J.D. Power and Associates Reports:
Rising Popularity of Smartphone Devices Drives Higher Wireless Mobile Phone Prices
Sony Ericsson Ranks Highest among Wireless Mobile Phone Manufacturers for a Second Consecutive Time
WESTLAKE VILLAGE, Calif.: 29 May 2008 — The average reported purchase price for wireless mobile phones is now $9 higher than reported in 2007, according to the J.D. Power and Associates 2008 U.S. Wireless Mobile Phone Evaluation StudySM—Volume 1 released today.
The study finds that the average reported purchase price for a wireless handset has increased substantially for the first time in two years. The average purchase price cited by customers for a mobile phone is $101—up $9 from just six months ago—and marks the highest average price paid for a wireless device since the study’s inception in 2003.
The increase in the average purchase price can be partially attributed to the recent surge in popularity of smartphone devices, such as the RIM Blackberry, Palm Treo and recently introduced Apple iPhone, as well as music-enabled handsets, both of which typically have higher price points when first offered. The current average reported purchase price for smartphone devices is $208, much higher than the average price paid ($58) for phones with fewer features.
“As more customers start to upgrade to mobile phones that offer real-time connectivity and access to Internet content—particularly those offered by smartphone devices—we should continue to see the wireless handset price point rise,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. “Sales of smartphone devices have increased considerably over the past year to 6.3 percent from 1.7 percent in overall market share at the beginning of 2007.”
The study also finds that another influence on the rise of the average mobile phone purchase price is a sudden decrease in the number of wireless customers who say they receive their current phone for free. The percentage of customers who say they received a free handset has decreased from 36 percent to 33 percent during the past six months.
“Although 2008 marks the first time since the inception of the study that customers report a decline in the receipt of free handsets, this is not unexpected, given the increase in the popularity of smartphones, which have a much higher price point and tend to be discounted less frequently by wireless carriers,” said Parsons.
The study measures customer satisfaction with wireless handsets by examining five key factors. In order of importance, they are: physical design (24%); operation (22%); features (20%); handset durability (19%); and battery function (15%).
Sony Ericsson ranks highest in overall wireless customer satisfaction for a second consecutive time with a score of 740 points on a 1,000-point scale, performing particularly well in all factors. LG (721) also ranks above the industry average.
The study also finds several key wireless handset usage patterns:
* Seventy-four percent of all cell phones have a clamshell design—an increase of 24 percent from 2006. This compares to 21 percent for the candy-bar style and 5 percent for the slide-cover design.
* The average reported length of cell phone ownership is 17.7 months—an increase from 16.6 months in 2006.
* The most frequently reported reasons customers select their current cell phone include: pleasing design style (41%); received for free (25%); easy to use (23%); discounted/reduced price (21%); digital camera features (18%); variety of features offered and small size (17%).
Volume 1 of the 2008 U.S. Wireless Mobile Phone Evaluation Study is based on experiences reported by 18,093 wireless users who have owned their current mobile phone for less than two years. The results are from the two most recent study reporting waves, which were conducted in September 2007 and January 2008. Visit JDPower.com to view customer satisfaction ratings for wireless service and carrier performance, call quality, customer care, retail sales and mobile phone handsets.