Market researcher The NPD Group says the percentage of smartphones sold among all handsets in the US has grown from 13 per cent in Q3 2010 up to 59 per cent in this year's third quarter.
Across four quarters running smartphone prices have fallen and the average device for Q3 was priced at $135, according to the report.
The NPD's Smartphone Track service says the price cuts are happening despite consumers that are willing to pay between $200 to $250, which saw 64 per cent end up paying less than $200.
Apple continues domination followed by Android as the top five best-selling Q3 handsets includes:
1. Apple iPhone 4
2. Apple iPhone 3GS
3. HTC EVO 4G
4. Motorola Droid 3
5. Samsung Intensity II