Smartphone Sales Booming, but Feature Phones Still Dominate, Says Report

Smartphone sales are on the rise, but "feature phones" still constitute the majority of all handset sales, according to new data from The NPD Group.

In an Aug. 19 statement, the market researcher reported that unit sales of feature phones fell 5 by percent in the second quarter of 2009, to represent 72 percent of the market. Smartphones, however, accounted for 28 percent of overall consumer purchases-representing a growth of 47 percent from a year earlier.

Feature phones, unlike smartphones, operate on a proprietary operating system and support third-party software through interfaces such as Java and BREW.

NPD reports that overall handset sales in the United States grew 14 percent year-over-year in the second quarter of 2009 and that sales revenue increased by 18 percent. The average selling price of a phone also increased, by 4 percent, to $87.

"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 NPD, in the statement.

"Although their user interfaces continue to improve, the depth of the applications generally lags behind those of smartphones. 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."

NPD's second-quarter ranking found the LG enV2 and the Samsung Rant to be leading feature phone sales, while the smartphone leaders were the Apple iPhone 3G and the Research In Motion BlackBerry Curve.

NPD additionally found Wi-Fi capabilities on new handsets to have increased, with 20 percent now offering this feature, as well as touch-screens, which were on 26 percent of the handsets purchased in the second quarter. QWERTY keyboards were featured on 35 percent of the handsets sold.

The findings are in keeping with an August report from Juniper Research, which found the handset market to be showing the most growth at its extremes, with demand increasing for both high-end smartphones and entry-level handsets, as well as August data from DisplaySearch, which anticipates that smartphones and high-end features such as video capabilities will boost demand into the next quarter.