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Oct. 8, 2008

Despite many reports of a poor 3G network experience and complaints that the iPhone isn't up to some users' expectations, Apple's new 3G handset is still gaining market share nevertheless.

In the period between June through August, about 31 percent of consumers in the U.S. who bought the new iPhone have actually switched from other mobile carriers to join AT&T.

In the United States, remember that AT&T is currently the exclusive distributor of the Apple iPhone.

A little over 46.7 percent of new AT&T iPhone customers who switched wireless carriers switched from Verizon Wireless. Another 24 percent switched from T-Mobile, and approximately 18.9 percent actually came from Sprint Nextel.

According to NPD's "iPhone 3G Report", this summer, and before the launch of the iPhone in late June, sales represented about 11 percent of the consumer market for smartphones, for the period between January through May 2008. But after the launch of Apple's iPhone 3G, the company commanded a 17.1 percent sahre of the smartphone market.

Ross Rubin, director of industry analysis for The NPD Group says "the launch of the lower-priced iPhone 3G was a real success to overall consumer smartphone sales. While the original iPhone also helped win customers for AT&T, the faster network speeds of the iPhone 3G have proven more appealing to customers that already had access to a 3G network. And that's even despite the negative comments from some users."

The average price of a smartphone sold between June and August 2008 was about $174, down 26.2 percent from $236 during the same period in 2007.

During June through August 2008, the top 4 best-selling smartphones based on unit sales to consumers were (in respectful order):

Apple iPhone 3G

Research In Motion BlackBerry Curve

Research In Motion BlackBerry Pearl

Palm Centro

Market observers still expect the iPhone to continue to gain in overall market share for the remainder of this year as well as for most of 2009.

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    This article was featured on Business 5.0 and on Tech Blog.

Source: NPD Research.