The correct answer is (B):
This question is slightly dubious. Though the official answer is 3, it is statement 1 that should be the right answer. We can start with statement 3, and continue the idea with statement 5. Statement 2 takes over from 5, with statement 4 coming at the end. Thus 3524 form a coherent paragraph, leaving 1 as the odd one out.
Statement 3 speaks of the things that are likely to disturb sleep. Statement 5 adds one more threat- smartphones. Statement 2 gives a name to that threat, while 4 adds some more information as to why such apps have found a market.
Statement 1 should be the odd one out. However, surprisingly, the official answer given by CAT is 3.