The iPhone 3G has unseated the undisputed champion of U.S. cell phone sales, Motorola's RAZR, during the third quarter of 2008, ending Motorola's 12 quarter (three year) reign on the title. NPD announced the quarter's top five handset models for the September quarter on Monday, ranking Apple ahead of the RAZR, the Blackberry Curve, and every other cell phone model on the market.

"The displacement of the RAZR by the iPhone 3G represents a watershed shift in handset design from fashion to fashionable functionality," Ross Rubin, director of industry analysis for NPD, said in a statement. "Four of the five best-selling handsets in the third quarter were optimized for messaging and other advanced Internet features."

RIM's Blackberry Curve was the #3 handset, followed by the LG Rumor at #4 and the LG en at #5.

Note that this ranking is for the broad market of cell phones in general, and not the narrower category of "smartphones," which Apple also leads. While the smartphone market tends to center around features such as Web browsing and e-mail access, NPD said that the consumer market most values having a camera (43% of handset buyers) and the ability to send and receive text messages (36%).

Other tidbits announced by NPD include the fact that some 30% of handsets sold in the September quarter of 2008 had a QWERTY keyboard, up from only 11% during the year ago quarter. 83% were Bluetooth enabled (up from 72% last year), and 68% were music-enabled (up from 49% in the year ago quarter).

NPD's methodology is to compile and analyze mobile device sales data based on more than 150,000 completed online consumer research surveys each month. According to the company, surveys are based on a nationally balanced and demographically representative sample of U.S. adults. Results are projected to represent the entire population of U.S. consumers age 18 and older.