Cell Phone Producers Making the Right Call

By Erik Linask

Associate Editor

 

The telecom market is growing, particularly in terms of available access means and applications — especially in the wireless realm.  What that also means is that new devices are constantly required to accommodate this change.  It also means that mobile handset producers must be cautious not to make their devices exceedingly complicated — ease of use is critical in the communications market.

The good news for wireless mobile phone manufacturers — some of them, at least — is that overall satisfaction among cellular phone users has risen four percent in the pat year, according to the most recent J.D. Power and Associates Wireless Mobile Phone Evaluation Study.

The study measures satisfaction of customers who have owned their mobile phones for less than two years — which means it reasonably assesses recent enhancements implemented by cell phone producers.  Overall satisfaction is based on performance in five key factors (in order of importance):

 

 

Importantly, the individual category with the highest increase sine 2005 is phone Operations (up 5 percent), which addresses areas such as ease of phone navigation, clarity of text on the display screen, and understanding how to operate the handset when purchased. Satisfaction with handset features also rose 5 percent, mainly based on higher ratings for Internet-based features and the variety of services and features available.

The fact that phone operation satisfaction is on the rise is significant in that it reflects that phone manufacturers are not only able to add features and access to services to their handsets, but they are also able to keep operation simple.  Other than poor service, nothing is more frustrating for a user than a handset that is difficult to use.  On the other hand, users that are pleased with the intuitiveness of their handsets are considerably more likely to purchase another model from the same manufacturer.

“The incidence of sending/messaging video and picture content has increased 29 percent between 2005 and 2006. Making it easier for customers to learn how to operate specific product/service offerings can increase satisfaction performance and enhance the overall wireless experience. In fact, the handset can enhance the consumer’s view of the wireless carrier by making the service experience much more enjoyable, which will promote future purchases of additional products,” explained Kirk Parsons, senior director of wireless services at J.D. Power and Associates.

The study also suggests that the users are trending towards clamshell style phones in their new purchases, as opposed to bar style units.  Since 2002, clamshell phone purchases have risen from 7 to 58 percent, while bar style purchases have dipped 31 percent (from 70 to 39 percent).  Partly, this is a result of the smaller, more convenient size of clamshells, which adds visual appeal.  But it is also a function of clamshell units being better — at least in the eyes of users, who are patently more pleased with their handsets than owners of bar phones.

Other key points gleaned from the new data include a slight decrease in handset purchase price ($86, down from $99 two years ago).  Perhaps some of this can be attributed to a rise in the presence of Web-based and other third-party mobile phone retailers, which tend to offer significant discounts on phones in order to secure service contracts for providers.

The average replacement timeframe is down slightly, from 18 months to 17.6 months in 2003.  Though it is not a significant dip, that figure is still considerably lower than the two-year contract that has become commonplace among service providers.  This, of course, is a benefit to providers, who impose a steep early cancellation penalty, since subscribers are less likely to change providers.  Rather, they will purchase a new handset from the same provider and sign a new two-year agreement to secure a lower purchase price.

** Data for this study is based on experiences reported by 18,740 wireless users who have owned their current cell phone for less than two years.  The results are based on the two most recent reporting waves, which were conducted in October 2005 and February 2006.

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Erik Linask is Associate Editor of INTERNET TELEPHONY. Most recently, he was Managing Editor at Global Custodian, an international securities services publication. To see more of his articles, please visit Erik Linask’s columnist page.