Purchase of Cell Phones Decreasing in U.S.

The Associated Press reveals that consumers in the United States are buying less cell phones – yet they are paying more for the phones when they do buy them.

Reporting on an NPD Group report published on Tuesday, the Associated Press goes on to say that only twenty eight million phones were sold during the second quarter of this year. This is 13 percent less than how many were sold in the second quarter of 2007.

This is actually the third consecutive quarter that has seen a decline in the purchase cell phones. Thus far, it is also the lowest.

The difference is that the phones which were sold during the second quarter of this year were generally higher end cell phones. They had more features, when tended to make them more expensive as well. As a result, the total market value only saw a decline of 2 percent from 2007. It still totaled in at $2.4 billion.

The report revealed that Motorola Inc. was the most popular, selling more phones than its competitors during the second quarter. Even still, last year it sold 32 percent of its units; this year, that number dropped considerably, down to 21 percent.

However, these findings need to be taken with a grain of salt, as they were based mainly on surveys taken on the Internet, by people who had bought cell phones. Therefore, neither the government nor corporate buyers were included. A different study by a different research firm suggests that those buyers make up for the decline in consumer purchases.

An analyst for the other research firm, IDC, said that the number of handsets shipped to markets in the United States had actually gone up 6 percent from the second quarter of 2007. The firms findings included manufacturer reports.

Still, NPD found that phones cost more this year. The average cost $84, a 14 percent increase from last year’s average. This is mostly due to the prevalence and popularity of smart phones, with Internet access and a number of other high end features.

(August 20, 2008)