Wireless Sales on the Decline

Sales are dropping as the wireless market reaches its maturation – approximately 84% of Americans have some type of wireless device – and the United States economy slows. CNET News revealed that this was the first time since 2005 the NPD Group, a market researching firm, saw such a decrease in sales.

The NPD Group further reported that during the first quarter of 2008, cell phone companies sold around thirty one million handsets in the United States, producing nearly $2.7 billion but still falling 22% short of what they generated in the first quarter of 2007. The firm predicted that the drop could be connected with the slowing economy.

Although over three-fourths of the country have wireless service through a carrier, because the economy on shaky ground, consumers are currently less likely to upgrade to the next new phone. Morever, due to the fact that so many people are covered, there are less people who are going to feel the need to buy a new cell phone or plan.

CNET News goes on to say that mobile devices like the Smartphone, as well as devices with the capabilities to play music, are still doing a brisk business on the market. Sales for the Smartphone not only increased 10% over where they were in 2007 but also comprised nearly 17% of all cellular phone sales during the first quarter of 2008. Of all the mobile devices sold during the first quarter of this year, 60% featured the ability to play music, up 19% from the previous year. This trend may suggest that consumers are not interested in signing up for new plans or updating the phones they already have unless the features offered with the phone are worth the price, given the economy.

Despite the rising sales of certain items and the improvement of some companies, like Research in Motion, thanks to their Blackberry, some companies are still in trouble. CNET News reports that Motorola is being sold in spite of its continued lead in the United States – where Nokia cannot seem to take a firm hold.

(May 22, 2008)