Smartphone sales in U.S. up 68 percent in 2008, iPhone sales up 101 percent
Riding an explosion in smartphone sales growth in 2008, Apple’s iPhone sales grew 101 percent from 2007, but the twin dampers of the economy and a maturing market will slow growth in 2009.

According to IDC data reported in RCR Wireless, the iPhone was No. 6 among all mobile phone vendors in the United States with 4 percent of the total market.
Apple fared better in the smartphone-specific data, with its 21 percent share of that market second only to RIM’s still-dominant 46 percent.
Of course, Apple’s 101 percent year-over-year growth is not really a fair comparison; the original iPhone was on sale for just the latter half of 2007.
Nevertheless, Apple did meet both of its goals for iPhones sales in 2008. The total of 13.7 million units sold exceeded Apple’s goal of 10 million set when the product launched.
And, using IDC’s total of 1.181 billion phones shipped in 2008, that 13.7 million figure equals 1.16 percent of the global mobile phone market, exceeding Apple’s goal of 1 percent of the total market. This closely matches a similar report on mobile phone market share from ABI Research last week.
Looking ahead to 2009, IDC senior research analyst Ramon Llamas predicts a “challenging” first half “as vendors and distributors grapple with clearing inventory.”
But the smartphone market in which the iPhone competes should fare a bit better: “As long as operators are able to continue to subsidize these devices, and developers continue to enhance applications, then this segment will be a silver lining to an otherwise gloomy market,” said IDC senior research analyst Ryan Reith.
IDC forecasts a U.S. smart phone growth rate of between 4 and 5 percent for 2009, a far cry from last year’s 68 percent growth.
“Carriers are now making more money from data attachment rates than from new subscribers,” Reith said. “It’s a mature market.”
To maintain the iPhone’s marketing momentum, Apple will need to come up with some unusually compelling updates this year.
Analyst Peter Misek of Canaccord Adams thinks Apple may have three new variations of the iPhone in the pipeline for 2009: a 32 gigabyte iPhone in multiple colors; a cheaper iPhone based on the 2.5G technology and targeted to customers in China and India; and finally, a version of the 3G iPhone shrunk to a third of the size of the current model (the much-rumored “iPhone Nano”) that could cost as little as $99.
I still have my doubts about the iPhone Nano – the necessarily much smaller screen would negate the size and price advantages in my view – but the other two possibilities seem plausible.
And Apple being Apple, whatever new iPhones do appear this year probably will confound all predictions anyway.



Comments
Hi David,
I'm curious to know if you agree with Ryan Reith on it being a mature market.
From what I can see and others suggest, Apple has done a Nintendo and opened up the market.
Smart phones have been the domain of business. Now through the iPhone they are the domain of the prosumer.
Perhaps the business market has matured. But compared it is a tiny slice of the broader consumer market.
I agree with you on the iPhone Nano. seems like a pointless thing that would be damaging to the AppStore (which Apple has said benefits from one display size, and obviously does)
The nano notion is a price notion, not really a size one. The next version of the iPhone at $199 with the current 3G at $99, now that is a nano and lets Apple leverage their production lines effectively, while giving a 2nd or 3rd year (developing countries) to each iteration of their product.
Apple is also clearly stepping out one stage at a time, with each stage being a year cycle. It is fair to assume that in June 09 we will get to see the next stage.
Posted by: cy starkman | February 8, 2009 4:50 AM
I find it highly unlikely that apple won't come out with a fast iPhone. Not data wise cause AT&T is the crippling effect there,but processor wise. The 3g iphone was to pull new customers. The next addition is to pull back those same customers. As the owner of the original 2.5g iPhone I want internal hardware upgrades. And I have my two year contract coming to an end. Wishing for an upgrade in processor and graphics speed.
Posted by: Jrb | February 8, 2009 5:12 AM
@cy
Reith also said in the RCR Wireless article that "68 percent growth is not sustainable" in the smartphone market. I think a lot of the early adopters now have smartphones and most other consumers will get them sooner or later. They won't buy in as brief a time frame as the early adopters, though. And despite the potential, the bad economy is further slowing down the natural growth rate.
Of course, with Apple there's one more wild card -- the iPod Touch, which is part of Apple's mobile platform but not counted in mobile phone sales.
Posted by: Dave Zeiler | February 8, 2009 1:53 PM