Smartphone Sales Inching Up On Feature Phones

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Americans like the bells and whistles of smartphones, but when it comes to handsets, they still prefer that their devices act as phones first and everything else second.

So-called "feature phones" -- those that have some elements of smartphones, but do not employ their own operating system -- continue to hold the lion's share of phones sold in the U.S., accounting for 72% of new handset sales in the second quarter of 2009, according to the NPD Group. Smartphones (phones that have their own operating systems), however, continue to increase their market share: Sales were up 47%, compared with the previous year; they accounted for 28% of the phones sold during the quarter, according to NPD.

"Feature phones are taking on more of the physical characteristics of smartphones, and often offer greater exposure to carrier services," said Ross Rubin, director of industry analysis at The NPD Group, in a statement. "With the price gap between smartphones and feature phones narrowing, to remain competitive, feature phones need to develop a better Web experience, drive utility via widgets and sidestep the applications arms race."

Overall, handset sales volume increased 14% during the second quarter of 2009, compared with the same period a year ago, and sales revenue increased 18%. The average selling prices of all mobile phones hit $87, up 4% from the same period in 2008 (no doubt because of the increase in more expensive smartphone sales).

Meanwhile, 20% of all new handsets came equipped with Wi-Fi capability, a threefold increase over the previous year. Both smart- and feature phones are employing more touchscreens as well, with 26% of the new phones sold during the quarter employing the feature. Complete Qwerty keyboards were available in 35% of the handsets sold.

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