Thursday, December 20, 2007

Mobile-Phone Spending in U.S. Sets Record on IPhone

It took a computer maker and a pager company to convince Americans a mobile phone is worth paying for, and now shoppers are splurging.

U.S. customers shelled out 40 percent more for handsets last quarter than a year earlier, just as Apple Inc. put its Web- browsing iPhone on sale and Research In Motion Ltd. brought out BlackBerry e-mail phones with video features. Spending rose to a record and jumped the most since at least 2005.

Americans, previously hard-pressed to pay $50 for a phone, are now more like their European and Asian counterparts and paying $300 to $400 for the top devices. That will translate into higher sales for Apple and Research In Motion and may bolster rivals Nokia Oyj and Sony Ericsson Mobile Communications Ltd., which tried for years to promote camera and music phones to U.S. buyers.

``The iPhone has made the U.S. consumer appreciate the value of the mobile phone,'' said Carolina Milanesi, an analyst at Stamford, Connecticut-based Gartner Inc.

The trend will continue this holiday season, said analyst Ross Rubin at NPD Group, which collects retail data.

Sales of pricier handsets such as the iPhone almost tripled last quarter and made up 11 percent of phones sold in the U.S., Port Washington, New York-based NPD said. Shoppers spent $3.2 billion on phones, or $83 each, up from $2.2 billion a year earlier and the most since NPD's records began in 2005.

Investors will look for proof today that the pace held up over Thanksgiving when Research In Motion reports fiscal third- quarter earnings. Net income probably doubled to $351 million in the period through Dec. 1, while sales almost doubled to $1.65 billion, analysts in a Bloomberg survey estimated.

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