Motorola's fall from grace started when they couldn't come up with a serious successor to the megapopular original Razr, so it's kind of sad to see that right up until their Android renaissance—and maybe even through it—the Razr, now in version 3, is still a core part of their business. But there's a broader point here, about how people use their phones: there are still plenty of folks lingering in the dull, barely-connected land of the dumbphone, where LG appears to be King, but they're emigrating in droves, because they crave one thing: internet:

Smart, dumb, whatever: today, phones are for going online. Which, if you believe Nielson's scores, means phones—especially smartphone—are pretty much for Google. Now, get your pencils out, and let's draw a straight line between Google's dominance on the mobile web and the mysterious but very real Nexus One. Easy, wasn't it? [Nielson]

[I personally don't know anyone who bought a RAZR, but they are carried on every US carrier. Just goes to show how disconnected gadget heads are from the rest of the world in their tastes. —B.Lam]

The NPD Group: iPhone 3G Leads U.S. Consumer Mobile Phone Purchases in the Third Quarter of 2008

Overall consumer mobile phone purchases declined 15 percent year-over-year

PORT WASHINGTON, NEW YORK, NOVEMBER 10, 2008 – According to The NPD Group, the leader in market research for the wireless industry, Apple’s iPhone 3G surpassed the Motorola RAZR as the leading handset purchased by adult consumers in the U.S. in the third quarter (Q3) of 2008. RAZR had been ranked by NPD as the top-selling consumer handset for the past 12 quarters.

Even with stronger consumer sales of iPhone, and the mobile phone market’s normal seasonal uplift after Q2, domestic handset purchases by adult consumers declined 15 percent year over year in Q3 to 32 million units. Consumer handset sales revenue fell 10 percent to $2.9 billion, even as the average selling price (ASP) rose 6 percent to $88.

Top-selling handsets and mobile phone brands

“The displacement of the RAZR by the iPhone 3G represents a watershed shift in handset design from fashion to fashionable functionality,” said Ross Rubin, 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 top handset models in rank order, based on unit sales in Q3, were as follows:

1.Apple iPhone 3G
2.Motorola RAZR V3 (all models)
3.RIM Blackberry Curve (all models)
4.LG Rumor
5.LG enV2

Popular features

When it comes to the specific features that motivated U.S. consumers to purchase their handsets, 43 percent of handset buyers cited the need for a camera and 36 percent noted the ability to send and receive text messages. Mobile phones with a QWERTY keyboard experienced the greatest year-over-year rise in sales; 30 percent of handsets were sold with this feature in Q3 2008, versus just 11 percent the year prior. Also this quarter 83 percent of phones purchased were Bluetooth enabled (versus 72 percent last year), and 68 percent of phones purchased in Q3 were music enabled (versus 49 percent last year).

“A growing data divide continues in cellular handsets,” Rubin said. “Those who see the value in wireless Internet access are justifying the investment, whereas voice-centric users have little incentive to upgrade, which is obviously detrimental to operators who seek to sell data plans and media-access services to their subscribers.”

Methodology: NPD compiles and analyzes mobile device sales data based on more than 150,000 completed online consumer research surveys each month. Surveys are based on a nationally balanced and demographically representative sample of U.S. adults. Results are projected to represent the entire population of U.S. consumers age 18 and older.

It's early, but Apple is certainly off to a strong start. As we mentioned earlier, Bloomberg reported that 500,000 to 700,000 iPhones were estimated sold over the weekend, at $500 to $600 apiece. Motorola by contrast took much longer—the final three months of 2004—to sell 750,000 RAZRs. The GSM RAZR sold by Cingular, you'll recall, cost $500 at launch.

Forecasts for 2005 RAZR sales were initially conservative, but a sudden desire to get aggressive sparked the move to push RAZR hard: Instead of building 2 million in 2005, it would build 20 million. The trajectory was set, the marketing masterwork was staged. RAZR sold 5 million units in the second quarter of 2005, 12 million in the third quarter, and by July 2006, two years after its unveiling, 50 million had been sold.

Jobs has set much lower goals for the iPhone: He wants to sell 10 million in 18 months. While this may represent the fine art of underpromising and overdelivering, there are good reasons for aiming significantly lower than Motorola.

• For one thing, the iPhone is exclusive to one carrier (AT&T) and one technology (GSM), whereas the RAZR was eventually sold by every carrier on both GSM and CDMA networks. Without Sprint and Verizon Wireless, the iPhone reaches less than half of its potential US customers.

• Motorola's sales were worldwide, while the iPhone is currently only sold in the US. Although there is buzz that Vodafone is vying to carry the iPhone throughout Europe, no plans have been announced.

• In addition, iPhone falls into the "smartphone" category in many people's opinion, and the market for smartphones is significantly smaller than the market for, well, dumb phones. Besides, corporations dominate the smartphone business, and the iPhone is not even sold through AT&T's business division.

Iconic branding and aggressive sales speculation aside, there is a strange kinship between Apple's objet du moment and Moto's has-been superstar. It was Jobs who inspired Ed Zander when he planned a full-fanfare keynote RAZR unveiling in Chicago in July 2004. We all know the story of the subsequent, ill-fated partnership between Jobs and Zander—iTunes ROKR RIP—but even after that divorce, the eerie links continue.

Just compare the two phones. The RAZR changed the position of side keys and leveled the traditionally exposed keypad, to some criticism; the iPhone eliminated the keypad all together, to similar skepticism. Motorola chose glass for its exposed RAZR screen and strong anodized aluminum for the body; the iPhone designers made similar choices for style and durability. In a radical move, Motorola engineers put the phone's antenna on the bottom, below the mouthpiece. Where's the iPhone antenna? Yep, same spot.

Additional Sources:
RAZR'S Edge [Fortune]
Apple's music biz, iPod share grows [MacNN]
Motorola Ships 50 Millionth MOTORAZR [Geekzone]