Blog Post

Verizon iPhone Helps U.S. Become a Smartphone Majority

Verizon iPhone 4Apple (s aapl) is the third-largest mobile phone maker in the U.S., behind only Samsung and LG, according to research presented today by The NPD Group. Apple’s sales reached 14 percent of the overall U.S. market in the first quarter of 2011, leapfrogging past HTC and Motorola (s mmi), both of which it trailed in the previous quarter. NPD analyst Ross Rubin thinks the Verizon (s vz) iPhone is the reason for Apple’s strong showing.

“Apple and Verizon had a very successful launch of the iPhone 4, which allowed the iPhone to expand its market share that was previously held back by its prolonged carrier exclusivity with AT&T,” according to Rubin in a statement released by NPD. The boost provided by Verizon also helped the iPhone 4 secure its place as the top-selling mobile phone in the U.S. It’s followed by the iPhone 3GS, now sold at a discount from its original price tag. Combined, both devices helped iOS climb 9 percentage points to represent 28 percent of total sales. Android (s goog) lost ground for the first time since 2009, slipping 3 percentage points to 50 percent of smartphone sales during the quarter.

Smartphones overall had a strong quarter, though, as they represented a majority of all new U.S. mobile phone sales for the first time, with 54 percent of total purchases. That increase accounted for an overall rise in the average selling price of all mobile phones, but the average cost of smartphones paid by customers actually dropped by 3 percent (to $145). Greater demand for smartphones combined with falling prices is good news for manufacturers, who can move more product; carriers, who can reap the benefits of the higher data chargers typically incurred by smartphones; developers, who can reach a broader audience with smartphone apps; and consumers, who get a lower cost-of-entry for smartphone ownership.

The news that smartphones continue to grow in popularity among consumers is good for all device manufacturers, but the Verizon iPhone’s effect thus far shows that Apple still has plenty of room for growth. The real test of exactly how far Apple can extend the iPhone’s reach will come when, as Verizon CFO Fran Shammo put it, “a new device from Apple is launched, whenever that may be, and that we will be, on the first time, on equal footing with our competitors on a new phone hitting the market.”