Mobiles on the move as US goes up market

IT took a computer maker and a pager company to convince Americans a mobile phone is worth paying for, and now shoppers are splurging.

US customers shelled out 40 percent more for handsets last quarter than a year earlier, just as Apple Inc put its Web-browsing iPhone on sale and Research In Motion Ltd brought out BlackBerry e-mail phones with video features. Spending rose to a record and jumped the most since at least 2005, Bloomberg News reported.

Americans, previously hard-pressed to pay US$50 for a phone, are now more like their European and Asian counterparts and paying up to US$400 for the top devices. That will translate into higher sales for Apple and Research In Motion and may bolster rivals Nokia Oyj and Sony Ericsson Mobile Communications Ltd, which tried for years to promote camera and music phones to US buyers.

"The iPhone has made the US consumer appreciate the value of the mobile phone," said Carolina Milanesi, an analyst at Stamford, Connecticut-based Gartner Inc.

The trend will continue this holiday season, said analyst Ross Rubin at NPD Group, which collects retail data.

Sales of pricier handsets such as the iPhone almost tripled last quarter and made up 11 percent of phones sold in the US, the New York-based NPD said. Shoppers spent US$3.2 billion on phones, or US$83 each, up from US$2.2 billion a year earlier and the most since NPD's records began in 2005.

Investors will look for proof today that the pace held up over Thanksgiving when Research In Motion reports fiscal third quarter earnings. Net income probably doubled to US$351 million in the period to December 1 while sales almost doubled to US$1.65 billion, analysts in a Bloomberg survey estimated.

Shares of both Waterloo, Ontario-based Research In Motion and Cupertino, California-based Apple have more than doubled this year amid the jump in demand for so-called smart phones.

Steve Rogalski, a real estate broker in Westchester County, New York, had never spent more than US$100 on a phone but in June he shelled out US$599 for an iPhone, which he also uses as a map tool and a camera.

"I waited until the right device came along," said Rogalski, 61. No other phone ever made him want to spend that much.