The Motorola RAZR’s reign at the top has finally come to an end. After three years of being the highest selling handset, it has now ceded the top spot to the iPhone according to data from NPD.

The RAZR had been the highest selling phone over the past 12 quarters, but during the third quarter of this year, it moved down to number 2 as the iPhone moved into the top spot.

Ross Rubin, an industry analyst from NPD, had this to say:

“The displacement of the RAZR by the iPhone 3G represents a watershed shift in handset design from fashion to fashionable functionality. Four of the five best-selling handsets in the third quarter were optimized for messaging and other advanced Internet features.”

The top selling phones during the third quarter of 2008 are as follows:

1. iPhone 3G

2. Motorola RAZR

3. Blackberry Curve

4. LG Rumor

5. LG enV2