Maybe the iPhone didn't pass the Razr

3:48 PM, November 12, 2008

Apple made big news this week when a study by NPD Group suggested that the iPhone had surpassed the Razr as the top handset bought by U.S. adult consumers in the third quarter.

But Nielsen Mobile says it ain't so. The firm's Q3 2008 iPhone Executive Overview suggests that the iPhone had a 3% market share while Motorola's Razr had a 5% share. Why? Well, only 21% of people who thought about buying an iPhone in the first nine months of this year actually did. About half of people who thought about buying a Motorola phone did.

"This reflects the high degree of awareness and buzz around the iPhone, but AT&T's exclusive carriage of the device." Translation: Lots of people thought about getting the iPhone, but many balked at signing up for AT&T's service plan.

Comments readers left on our post on Monday confirm that AT&T's service is a concern, even for some current users. As Kage wrote:

I love the Iphone but really hate the AT&T service. Drops calls, call quality is horrible, signal strength is bad...and I live near a big city. If it were not for the phone I would have gone back to my old carrier a long time ago.

Additionally, about 43% of iPhone users pay more than $100 a month for their phone bill, according to Nielsen Mobile, according to Nielsen. Only 20% of subscribers across all wireless providers pay that much.

It makes you wonder: Did all that marketing and advertising around the iPhone make any difference? People talked about buying the iPhone, Nielsen Mobile says, but then they didn't.

Apple thinks it works: It spent $15 million to promote the iPhone in September. AT&T spent $21 million. And it seems like there's a new iPhone ad every week.

Maybe Apple should focus its advertising efforts on Nielsen Mobile, so the iPhone will be named the handset with top market share once and for all. Or it could make some investments in AT&T. Better service could boost the conversion rate even more.

-- Alana Semuels

Photo by g-monkey via Flickr