Smart phones getting smarter

The NPD Group released its quarterly run-down on the mobile phone industry. The research organization, known for its comprehensive consumer and retail information, looks at quarterly sales numbers and compares the findings to its own historical numbers.

There is definitely some salient info for investors looking at or in the mobile phone market:

• Smart phone are on fire: "the percentage of smartphones sold during the third quarter increased from 4% of all phone sales in the third quarter of 2006 to 11% during the same timeframe in 2007 – an increase of 163% year over year."
• Convergence of musical devices with phones: "Fifty percent of new phones were able to play music in the third quarter of 2007 (double the prior year) and 11 percent were smartphones."

"The mobile phone market is not only growing, it is growing smarter," said Ross Rubin, director of industry analysis for NPD. "The nearly threefold increase in smartphones shows that this once negligible niche is becoming a more influential force in the consumer market -- attracting entrants such as Apple, Inc. (Nasdaq: AAPL) and the Open Handset Alliance."

While Motorola, Inc. (NYSE: MOT) commanded the largest marketshare of the top 5 manufacturers at 31%, growth in the industry (47% year over year) is jacking up the competition. Apple has made a splash with the iPhone and its going to be interesting to see what route Google, Inc. (Nasdaq: GOOG) is going to take with its rumored gPhone. Read Sheldon Liber's good analysis of what Google may be planning to do with a mobile platform.

As the iPhone gets more traction, it will be interesting to see what NPD's analysis will look like in a year from now.

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Disclosure: He holds a position in GOOG but none in the other stocks mentioned.