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Anticipation for iPhone 4S Caused Smartphone Sales to Slide?



In the prior quarter, sales of smartphones experienced a recession on their own as it is speculated that the decline in smartphone sales in the U.S. may be the result of consumer anticipation of Apple’s iPhone 4S. Not only was there a dip in iPhone sales, as was found in data obtained from Verizon Wireless and AT&T, the two sole iPhone carriers at the time, but sales of phones running on rival platforms, such as Windows Phone 7, BlackBerry, and Android, also slipped as well. The reason may be that high-end smartphone consumers were awaiting for Apple’s iPhone announcement before making a buying decision.

The dip, however, appears only temporary as Apple has announced that the iPhone 4S is the company’s best selling smartphone ever, beating out sales of the iPhone 4 over a year ago when that model launched. Carriers noted that they ran out of pre-order inventory and were sold out on the first day of launch despite some customers feeling dissatisfied that the iPhone 4S isn’t a revolutionary evolution from its predecessor, but rather only brought forth modest improvements.

However, given that the slow down in sales affected iOS’s major rival Android as well, it may not be a positive sign as there were a number of high profile, high end Android handsets that launched this past summer, including Sprint’s EVO 3D, Photon 4G, and Galaxy S II Epic 4G Touc as well as Verizon’s Droid Bionic.

Morgan Keegan analyst Tim McCourt says that adoption of high-end smartphone is very saturated in the U.S. market right now, with 45% of customers on AT&T and Verizon Wireless already on a smartphone plan. Carriers are now experimenting with data plan pricing to make it even more affordable for customers to jump from a feature phone to a smartphone, though some of the pricing may be deceptive. For example, it is speculated that AT&T had abandoned its $30 per month unlimited smartphone data pricing in favor of a tiered model to give a very limited 200 MB plan at an entry price of $15 per month, or half of what it costs to half unlimited data. While the price of entry is lower, consumers may not understand that they may rack up a lot of overage data charges if they use all the power of their smartphones to consumer media, including browsing the web, streaming video, uploading content to YouTube, and downloading apps on their carrier’s mobile broadband connection.

Historically though, Ovum chief telecoms analyst Jan Dawsom says that McCourt may be reading too much in between the lines as there is a trend where sales dip slightly between Q2 and Q3. Smartphone sales peak during the holiday shopping season in Q4 and also in Q2.

Via: PC Mag


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