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.

[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.

[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.

[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.

[NLI @ Nov 10th 2008 10:48AM]

I'm confused here. Are they saying the number 2 model in the US for Q3 was a 2005 model?!

http://www.gsmarena.com/motorola_razr_v3i-1352.php

[rattyuk @ Nov 10th 2008 10:58AM]

Yup - but remember that the RAZR is mostly given away now with a contract.

[Mark @ Nov 10th 2008 12:32PM]

Suckered by glitz and glamor; the iphone sits on top of the mobile phone heap. No thanks. I actually think a phone should serve me rather than me serve the phone. I will keep my subservient Razor and get the calls I need when I need them to do my job. Hey Steve, you can keep your toy. To ATT and other carriers, I will keep my money.

[trainwrecka @ Nov 10th 2008 11:10AM]

No you won't. You're sending your money to AT&T to use your RAZR. Good job.

[trainwrecka @ Nov 10th 2008 11:11AM]

Well, that is unless you left out some info. Are you using pay-as-you-go?

[Godfail @ Nov 10th 2008 11:14AM]

Glitz and glamour? Are you serious? Excellent MP3 player, near PC-like web browsing, full email functionality with multiple accounts and Exchange integration, aGPS, 3G data connection...these are functions, not glitz nor glamour.

[Andrew T. @ Nov 10th 2008 11:48AM]

"Glitz and glamour? Are you serious? Excellent MP3 player, near PC-like web browsing, full email functionality with multiple accounts and Exchange integration, aGPS, 3G data connection...these are functions, not glitz nor glamour."

It's true the iPhone has all of that but you are assuming that everyone who bought the iPhone uses all those functions. I can just easily say that people who bought the iPhone don't even know of half the features of the iPhone. I can even go on further saying most who bought the iPhone are in their teens who could give a rat's ass about Exchange integration and e-mail. All those teens care about is if they could get on Facebook and go on YouTube (heck they probably don't even know that it's 3G capable just as long as they have access to the web, they wouldn't know the difference between EDGE and 3G!)

I know there are some buyers out there who actually bought the iPhone for e-mail and for all the other features the iPhone provides, but I guarantee you if you go ask an iPhone user off the street, 8/10 or even 9/10, first thing they will comment on is how it looks and the touchscreen...and oh yeah, I can check my Facebook and go on YouTube; they won't even talk about the aGPS capabilities or how they can setup their e-mail.

This is not a hate post towards the iPhone, it's great they outsold RIM in Q3, congratulations to Apple, but just like the iPod, consumers are willing to buy it simply because of the glamour and it definitely doesn't hurt that it also makes phone calls too.

[Kizorblade @ Nov 10th 2008 11:56AM]

Actually, Stevie J. said that 80% of the customers actually use 10 or more applications on the thing. That was before 2.0 with the App store and all. So yeah. They do use most of the phone.

[Godfail @ Nov 10th 2008 4:04PM]

"It's true the iPhone has all of that but you are assuming that everyone who bought the iPhone uses all those functions. I can just easily say that people who bought the iPhone don't even know of half the features of the iPhone. I can even go on further saying most who bought the iPhone are in their teens who could give a rat's ass about Exchange integration and e-mail. All those teens care about is if they could get on Facebook and go on YouTube (heck they probably don't even know that it's 3G capable just as long as they have access to the web, they wouldn't know the difference between EDGE and 3G!)"

Who is assuming here? Take one look at the comments in the App store and you'll see exactly what teens are doing...much, much more than using Facebook (which has more adults than myspace but I guess you're not aware of that).

Also, what makes you think that teens are the larger market for the iPhone? In fact, I've never seen a teen in line at an Apple store for the phone, and I didn't see them there on the morning of launch...the only thing I can say for certain is that you assume far more than I. It doesn't matter if every user uses every function, what matters is that the user has the functions he needs...and the iPhone seems to provide a lot to a lot of different types of user.

[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....