Mobile phone sales in the US saw drop of almost a quarter from January to March 2008, representing a decline for the first time in years, says Sanford Bernstein.

The Wall Street Broker, Sanford Bernstein, said that mobile phone sales in the US dropped by about a quarter from January to March 2008, thus leading to a fall of 23% in the new sales of phones and marking a slump in years, as TimesOnline reported.

The Sanford Bernstein officials revealed that a decline in mobile industry of the country started from October 2007 as few plans were bought for kids and by customers who were badly hit by subprime meltdown. Also, in spite of a tax rebate of $150 Billion in April 2008, the growth in the market is expected to drop to 5.1% in Q1 2010.

According to industry experts, due to slow economic growth, the US consumers are constricting their budgets and this is leading to decline in the demand for mobile phones, especially from low income consumers and children. Also, rapidly increasing oil prices and home foreclosures are discouraging consumers from changing their handsets.

Sales of cheap phones are more affected by this slowdown as poor people are struggling with high cost of living and mortgage rates. Also, rapidly growing wireless market of the country is leading to a drop in the US mobile industry. Out of 10, about 8 US citizens own a mobile indicating maturation of the market. So the demand is declining.

Further, introduction of pay-as-you-go phones in the US households with income of about $75,000 to $99,000 is leading to fall in sales of mobiles in the country. Also, a decline can be witnessed in prepaid phone market as a large number of American families prefer plans, which include their children.

But the sales of feature-rich phones, such as smartphones, are witnessing growth in the market. Samrtphones offering Internet Services, Web surfing, music and e-mail accounted for a large part of total mobile sales in Q1 2008.

A Research Analyst RNCOS said “Mobile services have become a necessity in the US. However, a positive growth can be seen in industry due to the sales of new technology phones. Thus, mobile manufacturers should come up with handsets equipped with new and innovative technologies to attract the customers.”

Related Market Research Reports:
American Mobile Handset Market Analysis (2006-2009)
African Mobile Market Forecast (2007-2011)
Emerging Rural Mobile Market in India