The Apple (AAPL) iPhone and RIM (RIMM) Blackberry have been doing what Motorola (MOT) and Nokia (NOK) could not. They are driving handset sales to all-time records.

According to research firm NPD, US handset sales in Q3 had their largest increase and best quarter since the firm started keeping track in 2005. According to Bloomberg "U.S. 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."

Total handset sales hit $3.2 billion in the last quarter.

The data shows that Americans are willing to spend a dollar for a dollar of what they perceive to be value. The iPhone and Blackberry are among the most expensive handsets with prices often well above $300. Many of the phones from Nokia (NOK) and Motorola (MOT) are very cheap, often going for under $100 when consumers buy them with a callng plan.

The news must be particularly stinging for Motorola. It had the hot phone in the RAZR which had brisk sales two years ago. The US company could have come to market with a powerful e-mail based handset of a touchscreen like the one on the iPhone. But, it didn’t, and shareholders paid the price.

Motorola turned out to be a one trick pony.

There is another lesson in all of this RIMM now has the hot hand. The Blackberry is essentially the same product that it was two years ago. That may not be so good.

Douglas A. McIntyre

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