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The market for the smartphone—in reality a handheld computer for Web browsing, e-mail, music, and video that was integrated with a cellular telephone—continued to grow in 2008.According to research firm Gartner, in the second quarter, worldwide smartphone unit sales increased at a rate of 15.7% year-on-year.The fastest-growing market was North America, with 78.7% sales growth. The rise in sales was fueled in part by Apple's introduction in July of the i Phone 3G (the 3G referred to third-generation wireless networks, which sent and retrieved data more rapidly).The i Phone 3G was in high demand; one million i Phone 3Gs were purchased during its first three days on the market.There were early technical problems, which included dropped calls and poor connections, but it was unclear whether the problems were primarily the responsibility of Apple or of AT&T, the only American network on which the i Phone could be used.The i Phone and a similar device, called i Pod Touch, created a new market for third-party applications software, such as games, that could be downloaded from Apple's online App Store.

The G1 was initially available only from T-Mobile in Europe and in the U.S., where it initially cost $179 with a two-year cell-phone contract, slightly less than the i Phone.The popularity of smartphones was aided by another technological trend in the United States: more Americans than ever before were giving up their traditional landline telephones for cellular telephones.In a survey of Internet users by Jupiter Research, 12% said that they did not subscribe to a landline-telephone service, and another 12% said that they planned to switch from a landline to a cellular telephone in the next year.

Another study, by market researcher Nielsen, said that 17% of all American homes relied exclusively on cellular telephones rather than landline telephones.

While the cellular telephone networks continued to serve a growing demand for data, short-range Wi-Fi (wireless fidelity) found in homes, hotels, restaurants, airports, and other public places continued to spread as a common wireless alternative for Internet access.