Apple’s iPhone helps propel U.S. mobile phone spending to new record

“It took a computer maker and a pager company to convince Americans a mobile phone is worth paying for, and now shoppers are splurging,” Ville Heiskanen reports for Bloomberg.

“U.S. customers shelled out 40 percent more for handsets last quarter than a year earlier, just as Apple Inc. put its Web- browsing iPhone on sale and Research In Motion Ltd. brought out BlackBerry e-mail phones with video features. Spending rose to a record and jumped the most since at least 2005,” Heiskanen reports.

“Americans, previously hard-pressed to pay $50 for a phone, are now more like their European and Asian counterparts and paying $300 to $400 for the top devices,” Heiskanen reports.

“‘The iPhone has made the U.S. consumer appreciate the value of the mobile phone,’ said Carolina Milanesi, an analyst at Stamford, Connecticut-based Gartner Inc.,” Heiskanen reports.

“Sales of pricier handsets such as the iPhone almost tripled last quarter and made up 11 percent of phones sold in the U.S., Port Washington, New York-based NPD said. Shoppers spent $3.2 billion on phones, or $83 each, up from $2.2 billion a year earlier and the most since NPD’s records began in 2005,” Heiskanen reports.

“Rivals to the iPhone and BlackBerry still need to prove they’re up to the challenge. Apple benefits from a loyal following for its iPod music players and Macintosh personal computers, which sell at a premium compared with rival products,” Heiskanen reports. “Research In Motion won over bankers and lawyers with its reliable e-mail pager before branching into phones with video and music players for the consumer market in the past year.”

More in the full article here.


  1. There’s too much FUD out there.

    Here’s a classic:

    “Why the iPhone is a ripoff” (January 18, 2007)

    “1) $500 for a phone is outrageous when you can get the same features on another cell phone for less than $100; 2) The iPhone has no keypad, so it’s not business/text-message friendly.”

    “People just love the iPod. Why, I don’t know. There are plenty of cheaper MP3 players with the same functionality on the market, but hey, it’s Apple.”

    “Apple gets a big win with its iPod and it believes it can gouge the consumer on a follow-on product.”

    “The iPhone is cool technology — you can’t help but ogle the interface — but like PS3, you’d have to be out of your gourd to pay that kind of money for something that’s basically whiz-bang with no more substance than other cheaper, comparable products.”

    – Lucas Mearian

  2. “Apple benefits from a loyal following for its iPod music players and Macintosh personal computers, which sell at a premium compared with rival products,” Heiskanen reports.”

    Gee I thought other tech types had compared Dell to Apple dekstops and laptops with comparable specs and the prices were the same or Apple was even cheaper.

    Sounds like “Heiskanen” has his head up his ass.

  3. That’s the spin on Heiskanen’s story.

    People are out of their minds to buy the iPhone, or they’re just dimwits who are loyal to Apple and pay an unmerited premium for their phone, mp3 player, and computer.

    If you say it enough, maybe it’ll be true. This is good if it keeps Apple competitors deluding themselves about why Apple is kicking their butt, and as long as consumers don’t fall for it.

  4. Apple’s competitors, namely Nokia, should be thrilled with this news. They’ve been trying to get Americans to spend more for higher powered phones for years now. Frankly, Apple is paving the way for Nokia and Symbian to make a re-entry in North America.

    Soon the world won’t be able to laugh and snicker at our cell phone market. We would’ve caught up eventually, smartphone adoption was on the rise. But NOBODY could’ve accelerated feature phone growth in NA the way Apple did. N-O-B-O-D-Y.

  5. If you make must-have products that no one else can produce, customers will pay for them. That’s amazing, isn’t it?

    Macs are the only computers with Mac OS X instead of Windows Vista. iPods are the only media players with a touch wheel (or multi-touch screen) interface and direct access to iTunes. And conversely, the iTunes Store is the only digital media service with direct access to iPods. Now, iPhone is the one-of-a kind product for the mobile phone market. Apple’s strategy is to make great products that its competition cannot duplicate easily or ever. Apple does not play the “me to” game, and in effect, competes by choosing NOT to compete.

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