlackBerry-maker Research in Motion Ltd. and iPhone maker Apple Inc. Motorola has struggled to add high-end phones and has lost market share as a result.

At the end of the first quarter, Motorola held 25% of the U.S. cellphone market, compared to 34% at the end of the first quarter of 2006, according to Strategy Analytics. During the same period, Korean competitors Samsung had increased its share of the U.S. market to 22% from 15% and LG rose to 21% from 16%. RIM's BlackBerry devices comprised 8% of the market, enabling the company to take the No. 4 slot from Nokia Corp., the global market leader.

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