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NEW YORK—It
took a computer maker and a pager company to convince
Americans a mobile phone is worth paying for, and now
shoppers are splurging.
US
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 US buyers.
“The
iPhone has made the
US
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 US,
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 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 December 1, while sales
almost doubled to $1.65 billion, analysts in a Bloomberg
survey estimated.
Shares of
Waterloo, Ontario-based Research In Motion and Cupertino,
California-based Apple have more than doubled this year
amid the jump in demand for so-called smart phones.
North
America is the only region where the average phone price
will increase this year, said Milanesi. Last year mobile
handsets sold in Japan cost 74 percent more than in North
America. In Europe they were 10 percent pricier.
While
consumers in parts of Europe and Asia for years have spent
hundreds of dollars on phones from Nokia and Sony
Ericsson, only “extraordinary’’ devices have fetched such
prices in the US, said analyst Roger Entner of IAG
Research in New York.
The iPhone,
which doubles as a music player, cost as much as $599 when
it went on sale in June and now sells for $399. Apple
shipped 1.4 million of them in the first three months.
BlackBerrys go for as much as $300.
US
carriers have used subsidies to keep prices of most other
phones down. Motorola Inc.’s Razr, which sold for as much
$500 when introduced in 2004, can now be had free.
Subsidies
have made it difficult for phone makers to sell directly
to consumers and made carriers the gatekeepers, deciding
which phones to offer.
“Carriers
cheapened the device in the eyes of the consumer,’’ said
Entner.“ That will change if manufacturers can keep coming
up with really, really cool devices.’’
For Steve
Rogalski, a real-estate broker in Westchester County, New
York, that change came in June. Having never spent more
than $100 on a phone, he shelled out $599 for an iPhone,
which he also uses as a map tool and a camera.
“I waited
until the right device came along,’’ said Rogalski, 61.
“No other phone’’ ever made him want to spend that much.
Rivals to
the iPhone and BlackBerry still need to prove they’re up
to the challenge. Apple benefits from a loyal following
for its iPod music players and Macintosh personal
computers, which sell at a premium compared with rival
products.
Research
In Motion won over bankers and lawyers with its reliable
e-mail pager before branching into phones with video and
music players for the consumer market in the past year.
“In the US
there are very few phones that are status symbols,’” said
IAG’s Entner. Even as demand increases, the handset needs
to be “really, really attractive’’ to succeed.
Encouraged
by the iPhone’s success, Nokia, Motorola, Samsung
Electronics Co. and Sony Ericsson will push higher-end
phones on Americans, said Barry Gilbert, a vice president
at researcher Strategy Analytics in Boston. They may open
more stores to reach consumers directly, instead of
relying on the carriers, which don’t always offer the top
models.
Nokia, the
largest mobile-phone maker globally with almost 40 percent
of the market, ranks fourth in the
US.
Sony Ericsson, fourth in worldwide sales, doesn’t even
crack the US top five. The company is a joint venture of
Sony Corp. and
Ericsson
AB.
Nokia is
seeing signs of change, spokesman Keith Nowak said.
Customers lined up outside its flagship store in
Manhattan
to buy the $699 N95 camera and navigation phone this year.
The company, based in Espoo, Finland, also has an outlet
in Chicago.
“People
are willing to pay,’’ said Nowak, who is based in White
Plains, New York. “The interest has been shifting to what
these devices can do.’’ (With reporting by Crayton
Harrison in New York and Juho Erkheikki in Helsinki) | 
