Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Market sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Rapid growth behind, rapid growth ahead
- Soft spots in penetration among seniors
- Subsidies, style, new features drive sales
- Eyeing the competition: Wi-Fi phones, PMPs, GPS, Cameras and Laptops
- Style and cost most important to phone selection
- Online minorities more engaged with cell phones
- Cell phone technology seen as stylish
- Advertising and promotion
Fast Forward Trends
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- Always connected
- Big phones, little laptops convergence
- The end of retailing as we know it
Insights and Opportunities
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- Letting consumers experiment with smartphones
- Beta testing and data collection
- Apps and the clean interface
- Docking stations, the data phone, the phone that’s not a phone
- Medical/scientific widgets for seniors
Market Size and Forecast
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- New functions drive growth despite poor macroeconomic conditions
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- Figure 1: Total manufacturer sales of mobile phones, at current prices, 2002-12
- Figure 2: Total manufacturer sales of mobile phones, at inflation-adjusted prices, 2002-12
- Figure 3: Units sold by manufacturers and average selling price, 2001-08
Competitive Context
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- Overview
- Skype Wi-Fi phones
- Convergence phones
- MP3 players
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- Figure 4: MP3 player ownership, 2002-07
- Digital cameras
- Laptop
- PND (Personal Navigation Devices)
Segment Performance
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- Market transitions to smartphones
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- Figure 5: Sales of smartphones versus traditional phones, 2006 and 2008
Smartphones
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- Smartphones the market’s growth engine
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- Figure 6: Total manufacturer sales of smart mobile phones, at current prices, 2004-10
- Figure 7: Total manufacturer sales of smart mobile phones, at inflation-adjusted prices, 2004-10
- Carrier subsidies the driving engine behind smartphone sales
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- Figure 8: Mobile phone unit sales and average selling price, 2004-08
Traditional Phones
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- Sales of “dumb” phones on the decline
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- Figure 9: Total manufacturer sales of traditional mobile phones, at current prices, 2004-10
- Figure 10: Total manufacturer sales of traditional mobile phones, at inflation-adjusted prices, 2004-10
- Figure 11: Unit sales and average selling price of traditional mobile phones, 2004-08
Market Drivers
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- Overview
- Carrier subsidies keep mass interest in low-cost flip phones intact
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- Figure 12: Favorite styles of phone, by age, June 2008
- Premium phones driven by desire to utilize data and entertainment features
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- Figure 13: Use of and future interest in cell phone features, June 2008
- Camera and picture messaging most popular features
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- Figure 14: Additional services available and used on phones, by age, February 2007-March 2008
- Features trickle up from 12-24s into older segments
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- Figure 15: Phone features used in the last 30 days, by age, February 2007-March 2008
- Males aged 15-17 tend to be the most active users of advanced features
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- Figure 16: Phone features used by teens in the last 30 days, by gender/age, February 2007-March 2008
- Service contract expiration, lost phones, style drive phone purchases
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- Figure 17: Reasons for acquiring last cell phone, by age, June 2008
- Most consumers will wait until their contract ends to get a new phone
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- Figure 18: Action taken when last service contract expired, by age, June 2008
- Affluent more likely to get a new phone when contract expires
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- Figure 19: Expected action when current cell phone contract ends, by household income, June 2008
- Applications
- Google’s Android to drive global application development
- Open phone carrier systems
- 3G and D2D entertainment
- iPhone a driving force of smartphones in general
- Increased use of public transportation
- Interest in selling ads could increase subsidies of smartphones
Leading Companies
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- Motorola and LG ownership up, Nokia down
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- Figure 20: Trended cell phone brand ownership, June 2002-June 2007
- Brand equity from other CE segments
- Global unit shipments
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- Figure 21: Number of units shipped worldwide, by leading companies, 2006 and 2007
- Figure 22: Change in global share of shipments, by volume, Q1 2007 and Q2 2008
Brand Qualities
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- Key point
- Wide array of products, carrier distribution make branding difficult
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- Figure 23: Brand of cell phone owned, by age, February 2007-March 2008
- Figure 24: Penetration of leading handset manufacturers, by gender, race/Hispanic origin, and household income, February 2007-March 2008
- Awareness high, loyalty low
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- Figure 25: Brand familiarity, June 2008
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- Figure 26: Brand awareness, by age, June 2008
- It’s the phone, not the brand
- Nokia phones
- Samsung phones
- Motorola phones
- Apple phones
- BlackBerry phones
- LG phones
- Sony Ericsson phones
- Palm phones
- Sidekick phones
Advertising and Promotion
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- Key points
- Campaign themes
- Adspend
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- Figure 27: iPhone, BlackBerry and LG Chocolate bar ad spending, 2006 and 2007
- Third-party and UGM video reviews to become more important
- Manufacturer and phone-specific promotional websites
- Sidekick’s Pitch to young males
- The iPhone Guided Tour
- Television ads
- Social Networking and Mapping Features
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- Figure 28: Helio television ad, 2008
- Figure 29: Helio television ad, 2008
- LG uses product placement to suggest its products are from the future
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- Figure 30: LG television ad, 2008
- BlackBerry—for life, not just business use
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- Figure 31: BlackBerry “Life on BlackBerry” TV Ad, 2008
- Combining humor with specific applications
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- Figure 32: Motorola moto 9QC TV ad, 2008
- Figure 33: Motorola RAZR2 TV ad, 2008
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- Figure 34: Verizon/palm TV ad, 2008
- Chasing the music enthusiast
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- Figure 35: Motorola rokr TV ad, 2008
- Figure 36: Samsung electronic juke TV ad, 2008
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- Figure 37: Samsung upstage TV ad, 2008
- Figure 38: Samsung upstage TV ad, 2008
Innovation and Innovators
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- The iPhone sets the standard and the stage
- Nokia’s N-series may revitalize the brand
- Samsung/Helio Fin—a flip-style smartphone
- BlackBerry appeals to business professionals
- Sony Ericsson raises the bar for camera phones
- Samsung appeals to serious music enthusiasts
- Fashion label-branded phones build identity with technology
- miCoach
- Garmin Nuvi
Ownership
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- Key points
- Penetration increases slowly in 2007
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- Figure 39: Cell phone ownership, April 2000-June 2007
- Four in 10 seniors do not have a cell phone
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- Figure 40: Cell phone ownership, by age, June 2008
- Nearly half of under-$25Ks do not have a cell phone
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- Figure 41: Cell phone ownership, by household income, June 2008
Attitudes and Motivations
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- Key points
- Size/shape/style and cost key decision-making criteria
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- Figure 42: Factors in selecting current phone, by age, June 2008
- Higher-income respondents seek style and pay more attention to interface
- Attitudes toward memory and screen size
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- Figure 43: Attitudes towards phone screen size, internet and memory, by age, June 2008
- Memory cards important to many 18-44 year olds
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- Figure 44: Attitudes towards memory cards in phones, by age, June 2008
- 18-24s have the highest affinity for their phones
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- Figure 45: Affinity for cell phones, by age, June 2008
- Brand associations
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- Figure 46: Brand attributes, by brand, June 2008
- 18-34s more likely to describe cell phone brands as stylish
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- Figure 47: Brands associated with term “stylish,” by age, June 2008
Features and Cost
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- Key points
- Contacts, calendar, picture, and video are top
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- Figure 48: The phone versus other handhelds for use in internet, music, GPS, and video, June 2008
- 18-34 year olds spend more on phones
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- Figure 49: Cost of most recently acquired cell phone, by age, June 2008
- Age more relevant to spend than income
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- Figure 50: Cost of most recently aqcuired cell phone, by household income, June 2008
Race and Hispanic Origin
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- Key point
- Hispanics and blacks under-index on usage
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- Figure 51: Cell phone ownership, by race/Hispanic origin, February 2007-March 2008
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- Figure 52: Cell phone ownership, by Hispanic language preferences, February 2007-March 2008
- Minorities online pay more for advanced features
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- Figure 53: Cost of most recently acquired cell phone, by race/Hispanic origin, June 2008
- Asians and blacks more likely to acquire new phone at end of contract
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- Figure 54: Reasons for acquiring last cell phone, by race/Hispanic origin, June 2008
- Minorities more likely to use advanced features and services
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- Figure 55: Cell phone services used in the last 30 days, by race/Hispanic origin, February 2007-March 2008
- Size/shape/style and prices are important considerations for all segments
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- Figure 56: Factors in selecting current phone, by race/Hispanic origin, June 2008
- Minorities more likely to report that they “love” their phone
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- Figure 57: Attitudes towards cell phones, by race/Hispanic origin, June 2008
Custom Consumer Groups
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- Affluent middle-aged couples over-index on cell phone ownership
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- Figure 58: Cell phone ownership, by key owning cohorts, February 2007-March 2008
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- Figure 59: I love my phone, by key women, black and Hispanic age groups, June 2008
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- Figure 60: I get a new cell phone at least once a year, 18-34 year olds, by race/Hispanic origin, June 2008
Cluster Analysis
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- Introduction
- Phonophiles
- Personalizers
- Chitchatters
- Cluster characteristics
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- Figure 61: Cell phone clusters, June 2008
- Figure 62: Media downloads in the past 30 days, by clusters, June 2008
- Figure 63: Brand familiarity, by clusters, June 2008
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- Figure 64: Favorite body style of cell phone, by clusters, June 2008
- Figure 65: Spend on most recent cell phone purchase, by clusters, June 2008
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- Figure 66: Reason for acquisition of phone, by clusters, June 2008
- Figure 67: Factors in selecting current phone, by clusters, June 2008
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- Figure 68: Attitudes towards cell phones, by clusters, June 2008
- Cluster demographics
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- Figure 69: Cell phone owner clusters, by gender, June 2008
- Figure 70: Cell phone owner clusters, by age group, June 2008
- Figure 71: Cell phone owner clusters, by household income group, June 2008
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- Figure 72: Cell phone owner clusters, by race/Hispanic origin, June 2008
- Methodology
Appendix: Trade Associations
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