Smartphones Now a Must-Have

The smartphone is clearly now on the consumer must-have list with milk, bread, gas and Internet access, even when a national recession continues.

While new research indicates a slowing in the cell phone market, the meteroic growth of the smartphone continues despite the fact vendors haven't really cut prices, offered any spectacular deals and data plans haven't changed much in terms of cost.

Gartner, a technology research firm, released a report showing that worldwide mobile device sales have dipped about 6 percent while smartphone growth expanded 27 percent just in the second quarter of this year, representing the fastest-growing market segment. Sales for the quarter exceeded 40 million units.

"Despite the challenging market, some devices sold well as consumers who would usually have purchased standard mid-range devices either cut back to less expensive handsets or moved up the range to get more features for their money," said Carolina Milanesi, Gartner research director. The report, "Competitive Landscape: Mobile Devices, Worldwide, 2Q09" is available on Gartner's site.

"Touchscreen and qwerty devices remained a major driver for replacement sales and benefited manufacturers with strong, touch-focused mid-tier devices. However, the decline in average selling price (ASP) accelerated in the first half of the year and particularly affected manufacturers that focus on midtier and low-end devices, where margins are already slim," noted Milanesi.

Nokia is still the worldwide mobile device leader, though the report noted the vendor has been pushing out cheaper priced gadgets this year after some high-end offerings, such as the N97, weren't received as well as expected (it sold just half a million devices). In comparison, Apple's newest iPhone, the 3G S, sold 1 million the first weekend after its debut in June.

Touchscreen technology is proving lucrative for Samsung and LG as the technology is cited by Gartner for the vendors' strong second quarters.

While struggling cell phone maker Motorola is still facing rough waters in the competitive marketplace, Gartner noted that its 15.9 million sales for the quarter was better than expected.

Moto's anticipated Android phones (the new open source platform which arrived with the first Google phone, the G1) should help the company's sales by year's end, said the research firm.

Photo courtesy of Nokia