Further Indications of Cellular Saturation

RCR is reporting that cell phone sales have dropped sharply in the first quarter. Considering the sate of the economy right now, frivolous upgrades like to an iPhone or Blackberry curve has to be expected. Why spend the dollars when the handset you have is working fine and you are satisfied with the carrier? —

Cellphone sales in the United States declined abruptly in the first quarter of the year, the first time since The NPD Group began tracking handsets, the firm wrote in a new report. The quarter saw a 22% decline in sales year-over-year, reaching just shy of 31 million units and sales of $2.7 billion, down from $2.9 billion a year ago.

The 7% drop in sales revenues came soon after the traditional holiday season rush, wrote Ross Rubin, director of industry analysis at the firm.

“Cellular phone service has become a practical necessity in modern life; however, with looming economic concerns on the horizon, many consumers may be holding back on new handset purchases, especially those tied to new prepaid plans,” he wrote.

Motorola Inc. nabbed a 27% share of units purchased during the quarter, maintaining its lead in the U.S. market. Samsung Electronics Co. Ltd. gleaned 18%, followed just barely by LG Electronics Co. Ltd. at 17%. Nokia Corp. and BlackBerry-maker Research In Motion Ltd. rounded out the remaining top five OEMs at 8% and 5%, respectively. RIM made the biggest move in the quarter, shoving Sanyo Electric Co. Ltd. out of the top five.

It will be interesting to see if there is a consumer ‘freeze’ once Verizon announces the services and handsets for the 700mhz band. A shift will occur at that point causing cannibalization of the current cellular market. It is going to be fun to watch folks!!

Linky.