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Smartphone Prices Fall

Nowadays, everyone wants a smartphone. Why? The going assumption is that Apple?? iPhone?? has reinvigorated the smartphone market. Everyone wants an iPhone in order to look cool, and to be able to surf the Web and answer e-mails. That?? certainly true.

But there is also another reason why U.S. consumers snapped up 9 million smartphones between January and July ?that’s up 84% year over year, according to consultancy NPD Group. Simply put, smartphones are getting cheaper.

The average price of a smartphone declined from $199 a year ago to $185 in the period between January and July, according to NPD. That’s quite a steep drop. And my bet is, the average smartphone price has plummeted further since iPhone 3G’s introduction. Since the new phone is subsidized by AT&T, it sells for $200 and $300, depending on storage offered. That’s half of last year’s price, which had been reflected in NPD’s numbers. Clearly, smartphones are getting a lot more affordable, and that could be a big reason behind their massive uptake.

Steve Ballmer, Power Forward
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