Smart phone sales get smarter

Sales of smart phones have been hurt by the economy, at least according to industry research. The handsets, which function as small, de facto PCs, are expensive and often have costly subscription plans. Earning results from RIM (RIMM) showed that business use of the devices is still fairly strong, but that leaves the consumer handset market where overall consumer spending could cause an ongoing slump in the purchase of consumer electronics.

One of the world's largest smart phone companies, HTC, is not well known in the U.S. Several HTC products use the new Google (GOOG) Android handset operating system. The Wall Street Journal says the company "sees signs that the global smart-phone market is reviving after a relatively weak first quarter."


The news should be encouraging to Nokia (NOK) and Sony Ericsson, both of which have come to rely more and more on higher end handsets. Nokia has been insisting that global cellphone sales will drop this year. If so, it would be a sign of strength for the companies' earnings that their most expensive, and, presumably, highest margin products may do well.

It would be ironic if, in a recession, the most expensive handsets continue to do well; perhaps a sign that spending by the more affluent consumers is not dead?

Douglas A. McIntyre is an editor at 24/7 Wall St.


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