Smartphones are making significant waves in the mobile device industry as the features and capabilities of each are appealing to more than just the enterprise user. Consumers of all walks of life are now demanding the functionality that a smartphone can provide, changing the dynamics within the industry and driving growth.

 

The NPD Group (News - Alert), a market research firm focused on the wireless industry, has reported that consumer sales of smartphones to U.S. consumers reached 9 million units from January through July 2008. When compared to the same period the year before, such sales represent an increase of 84 percent year-over-year.

Even as overall handset sales and revenues faced a decline in the U.S., smartphone revenues increased 71 percent to reach nearly $1.7 billion. Apple launched the iPhone (News - Alert) 3G in July of 2008, catapulting the company into the No. 2 slot in smartphone unit sales just behind RIM – the maker of the BlackBerry. 

 

The percentage of overall handset sales to consumers grew in the U.S. from January through July 2008 with smartphones representing 19 percent of all handset purchases as compared to just 9 percent for the same period the year before.

“Declining prices, streamlined form factors, and consumer Internet connectivity have begun to bring into the mainstream devices that once appealed only to mobile professionals,” said Ross Rubin (News - Alert), director of industry analysis, The NPD Group, in a Monday statement.

The average price of a smartphone sold between January and July 2008 was $185, down 7 percent from $199 during the same period last year. While the increased capability that the smartphone adds is a significant selling point, the fact that these phones are becoming more cost effective is also helping to drive sales.

“As they become inexpensive gateways to the Internet from practically anywhere, smartphones are delivering a better consumer value than ever before; however, more must be done to show the advantages of their operating systems to keep them ahead of increasingly sophisticated feature phones,” Rubin said.

Apple was not the only company to enjoy success this year. RIM and Palm also each saw consumer unit-sales gains against the competition in the first seven months of 2008, posting growth of 24 percent and 9 percent respectively.

“Leading smartphone manufacturers have adopted a variety of software platforms. With advances such as the iPhone SDK, the arrival of Google’s (News - Alert) Android platform, and the open-source path of Symbian,” added Rubin. “Competition stands to intensify for the attention of developers delivering the next great wireless application.”