iPhone 3G overtakes the RAZR as best-selling domestic handset

According to a report from NPD, sales of cellphones have shifted in a manner which should shock and stun even a casual observer. Apparently for the first time in years, Motorola's ubiquitous RAZR has been overtaken in consumer sales... by the iPhone 3G. This is a watershed moment for handset sales in the US, marking not only a shift away from the dominant market leader, but a turn towards more complex, full-featured devices. The news comes hot on the heels of NPD's previous findings, which still placed the RAZR in the top spot -- though with ever-decreasing numbers. In that same report, the iPhone found itself in second place, but it appears that flagging interest in the inescapable dumbphone coupled with the recent iPhone PR blitz have put Apple's moneymaker into the top position. The news is also buoyed by recent reports that Apple has overtaken RIM as the number two smartphone vendor, and a J.D. Power study which found affection for the device waxing in the extreme. Overall, however, handset sales fell 15 percent year-over-year, and LG managed to snag the top brand position, with two models in the top five. Still, if there already wasn't a clear indication of the market moving towards both smartphones and touchscreen devices, this should give everyone a clearer picture of both the public's wants, and the power of Cupertino's ad-men. Full PR after the break.

FOR IMMEDIATE RELEASE

The NPD Group: iPhone 3G Leads U.S. Consumer Mobile Phone Purchases in the Third Quarter of 2008

Overall consumer mobile phone purchases declined 15 percent year-over-year

PORT WASHINGTON, NEW YORK, NOVEMBER 10, 2008 – According to The NPD Group, the leader in market research for the wireless industry, Apple's iPhone 3G surpassed the Motorola RAZR as the leading handset purchased by adult consumers in the U.S. in the third quarter (Q3) of 2008. RAZR had been ranked by NPD as the top-selling consumer handset for the past 12 quarters.

Even with stronger consumer sales of iPhone, and the mobile phone market's normal seasonal uplift after Q2, domestic handset purchases by adult consumers declined 15 percent year over year in Q3 to 32 million units. Consumer handset sales revenue fell 10 percent to $2.9 billion, even as the average selling price (ASP) rose 6 percent to $88.

Top-selling handsets and mobile phone brands

"The displacement of the RAZR by the iPhone 3G represents a watershed shift in handset design from fashion to fashionable functionality," said Ross Rubin, director of industry analysis for NPD. "Four of the five best-selling handsets in the third quarter were optimized for messaging and other advanced Internet features."

The top handset models in rank order, based on unit sales in Q3, were as follows:

1. Apple iPhone 3G
2. Motorola RAZR V3 (all models)
3. RIM Blackberry Curve (all models)
4. LG Rumor
5. LG enV2

Popular features

When it comes to the specific features that motivated U.S. consumers to purchase their handsets, 43 percent of handset buyers cited the need for a camera and 36 percent noted the ability to send and receive text messages. Mobile phones with a QWERTY keyboard experienced the greatest year-over-year rise in sales; 30 percent of handsets were sold with this feature in Q3 2008, versus just 11 percent the year prior. Also this quarter 83 percent of phones purchased were Bluetooth enabled (versus 72 percent last year), and 68 percent of phones purchased in Q3 were music enabled (versus 49 percent last year).

"A growing data divide continues in cellular handsets," Rubin said. "Those who see the value in wireless Internet access are justifying the investment, whereas voice-centric users have little incentive to upgrade, which is obviously detrimental to operators who seek to sell data plans and media-access services to their subscribers."

Methodology: NPD compiles and analyzes mobile device sales data based on more than 150,000 completed online consumer research surveys each month. Surveys are based on a nationally balanced and demographically representative sample of U.S. adults. Results are projected to represent the entire population of U.S. consumers age 18 and older.

About The NPD Group, Inc.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, visit http://www.npd.com/.

[Maciek @ Nov 10th 2008 10:22AM]

WOW...What a great phone to compete against. But then again RAZR is actually more advanced since it can copy/paste/video/mms and the battery lasts longer too :-)

[who? @ Nov 10th 2008 10:25AM]

What's that? Jealous much?

[Captain Drew @ Nov 10th 2008 10:26AM]

I be SO ready to switch from my little orange PEBL to an iPhone, but this little flip phone has one thing that the iPhone ain't got: native handsfree voice-dialing. That makes this space pirate very sad :(

[J @ Nov 12th 2008 4:48AM]

Yeah, I'm sure Steve Ballmer and the CEO of Palm, Ed Colligan, fully agree with you...

[BobFromVegas @ Nov 10th 2008 11:51AM]

I love my Iphone, but really, the RAZR is 3 years old. It had a lot of buzz, but now the Iphone had more. So yea.

[DreamTheEndless @ Nov 10th 2008 5:08PM]

@Captain Drew -

Who cares if it's "native"?
My iPhone's a computer. If I want, I can install a voicedialing application that works well on that computer. What does "native" have to do with it?

[Ashram @ Nov 10th 2008 3:05PM]

You can keep your RAZR.

I own one that I used to use and, let me tell you, that stupid phone kept having voice quality problems. What good is a phone if you can barely hear the person you're speaking to because you also hear a lot of cellular interference as well?

On top of that, the problem occurred after the warranty expired, so I was stuck with that until I was given an iPhone as a gift.

I preferred a Blackberry but, in this case, the iPhone is a nice phone, not to mention a very nice gift. A nice phone is a nice phone, so I wasn't about to look the gift horse in the mouth and, finally, I have a phone where I could hear the person I'm talking to with clarity.

And, I'll admit, I have gotten to like my iPhone as it has been very handy and pretty cool. It would've been nice if it was more obscure because that would enhance the cool factor instead of it being cool AND commonplace.

Now, I did have difficulties with the phone dropping calls and crap, but since I upgraded the firmware to version 2.1, the problems were the things of the past, unlike the buzzing RAZR.

But, ultimately, I have a phone that works as a phone. I can hear people clearly and they can hear me. The rest of the phone is icing, except for the fact that you can't replace the battery yourself very easily.

[andy @ Nov 10th 2008 2:59PM]

No surprise here, smartphone technology is maturing

[Mark Anderson @ Nov 10th 2008 3:48PM]

Thank you Engadget for making a big deal about the successful launch of a product in one quarter of the year and noting that it's sold more units than a phone that's been out for about four years or so. I also like your sense of perspective in comparing one quarter's sales and quoting a small scale customer satisfaction survey.

It's good to see your sense of proportion remains spot on.

Or maybe we should just come back next quarter when RIM is holding down the iPhone wang slapping it in the face shouting "Who's your Daddy now, bitch?".

[Millah @ Nov 11th 2008 3:21AM]

Gotta love these douches who love to point out the few VERY MINOR things that its missing, completely ignoring the countless of other things that blow away every other phone out there. Oh wow you can copy and paste on your RAZR, but what good is that when your software is virtually non-existent. So I guess copy and paste is really a feature that sells phones huh, only because the mighty iPhone doesn't have it. Maybe copy and paste is more important to you than desktop class software built off OSX thats more powerful and more robust than any other handheld on the planet, but thats cool whatever gets you through the day man. Go ahead, use your special copy and paste thats basically worthless on a phone that can't take advantage of it due to limited software, while I browse the web in a true desktop browser or download amazing apps that add functionality no other handheld has or could even come close to imitating. Enjoy your precious copy and paste, but I actually do have MMS from an app I downloaded for free, so there goes one more precious feature for you guys to nitpick over.

I swear kids get so jealous and just like to think they're cool by hating on whatevers popular. They think going "against the grain" makes them special, but all it does it make you just like every other moron who does the same thing.

[OCEAN 'CLAK' 20th @ Nov 10th 2008 10:22AM]

YES THATS BECAUSE ITS THE BEST PHONE, I KNOW CAUSE ITS MADE BY APPLE AND IVE GOT ONE

[John @ Nov 10th 2008 10:24AM]

in other words, because it was a global launch date, and because everyone who bought the crippled first gen wanted a 3G connection, they sold a crapload in a short amount of time, more than RAZRs in the same amount of time.

[Rattyuk @ Nov 10th 2008 10:38AM]

"in other words, because it was a global launch date, they sold a crapload in a short amount of time"

Er, if you read the article this was US figures so global launch had nothing to do with it.

[thedesolate1 @ Nov 10th 2008 10:25AM]

Damn apple wasn't playing any games when it planned to takeover the mobile industry! The phone is too locked down and limited in functionality for my tastes but I am very happy for them. I hope this brings in a new era of higher standards and innovation by the rest of the companies to get off their asses and stop slacking.

[jorvay @ Nov 10th 2008 11:22AM]

It's also a testament to the competitive data plan pricing in the US. I just hope the iPhone can lead to similar results here in Canada. I thought about getting a voice+data phone this year, but the costs here led me to stick with a simple voice-only phone. We'll see how that changes over time.

[Oskin @ Nov 10th 2008 11:33AM]

Well actually it's not that cheaper in the us. It used to be 20$ for unlimited but I think its now 30$ for the 3g unlimited plan with AT&T compared to the 30$ 6gb plan with Rogers. Alright its not unlimited but I use the 3g network all the time and i've never busted out the 6gb. We've come a long way if you think that only last year it would've cost you 75$ for a 200mb plan. I still can't wait for the day when 30$ will buy you an all unlimited plan (voice, data, sms, voicemail, etc).

[Andrew @ Nov 10th 2008 11:38AM]

I was extremely lucky to get my $15 -unlimited- data plan from Telus last year. No tethering, but whatever!

Now if only they had better phones...Storm...Touch Pro, so soon!

[YoYoYo @ Nov 10th 2008 9:54PM]

I say it's a matter of lucky timing. The fact that the iPhone is dwarfing even the entry-level freebies says a lot about market saturation and people on their second/third handset being wiling to trade up now, but not before. The name helps, but the crappy quality of the browser, basic text editing, etc were all similar in scale to the problems seen by Blackberries and Trios.

[sockatume @ Nov 10th 2008 10:26AM]

Big news for the US, but the RAZR's international sales only come to about half those of Nokia's best-sellers, so there's a way to go.

[Surur @ Nov 10th 2008 11:37AM]

This news is actually not that interesting. It seems before the iPhone the ranks were pretty spread-out, with the top handselts only having less than 10% of the market each. The Razr only sold 1.3 million in Q2 2007 (http://edageek.com/2007/08/06/strategy-analytics-handset/) when it was presumably more popular than now. That means to be the most popular handset you only have to sell less than 2 million, and we know the iPhone sold the majority of its 6.9 million in US.

[Patriks7 @ Nov 10th 2008 12:15PM]

True that.. and unlike the (emo) RAZR and iPhone, Nokia makes phones that are actually worth it..

[Pradster @ Nov 10th 2008 10:26AM]

Nobody saw that one coming!

/sarcasm.


Seriously, I think many other commentators right here at engadget had seen this one coming when they predicted that the iphone will be the new RAZR.


I wonder if Apple will go the Moto way....

/joking :P

[aaron @ Nov 10th 2008 10:59AM]

/You need more of these ;)

[joe23521 @ Nov 10th 2008 1:37PM]

All comments should come with // attached.

[Pradster @ Nov 10th 2008 2:39PM]

I second the motion!

[A non eMous @ Nov 10th 2008 4:53PM]

Actually the comments in question should be wrapped like the example below...

Wrapping comments with descriptors is not overkill

[A non eMous @ Nov 10th 2008 4:55PM]

*note: apparently html-esque characters are automatically removed when posting a comment. Otherwise my previous comment would make some sense...hopefully

[vdogg89 @ Nov 10th 2008 10:26AM]

so does this mean the iPhone will die out soon

[utahnkid @ Nov 10th 2008 12:56PM]

You haven't heard about the iPhone 3G? The regualr iPhone already died..

[Maciek @ Nov 10th 2008 2:53PM]

we could only be so lucky

[Stewart @ Nov 10th 2008 10:26AM]

Wow. So everyone's paying that $220 monthly plan then...at least I'm not alone.

[GON @ Nov 10th 2008 10:27AM]

Pfft--I thought you meant in overall sales, not quarterly sales. Anyway, given Motorola's financial troubles and Apple's marketing, this is really no surprise.

[Ysleiro @ Nov 10th 2008 11:09AM]

Correct me if I'm wrong but didn't the sales comparison between RIM and Apple specifically refer to a certain quarter?

A real test would have been if ATT would have dropped the Bold when it was supposed to. Then we would have seen what is what.

[mtpls @ Nov 10th 2008 10:27AM]

" but a turn towards more complex, full-featured devices. "

That's funny, while the iPhone is more full-featured I actually found the RAZR more complex to use for it's time being.

Still, it should cost even less to be affordable to even more people.

[Perspective @ Nov 10th 2008 10:28AM]

Maciek: Seriously, you cannot possibly be such a tool. Wait. . .this is a tech site. . .you can be! Congrats.

[Jeff @ Nov 10th 2008 10:28AM]

I own one too...its the worst 'phone' I've used...great internet device though.

[KarlW @ Nov 10th 2008 11:32AM]

Does the job for me. I can make calls just fine.

Maybe you bought the iPod touch? That'd explain it.

[happy_penguin @ Nov 10th 2008 2:35PM]

I've owned mine for over a year now. It's definitely not the worst phone I've ever used, but it isn't the best. That honor belongs to the Motorola Startac. Still, as an overall package I love the iPhone and I do believe it is among the best out there, as an overall package. Still, there certainly are many worthy competitors. I think Apple's greatest accomplishment with the iPhone is to proliferate the idea that there can be an easy to use, feature rich smartphone for the masses and that only drives the competitors to build better and better devices for the wide market instead of concentrating on just the business market.

[hi im a mac @ Nov 10th 2008 10:44AM]

Remember You cant forward a txt message,Record video,MMS or Copy&paste.

JUST wait til you can :)

[happy_penguin @ Nov 10th 2008 2:43PM]

The G1 already has most of that and Apple doesn't seem to be interested in it which is a shame.

[eilegz @ Nov 10th 2008 10:44AM]

I cant believe this and then we are in "economic crisis"...

But then people can afford this yeah right....

[KarlW @ Nov 10th 2008 11:46AM]

@r3loaded:

I pay £35 per month for my iPhone, but then, I do get 600mins/500texts, versus your 300.

The iPhone's monthly fee isn't expensive (in the UK). It never was. I've had both of them. I even made a profit selling the old model on eBay. There are lots of myths about the iPhone, being spread by people who just hate the fact that Apple are being successful.

They're not doing it through dirty tricks; they're doing it as honestly as any corporation can. They make a product, and if you want it, you get it. Enough people want it, so they sell a lot of them. Stop the hating. Especially you WebKit-toting Android users - you guys have a lot to thank the iPhone and Apple for.

[lowdef @ Nov 10th 2008 1:41PM]

just put it on a credit card and youre fine bro!

[matt @ Nov 10th 2008 1:45PM]

Apple should be thankful to the KHTML team I think you mean.

[the tif @ Nov 10th 2008 10:45AM]

I don't know agree that the vast majority of iPhone users know how to use their iPhone. I mean, a lot of people don't care, but the fact that its an Apple phone with a touch screen makes them want it. This has nothing to do with people's desires for more intelligent phones and everything to do with Apple's ability to make you want something.

/wishes he had an iphone.
//wishes he had $200 a month to pay for a data plan

[brian @ Nov 10th 2008 10:55AM]

$200 a month for a data plan? wtf, where do you live? My cell phone bill is like 98 bucks a month with unlimited texting, and the iphone package, after taxes.

[r3loaded @ Nov 10th 2008 11:05AM]

WTF $200 a month?

This is exactly why I haven't bought an iPhone. 3 UK + free Nokia E61 (this was in june 2007) + 300mins/texts + unlimited data = £20/month. Which is about $32/month due to our massively devalued pound :(

[fuzzyshoo @ Nov 10th 2008 11:16AM]

It costs me $45/month, that's with 450 anytime minutes, free nights/wknds/mobile2mobile, and $5 for $200 texts.This is why I fail to understand why people think you need to make $200k/annual to have an iPhone.. it is not expensive by any means. $200 for a damn nice out of box basically zero customization needed phone isn't too much to ask. If you want a phone, get a phone. If you want a smart phone with email, you're going to shell out that kind of bank anywhere you go. If you want both a lot of minutes and unlimited data, look to put around $75 a month at least. But there really is no reason to trash the people that use it because you have skewed usage priorities.

Sure I'm getting a 25% discount on the plan through AT&T Premiere, but the big draw was that this only cost about $10 more/month than my old dumb-phone. And the iPhone plans cost THE SAME as the plans for an HTC Touch Pro. Blackberry plans cost a minimum of $10 more/month.

I'm in corporate finance, obviously a dedicated worker. :) I wanted a smart phone that would be well supported for the length of my 2 year contract, age gracefully and be useful on the go. If I wanted a Blackberry, AT&T reps were here last week with working Bolds for us to play with and drool over. My company would pick up the entire tab, but I'm not dealing with a locked down network. I wanted a Touch Pro for a while as well, but ultimately decided that out of the box and down the road.. I will get more use out of my iPhone. And it would cost me very little, after the initial purchase price.

I find the iPhone 3G passing the RAZR as a huge surprise. The device has been out for, what, 6 months? And the RAZR is how old? How often given away for free? How many can you get with a family plan?

I loved my RAZR. It was a great phone. But myself, along with a lot of others as this article shows, have moved on and need/want more from a phone.

[the tif @ Nov 10th 2008 11:50AM]

So my previous comment about $200/month is a slight exaggeration. But to get an iPhone data plan in Canada costs $70 for 1gb and $85 for 2 gb (including system access fees etc). Thats not cheap for those of us who don't have our companies picking up the tab.

But if thats what you want, then yeah, its a pretty fun phone. Don't get me wrong - I'd like to have one, but its just prohibitively expensive in Canada at the moment, plus the cellular network is archaic. If I could just get signal everywhere I'd be happy.

[renzo.gaspary @ Nov 10th 2008 10:47AM]

I will be replacing my RAZR for an iPhone today.