The IPhone wins US popularity contest

The Apple iPhone has become the most popular handset in the US, according to new industry research.

The Apple iPhone has become the most popular handset in the US, overtaking the Motorola Razr and the Blackberry Curve, according to new industry research. The device, which is yet to be legally distributed anywhere in the Middle East, was named the US market leader for the third quarter of the year by the NDP Group, a market research firm. "The displacement of the Razr by the iPhone 3G represents a watershed shift in handset design from fashion to fashionable functionality," said Ross Rubin, the director of industry analysis for NPD. "Four of the five best-selling handsets in the third quarter were optimized for messaging and other advanced internet features."

The Motorola Razr, a cheap, sleek device that has been hugely successful among young people, had led the market in every quarter since mid-2004. The popularity of the iPhone, which costs more than three times the market's average unit sale price of US$88 (Dh323), demonstrated that mobile users were willing to invest more in devices that delivered advanced functionalities such as internet browsing and e-mail, analysts said.

Despite a broad economic slowdown, where mobile sales fell by an estimated 15 per cent, Apple had their strongest quarter, with 6.8 million units sold - more than the combined sales of all previous quarters. Steve Jobs, Apple's chairman, said in an earnings call that Apple was now the world's third-largest mobile maker by revenue, ahead of long-established players such as Sony Ericsson and Motorola. He also said the company was well positioned to grow in an economic downturn.

"We have almost $25 billion safely in the bank and zero debt. This provides us tremendous stability and the ability to invest our way through this downturn," he said. "This is what we did during the last downturn. We increased R and D investments and created some of our best new products and businesses... This downturn may also present some extraordinary opportunities for companies that have the cash to take advantage of them, like Apple does."

The company operates on a business model that restricts distribution of the iPhone only to countries where it has formed specific agreements with mobile network operators. It is yet to be available anywhere in the Middle East. Egypt, Qatar and Jordan will probably get the device soon through the local operations of the global networks Vodafone and Orange, both of which have made agreements with Apple.

Although both Etisalat and du have been reported to be in contact with Apple regarding the device, both companies have denied any agreement is forthcoming, and have referred questions to the Telecommunications Regulatory Authority (TRA). The TRA restricts operators from signing exclusive handset distribution deals, but has said it "leaves it to the licensed operators to feel free to engage in any negotiations related to the iPhone".