Sales of mobile phones in the United States fell by almost a quarter during the first three months of the year as Americans tried to cope with collapsing house prices and the deteriorating credit crisis. A report by Sanford Bernstein, the Wall Street broker, says that new sales of mobiles fell by 23 per cent, marking the first slowdown in years.

Craig Moffett, a telecoms analyst for Sanford Bernstein, said that he expected declines in phone sales to continue despite the $150 billion (£76 billion) tax rebate last month, devised by Washington to spur consumer spending. The findings confirm fears among Wall Street economists, who expect a large dip in consumer confidence to have a huge impact on retail sales over the next two years.

Ian Shepherdson, chief US economist for High Frequency Economics, said: “Mobile phones are, on the whole, a discretionary spend item. None of us really need to upgrade to a better model. The outlook for retail sales in the US is horrible. We expect it to be extraordinarily weak for the foreseeable future, and by that I mean definitely this year and probably next. We have not hit the bottom yet.”

The report said that the slowdown in new mobile phone sales had hit wireless revenue growth at Verizon, the mobile phone group in which Vodafone holds a 45 per cent stake. Verizon’s revenue growth has fallen from 17.1 per cent in the second quarter of 2007 to 14 per cent for this year’s first quarter. Sanford Bernstein expects growth to continue to slide to as low as 5.1 per cent in the first three months of 2010. Mr Moffett forecast that revenue growth for AT&T had peaked and was set to slide by as much as 50 per cent.

The analyst said that growth was slowing most rapidly among customers with low incomes and children: “It is reasonable to think that in a weak economy, both of these populations would be strapped.”

The slide in mobile phone sales has been driven by the use of pay-as-you-go phones in households with incomes of $75,000 to $99,000 (£38,000 to £50,000).

The data is a blow to Motorola, the biggest mobile phone handset maker in the United States, which is also particularly exposed to the lower end of the market. During the first quarter, handset sales at Motorola fell 39 per cent globally, with the US, which makes up half of its business, blamed for most of it.

At the end of the first quarter, Motorola controlled about a quarter of the American mobile handset market, compared with 34 per cent at the end of the first quarter of 2006, according to Strategy Analytics. Over the same period, Samsung boosted its share to 22 per cent while LG rose to 21 per cent.

Elsewhere, Symbian, the mobile software group, reported a sharp slowdown in growth, with shipments up only 17 per cent to 18.5 million units in the three months to March 31 against a growth rate of more than 50 per cent in previous quarters.

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