Consumer sales of smartphones in the U.S. represented 23 percent of all handset sales in Q4 2008, 11 percentage points more than in Q4 2007, according to the market research firm NPD Group.
Led by the release of Apple's iPhone 3G at $199, the average price for a smartphone fell 23 percent from $216 in Q4 2007 to $167 last year, according to the report.
Following the touchscreen iPhone 3G came the BlackBerry Storm on Verizon Wireless, the T-Mobile G1, and soon Palm Pre on Sprint in a feature-filled race to the bottom.
Half of all smartphones on the market now sell with touch screens, but 70 percent of all models offer QWERTY keyboards. (Keep in mind that the Google Android platform on the T-Mobile G1 and Palm's webOS will debut handsets that support both QWERTY and capacitive touch input.)
High-speed data plans are becoming more central to the smartphone experience, too: A full 66 percent of smartphones now use 3G networks, compared to just 46 percent a year ago. (AT&T is in the midst of constructing its 3G network, and T-Mobile's is underway.)
In line with falling prices and "the race to the bottom," manufacturers and retailers are looking for ways to bolster sales revenues. One option is to sell accessories to drive margins for retailers: 52 percent of smartphone buyers purchased an accessory at the time of their phone purchases, compared to just 41 percent among all other phone buyers.
"Palm, Apple, and HTC all over-index when it comes to accessory purchases at the time of the smartphone purchase," said Ross Rubin, NPD's director of industry analysis, in the firm's announcement. "Particularly with RIM’s large market share, resellers are apparently missing opportunities to sell more BlackBerry accessories."