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Mobile Phones and Networks - Re-igniting The Replacement Cycle - UK - January 2010

ISSUES IN THE MARKET
Definition
Abbreviations
FUTURE OPPORTUNITIES
24-7 access to a screen
A map for your shopping trip
A handset that monitors how you feel
MARKET IN BRIEF
Polarisation in handset demand
Challenges in a saturated market
Shift in marketing and retail strategies
What consumers look for from a handset and network
INTERNAL MARKET ENVIRONMENT
Key points
Mobile ownership goes from strength to strength
Figure 1: Trends in mobile handset ownership, 2003-09
Figure 2: Average mobile cost per voice minute, 2003-08
Phones get increasingly smart
Figure 3: Smartphone usage, October 2008-November 2009
Handset usage: Still focused on the basics
Figure 4: Features mobile users have versus features used on a handset, 2009
The mobile web still in its infancy
Figure 5: Sites visited in the last three months using a mobile phone, July 2009-October 2009
Males and the young most likely to go online with their mobiles
Figure 6: Those browsing any site on a mobile phone in the last three months, by gender and age, October 2009
Figure 7: Smartphone ownership, by gender and age, November 2009
Mobile phones usurping other devices on the move
Figure 8: Items taken on out-of-home leisure activities, August 2009
BROADER MARKET ENVIRONMENT
Key points
Stagnating personal disposable incomes
Figure 9: GDP, PDI, consumer expenditure and savings, at current prices, 2004-14
An ageing population
Figure 10: Trends in the age structure of the UK population, by gender, 2004-14
UK more broadband-enabled than ever
Figure 11: Penetration of broadband internet at home, by demographics, October 2009
Figure 12: Tech competency groups, by number of activities done regularly using the internet, October 2009
COMPETITIVE CONTEXT
Key points
Consumers happy to wait for the latest innovations
Figure 13: Attitudes towards new technology products, October 2009
Mobiles aren’t a one-stop entertainment platform, yet
Figure 14: Methods used to watch films, October 2009
Reservations towards mobile banking
Figure 15: Attitudes towards mobile banking, June 2009
PC-based social networking access more popular
Figure 16: Where people access social networking sites, September 2009
WHO’S INNOVATING?
Key points
Google joins the mobile handset race
Mobile goes HD
Xbox Live goes mobile
Nokia makes a push into mobile TV
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
MARKET SIZE AND FORECAST
Key points
Saturated market conditions reduce subscriber growth
Figure 17: UK mobile phone subscriptions, 2003-09
Total mobile revenues decline by £0.6 billion…
Figure 18: Total mobile retail revenues, 2004-14
…driven by falling values of SMS and voice
Figure 19: Estimated mobile retail revenues, by service, 2004-09
Smartphones will impact on voice and text revenue…
…but also grow data revenues
Revenues by network operator
Figure 20: Mobile retail revenues by leading network, 2004-09
NETWORK MARKET SHARE
Key points
T-Mobile and Orange set to dominate the market
Figure 21: leading networks by total number of subscriptions, 2006-09
What next for mobile network 3?
Contract growth boosted by SIM-only deals
Figure 22: Leading networks, by subscriptions and payment type, 2006-09
COMPANIES AND PRODUCTS
 MOBILE NETWORKS
O2 UK
Orange
T Mobile
Virgin Mobile
Vodafone
 HANDSET MANUFACTURERS
LG Electronics
Motorola Limited
Nokia
Samsung
Sony Ericsson
CHANNELS TO MARKET
Key points
Retailers feel the iPhone factor
Figure 23: Leading specialist retailers and mobile network provider stores, by number of outlets, 2003-09
Focusing on more advanced handsets
Best Buy still to make its presence felt
Figure 24: Method internet respondents used when it came to buying their latest main mobile, December 2008
Increased pressure from supermarkets
BRAND COMMUNICATION AND PROMOTION
Key points
Handset manufacturers dwarf network spend
Figure 25: Adspend by top 20 mobile handset manufacturers and network operators, January 2006-October 2009
Growth in spend of the smartphone specialists
Figure 26: Adspend by smartphone specialists, January 2006 to October 2009
Focusing on emotional benefits
Focusing on added value
Greater use of social media
Figure 27: Types of sites on which online ads are most likely to be paid attention to, by age, August 2009
BRAND ELEMENTS
Key points
Brand map
Figure 28: Attitudes towards and usage of mobile phone service provider brands, December 2009
 BRAND QUALITIES OF MOBILE PHONE SERVICE PROVIDER BRANDS
Reliability and ease most important
Figure 29: Personalities of various mobile phone service provider brands, December 2009
 EXPERIENCE OF MOBILE PHONE SERVICE PROVIDER BRANDS
‘New’ network 3 has room to grow
Figure 30: Consumer usage of various mobile phone service provider brands, December 2009
 BRAND CONSIDERATION FOR MOBILE PHONE SERVICE PROVIDER BRANDS
Most customers, most considered
Figure 31: Consideration of various mobile phone service provider brands, December 2009
 BRAND SATISFACTION FOR MOBILE PHONE SERVICE PROVIDER BRANDS
Tesco up top for customer experience, 3 the least magic number
Figure 32: Satisfaction with various mobile phone service provider brands, December 2009
 BRAND COMMITMENT TO MOBILE PHONE SERVICE PROVIDER BRANDS
O2 has most loyal customers
Figure 33: Commitment to various mobile phone service provider brands, December 2009
 BRAND INTENTIONS FOR MOBILE PHONE SERVICE PROVIDER BRANDS
O2 has best retention, 3 causes biggest upset
Figure 34: Future usage intentions for various mobile phone service provider brands, December 2009
 BRAND RECOMMENDATION FOR MOBILE PHONE SERVICE PROVIDER BRANDS
O2 most recommended, Vodafone and T-Mobile just average
Figure 35: Recommendation of various mobile phone service provider brands, December 2009
 O2
What the consumer thinks
Figure 36: Attitudes towards the O2 brand, December 2009
 ORANGE
What the consumer thinks
Figure 37: Attitudes towards the Orange brand, December 2009
 
What the consumer thinks
Figure 38: Attitudes towards the 3 brand, December 2009
 LEBARA MOBILE
What the consumer thinks
Figure 39: Attitudes towards the Lebara Mobile brand, December 2009
 TESCO MOBILE
What the consumer thinks
Figure 40: Attitudes towards the Tesco Mobile brand, December 2009
CONTRACT VS. PAY AS YOU GO
Key points
Greater interest in SIM-only plans
Figure 41: Types of mobile phone deals used, November 2009
Polarisation of the market
What next for the pay as you go market?
Figure 42: Types of mobile phone deals used, by age, November 2009
How did respondents get their previous handsets?
Figure 43: How contract mobile phone users acquired their latest handset, November 2009
Figure 44: How pay as you go mobile phone users acquired their latest handset, November 2009
HANDSET USERS BY BRAND
Key points
Nokia still the most used handset brand
Figure 45: Handset usage, by brand, November 2009
Impact of range on overall handset usage
Figure 46: Availability of pay monthly phones, by brand and price, December 2009
Figure 47: Availability of pay as you go phones, by brand and price, December 2009
Over-55s most likely to opt for a Nokia
Figure 48: Handset usage by brand, by gender and age, November 2009
WHAT DO BUYERS LOOK FOR IN A NEW HANDSET?
Key points
Hardware versus software requirements
Figure 49: Most important characteristics looked for in a new mobile handset, November 2009
Differences by gender and age
Figure 50: Importance of design, brand and quality of integrated camera, by gender and age, November 2009
Software versus physical characteristics
Figure 51: Most important factors (netted) in deciding to buy a mobile handset, by demographics, November 2009
What consumers look for in a new handset, by brand owned
Figure 52: Most important factors in deciding to buy a mobile handset, by brand of current handset, November 2009
FACTORS INFLUENCING CHOICE OF MOBILE NETWORK
Key points
Consumers want great customer service on cheap deals
Figure 53: Most important factors in choosing a mobile network, November 2009
Women want clear information, men want 3G coverage
Figure 54: Most important factors in choosing a mobile network, by gender, November 2009
Older respondents most likely to want to pay the least
Figure 55: Most important factors in choosing a mobile network, by age, November 2009
USAGE OF MOBILE APPLICATIONS
Key points
Heavy media speculation, but low numbers of users
Figure 56: Usage of mobile applications, November 2009
Few would consider downloading, even with the right handset
Younger males the most likely to download apps
Figure 57: Usage of mobile applications, by gender and age, November 2009
Usage of mobile apps by network provider
Figure 58: Personal mobile phone network provider, by most popular statements on paid mobile services to mobile owners, November 2009
APPENDIX – CONTRACT VS. PAY AS YOU GO
Figure 59: Current mobile phone deal, by demographics, November 2009
Figure 60: Previous mobile phone deal, by demographics, November 2009
Figure 61: Current handset with contract how obtained, by demographics, November 2009
Figure 62: Current handset with PAYG phone how obtained, by demographics, November 2009
APPENDIX – HANDSET USERS BY BRAND
Figure 63: Brand of current handset, by demographics, November 2009
APPENDIX – WHAT DO BUYERS LOOK FOR IN A NEW HANDSET?
Figure 64: Most popular factors in deciding to buy mobile handset, by demographics, November 2009
Figure 65: Next most popular factors in deciding to buy mobile handset, by demographics, November 2009
Figure 66: Other factors in deciding to buy mobile handset, by demographics, November 2009
APPENDIX – FACTORS INFLUENCING CHOICE OF MOBILE NETWORK
Figure 67: Most popular factors in choosing mobile network, by demographics, November 2009
Figure 68: Next most popular factors in choosing mobile network, by demographics, November 2009
APPENDIX – USAGE OF MOBILE APPLICATIONS
Figure 69: Most popular statements on paid-for mobile services, by demographics, November 2009
Figure 70: Next most popular statements on paid-for mobile services, by demographics, November 2009

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