ChangeWave Research: Cell Phone and Service Provider Trends – 1st Half 2006
ChangeWave Research Report:
Cell Phone and Service Provider Trends – 1st Half 2006
Motorola Increases Cell Phone Lead – Nokia Visibility Improving;
Verizon on Top and Gaining Share Among Consumers Switching Providers
Overview
During the week of December 13-16, 2005, we surveyed Alliance members on their consumer cell phone and service preferences, including current ownership and future purchasing plans. A total of 2,138 members participated.
Bottom Line: Once again,Motorolahas the most market share among current cell phone owners, gaining 2-pts since our October 2005 survey. It’s also the top choice among those who plan to buy a cell phone in the next six months – up 4-pts since October. Second place Nokia haslost 1-pt in terms of current cell owners, but for the first time in years it is gainingshare (up a surprising 3-pts) among those who plan to buy in the next 6 months.
Verizon continues to dominate the cellular service providers market, enjoying a biglead in customer satisfaction and loyalty. It is also the company most likely to gain among those who areplanning to switch service providers. The glow of the AT&T merger is showing signs of wear for second place Cingular, which has dropped 3-pts since October among those planning to switch service providers.
In an important finding for Verizon, the survey shows very strong consumer interest in itsnew Fiber Optic (FiOS) Internetand Fiber Optic Television services for the home.
(A) Cell Phones
- Motorola Widens Lead Among Current Owners. Motorola (29%) remains the top manufacturer among currentcell phone owners, gaining 2-pts since our previous survey(Oct 2005). Second place Nokia (18%) is down a point, with Samsung (15%) in third.
- Motorola And Nokia Pick Up Share Among Planned Purchasers. One-in-every-three respondents (33%) planning to buy a cell phone in the next six months say they’ll buy Motorola – up 4-pts since October. Surprisingly, Nokia (14%) has gained 3-points among planned purchasers, the first uptick for the former industry leader we’ve seen in two years. Palm (6%) and RIM (3%) both registered declines among planned purchasers.
- Motorola RAZR OwnershipSet to Jump –Next 6 Months.In another positive sign for Motorola, while just3% of respondents currently own a Motorola RAZR phone, 6% say they’ll be buying one in the next six months.
- GPS-Enabled Cell Phones Show Market Strength. In a key sign of interest, 7% of Alliancerespondents said it is Very Likely they would purchase and pay a monthly navigation fee for a GPS-enabled cell phone, and 35% said it is Somewhat Likely.
- Declining Interest in MP3 Phones? While 14% say they or someone in their household is likely to purchase a cell phone with MP3 functionality in the next six months, that’s down 7-pts from our October survey. Motorola (33%) is the top choice among those likely to purchase an MP3 phone, with Nokia (18%) second.
(B) Cellular Service Providers
- Verizon Leads Cingular Among Service Providers.Verizon (28%) remains the top cellular service provider followed by Cingular (26%), unchanged from our October survey.
- Verizon Tops in Customer Satisfaction and Customer Loyalty. Verizon (92%) continues to dominate in terms of customer satisfaction, up 3-pts since October. Importantly, while 18% of all cell phone respondents say they are likely to switch carriers in the next six months, only 9% of Verizon customers saythey are likely to switch.
- And Verizon Gains Most From Provider Switching. Verizon (29%) is the top choice among those likely to change service providers, up 2-pts. Cingular (11%) is down 3-pts. We note that T-Mobile (9%) gained 2-pts.
- Very Strong Consumer Interest in Verizon’s Fiber Optic Services.When provided a description of Verizon’s new Fiber Optic (FiOS) Internet service, an exceptionally high 18% of respondents said they were Very Likely and 31% Somewhat Likelyto sign-up if it becomes available in their area. Similarly, 12% said they were Very Likely and 37% Somewhat Likelyto sign-up for Verizon’sFiber Optic TV service if it becomes available.
Summary of Key Findings
The ChangeWave Alliance is a group of 6,000 highly qualified business, technology, and medical professionals in leading companies of select industries—credentialed professionals who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.
Helping You Profit From A Rapidly Changing World ™
Table of Contents
Summary of Key Findings...... 2
The Findings...... 4
(A)Cell Phones...... 4
(B)Cellular Service Providers...... 9
(C) FiberOptic Services(FiOS)...... 13
ChangeWave Research Methodology...... 14
About ChangeWave Research...... 15
I. The Findings
Introduction
During the week of December 13-16, 2005, we surveyed Alliance members on their consumer cell phone and service preferences, including current ownership and future purchasing plans.
Total Respondents (n=2,138)
(A) Cell Phones
(1) Question Asked: Do you currently own a cell phone?
Current SurveyDec ‘05 / Previous Survey Oct ‘05 / Previous Survey
June ‘05 / Previous Survey Sep 04
Yes – Without a Camera / 56% / 58% / 62% / 73%
Yes - With a Camera / 36% / 33% / 29% / 17%
No - But Plan to Purchase a Cell Phone in the Future / 2% / 2% / 2% / 3%
No - Do Not Own a Cell Phone and Have No Plans to Get One / 5% / 6% / 7% / 7%
Camera Phone Ownership Rises. Thirty-six percent (36%) of respondents say they currently own a cell phone with a camera, up 3-pts from October 2005. The percentagewhoown a cell phone without a camera has dropped 2-pts since October to 56%.
(1A) Question Asked: For those of you who currently own a cell phone, which company manufactures it? (n=1,972)
Current SurveyDec ‘05 / Previous Survey Oct ‘05 / Previous Survey Jun ‘05 / Previous Survey Sep ‘04 / Previous Survey Dec ‘03
Motorola / 29% / 27% / 26% / 25% / 24%
Nokia / 18% / 19% / 22% / 28% / 35%
Samsung / 15% / 15% / 16% / 13% / 11%
LG / 14% / 13% / 11% / 9% / 4%
Sony/Ericsson / 4% / 5% / 5% / 5% / 6%
Audiovox / 3% / 2% / 3% / 3% / 2%
Kyocera / 3% / 2% / 3% / 3% / 5%
Palm (e.g., Treo) / 3% / 3% / 3% / 2% / 1%
Sanyo / 3% / 4% / 3% / 4% / 3%
Research in Motion (e.g., BlackBerry) / 2% / 2% / 2% / 1% / 1%
Siemens / 2% / 2% / 2% / 2% / 2%
Qualcomm / 1% / 1% / 1% / 1% / 2%
NEC / 0% / 0% / NA / NA / NA
Panasonic / 0% / 0% / 0% / 1% / NA
Motorola Widens Lead Among Current Owners. Motorola (29%) remains the top manufacturer among current cell phone owners, gaining 2-pts since our previous survey (Oct 2005). Second place Nokia (18%) is down a point, with Samsung (15%) in third.
(1B) Question Asked: And how satisfied are you with your current cell phone?(n=1,972)
Breakout of Respondents by Manufacturer
TotalSample / Motorola / Nokia / Samsung / LG / Sony/
Ericsson
Very Satisfied / 38% / 39% / 35% / 39% / 40% / 36%
Somewhat Satisfied / 49% / 48% / 52% / 51% / 48% / 53%
Somewhat Unsatisfied / 9% / 9% / 10% / 7% / 10% / 9%
Very Unsatisfied / 3% / 4% / 3% / 3% / 3% / 2%
Samsung Leads in Cell Phone Satisfaction. Among the top cell phone manufacturers, Samsung (90%) leads by 1-pt in overall customer satisfaction, with Sony/Ericsson (89%) second and Motorola (87%) third.
(1C) Question Asked: Do you plan on purchasing or upgrading to a new cell phone in the next 6 months? (n=2,020)
Current Survey Dec ‘05 / Previous Survey Oct ‘05 / Previous Survey Jun ‘05 / Previous Survey Sep ‘04Yes - New Cell Phone Without a Camera / 13% / 11% / 14% / 17%
Yes - New Cell Phone With a Camera / 16% / 13% / 14% / 12%
No, Will Not Be Upgrading/Buying a Cell Phone Within Next 6 Months / 50% / 51% / 50% / 46%
Just Recently Upgraded to a Newer Model Cell Phone / 14% / 16% / 15% / 16%
Don't Know / 7% / 8% / 6% / 7%
Planned Purchases - Next Six Months. Looking at the next six months, 16% say they plan on purchasing a new camera with a cell phone, 3-pts more than in October. Another 13% plan on purchasing a new cell phone without a camera, up 2-pts.
(1D) Question Asked: For those of you who plan on purchasing/upgrading to a new cell phone, which company is the most likely manufacturer of the phone you'll eventually purchase? (n=584)
Current Survey Dec ‘05 / Previous Survey Oct ‘05 / Previous Survey Jun ‘05 / Previous SurveySep ‘04 / Previous Survey Dec ‘03
Motorola / 33% / 29% / 21% / 13% / 14%
Nokia / 14% / 11% / 16% / 19% / 26%
Palm (e.g., Treo) / 6% / 10% / 10% / 7% / 6%
LG / 5% / 5% / 4% / 5% / 3%
Samsung / 5% / 6% / 8% / 9% / 9%
Research in Motion
(e.g. BlackBerry) / 3% / 6% / 6% / 4% / 2%
Sony/Ericsson / 3% / 4% / 2% / 4% / 4%
Audiovox / 1% / 1% / 1% / 1% / 1%
Kyocera / 1% / 0% / 0% / 0% / 3%
Panasonic / 1% / 0% / 0% / 0% / NA
Sanyo / 1% / 1% / 2% / 2% / 1%
Siemens / 1% / 1% / 0% / 1% / 2%
NEC / 0% / 0% / 0% / 0% / NA
Qualcomm / 0% / 0% / 0% / 1% / 0%
Don't Know/
NotApplicable / 26% / 24% / 29% / 35% / 23%
Motorola And Nokia Pick Up Share Among Planned Purchasers. One-in-every-three respondents (33%) planning to buy a cell phone in the next six months say they’ll buy Motorola – up 4-pts since October. Surprisingly, Nokia (14%) has gained 3-pts among planned purchasers, the first uptick for the former industry leader we’ve seen in two years. Palm (6%) and RIM (3%) both registered declines among planned purchasers.
(1E) Question Asked: Motorola's RAZR phone is a super-slim cell phone (the width of a credit card) which is currently available through most cellular providers. Do you currently own a RAZR phone or plan on buying one over the next 6 months?(n=2,020)
Yes, Currently Own a RAZR Phone / 3%Yes, Plan to Buy One Next 6 Months / 6%
No / 78%
Don't Know/ No Answer / 13%
Motorola RAZR OwnershipSet to Jump –Next 6 Months.In another positive sign for Motorola, while just 3% of respondents currently own a Motorola RAZR phone, 6% say they’ll be buying one in the next six months.
(1F) Question Asked: Please elaborate on any pluses or minuses you've found with your RAZR phone. If you don't own a RAZR phone yet, why do you plan on buying it?(n=129)
Respondents Who Currently Own a RAZR Phone. Most current RAZR phone owners provided positive responses when asked to name pluses or minuses they’ve found with the RAZR phone. The slim size and design of the RAZR phone was the top feature; good quality and overall style were also frequently mentioned. As respondent PUK7452 says, "Plus is definitely the size. It fits in my pocket without distortion or discomfort…” Respondent ALM56197 adds, "Excellent reception & super convenient."
Respondents cited poor phone book features and problems with the ear speaker as deficiencies, but the majority of negative comments were a single mention about a specific feature. Owner BOU7937 notes, "…Sometimes it’s hard to hear unless the speaker is lined up directly over the ear." Respondent KGI7365 concurs and adds, "…Minuses - Volume a little low sometimes especially when in a car. Address book is cumbersome."
Respondents Planning to Buy a RAZR Phone in Next Six Months. Slim size and design were also top pluses cited by those who say they plan to buy a RAZR phone over the next six months. Prospective owners also frequently mentioned getting favorable feedback from others. As described by potential owner DBR18521, "I am interested in the RAZR because of the size and features. In particular, Bluetooth is very helpful because it works with my car and my portable GPS. I am really not interested in the camera, but I believe it comes with one anyway."
A Sample of Alliance Member Responses Can Be Found in Appendix A.
(2) Question Asked: Some analysts believe the Global Positioning System (GPS) navigation device – a popular feature in autos – could soon become a standard cell phone feature. If a GPS-enabled cell phone was offered by your cellular service provider, how likely is it that you would purchase one and pay a monthly GPS navigation fee? (n=2,020)
Very Likely / 7%Somewhat Likely / 34%
Unlikely / 53%
Don't Know / 5%
GPS-Enabled Cell Phones Show Market Strength. In a key sign of interest, 7% of Alliance respondents said it is Very Likely they would purchase and pay a monthly navigation fee for a GPS-enabled cell phone, and 34% said it is Somewhat Likely.
(3) Question Asked: Currently, there are several manufacturers offering (or planning to offer) cell phones with MP3 functionality (i.e., a music phone). How likely is it that you or someone in your household will purchase this type of phone within the next 6 months? (n=2,020)
Current Survey Dec ‘05 / Previous Survey Oct ‘05Very Likely / 4% / 5%
Somewhat Likely / 10% / 16%
Unlikely / 82% / 76%
Don't Know / 2% / 2%
Declining Interest in MP3 Phones? While14% say they or someone in their household is likely to purchase a cell phone with MP3 functionality in the next six months, that’s down 7-pts from our October survey.
(3A) Question Asked: From which of the following manufacturers are you (or someone in your household) most likely to purchase it from?(Choose No More Than Two)(n=295)
Motorola / 33%Nokia / 18%
Sony/Ericsson / 13%
Samsung / 13%
LG / 9%
Palm / 6%
Audiovox / 2%
Sanyo / 1%
Siemens / 1%
Kyocera / 0%
Other / 2%
Don't Know / 27%
Top Choice for MP3 Phones. Motorola (33%) is the top choice among those likely to purchase an MP3 phone, with Nokia (18%) second.
(B) Cellular Service Providers
(4) Question Asked: Who is your cellular service provider? (n=1,972)
Current Survey Dec ‘05 / Previous Survey Oct ‘05 / Previous Survey Jun ‘05 / Previous Survey Sep ‘04 / Previous Survey Dec ‘03Verizon / 28% / 28% / 27% / 27% / 23%
Cingular* / 26% / 26% / *26% / 12% / 12%
Sprint/Nextel** / 14% / **14% / 12% / 15% / 16%
T-Mobile / 10% / 10% / 11% / 8% / 8%
Alltel / 2% / 2% / 2% / 2% / 2%
Vodafone / 2% / 2% / 2% / 2% / 2%
Bell Mobility / 1% / 2% / 2% / 2% / 2%
Don't Know / 0% / 0% / NA / NA / NA
Not Applicable / 1% / 5% / 5% / 13% / 2%
Other / 15% / 12% / 11% / 10% / 9%
*Note: AT&T Wireless was acquired by Cingular prior to the June 2005 survey.
**Note: Sprint and Nextel merged prior to the October 2005 survey.
Verizon Leads Cingular Among Service Providers.Verizon (28%) remains the top cellular service provider followed by Cingular (26%), unchanged from our October survey. Sprint/Nextel (14%) is third, also unchanged since October.
(4A) Question Asked: How satisfied are you with your current cellular service provider? (n=1,972)
Current Survey (December 2005) -- Breakout of Respondents by Provider
Totals / Verizon / Cingular / Sprint/ Nextel / T-MobileVery Satisfied / 30% / 44% / 22% / 24% / 26%
Somewhat Satisfied / 54% / 48% / 58% / 58% / 56%
Somewhat Unsatisfied / 12% / 6% / 15% / 14% / 15%
Very Unsatisfied / 3% / 2% / 4% / 4% / 4%
Previous Survey(October 2005) – Breakout of Respondents by Provider
Totals / Verizon / Cingular / Sprint / T-MobileVery Satisfied / 27% / 38% / 21% / 22% / 26%
Somewhat Satisfied / 57% / 51% / 61% / 58% / 51%
Somewhat Unsatisfied / 12% / 9% / 14% / 16% / 16%
Very Unsatisfied / 3% / 1% / 4% / 3% / 7%
Customer Satisfaction. Verizon (92%) leads in terms of overall customer satisfaction, up 3-pts since October 2005.
(4B) Question Asked: How likely is it that you will change cellular service providers within the next 6 months? (n=1,972)
Current Survey Dec ‘05 / Previous Survey Oct ‘05 / Previous Survey Jun ‘05 / Previous Survey Sep ‘04 / Previous Survey Dec ‘03Very Likely / 7% / 6% / 7% / 9% / 13%
Somewhat Likely / 12% / 11% / 14% / 15% / 17%
Unlikely / 77% / 77% / 73% / 71% / 64%
Don't Know / 4% / 4% / 4% / 4% / NA
Not Applicable / 1% / 1% / 2% / 1% / NA
Current Survey(December 2005)– Breakout of Respondents by Provider
Totals / Verizon / Cingular / Sprint/Nextel / T-Mobile
Very/Somewhat
Likely / 18% / 9% / 21% / 22% / 25%
Unlikely / 77% / 87% / 74% / 72% / 71%
Previous Survey (October 2005) – Breakout of Respondents by Provider
Totals / Verizon / Cingular / Sprint / T-MobileVery/Somewhat
Likely / 17% / 11% / 18% / 17% / 32%
Unlikely / 77% / 84% / 77% / 76% / 64%
VerizonTops for Customer Loyalty. While 18% of all cell phone respondents say they are likely to switch carriers in the next six months, only 9% of Verizon customers say they are likely to switch.
(4C) Question Asked: For those of you who are likely to change cellular service providers, which company are you most likely to switch to? (n=360)
Current SurveyDec ‘05 / Previous Survey Oct ‘05 / Previous Survey Jun ‘05 / Previous Survey Sep ‘04 / Previous Survey Dec ‘03
Verizon / 29% / 27% / 26% / 23% / 25%
Cingular / 11% / 14% / 15% / 11% / 7%
T-Mobile / 9% / 7% / 10% / 9% / 8%
Sprint/Nextel* / 6% / *5% / 4% / 4% / 5%
Bell Mobility / 3% / 1% / 2% / 2% / 0%
Vodafone / 1% / 1% / 2% / 3% / 0%
Alltel / 0% / 0% / 0% / 0% / 0%
Don't Know / 24% / 25% / 29% / 30% / 32%
Not Applicable / 11% / 13% / 7% / 10% / 2%
Other / 7% / 4% / 3% / 2% / 7%
*Note: Sprint and Nextel merged prior to the October 2005 survey.
And Verizon Gains Most From Provider Switching. Verizon (29%) is the top choice among those likely to change service providers, up 2-pts. Cingular (11%) is down 3-pts. We note that T-Mobile (9%) gained 2-points.
(5) Question Asked: How do you currently utilize your cell phone service at home?(n=1,972)
Current Survey Dec ‘05 / Previous Survey Oct ‘05 / Previous Survey Jun ‘05 / Previous Survey Sep ‘04I have cell phone service but still rely primarily on traditional home phone service / 72% / 69% / 73% / 79%
I have cell phone service but rely primarily on VoIP home phone service / 9% / 8% / 7% / 4%
I use cell phone service as my primary home phone service / 13% / 14% / 13% / 12%
I use cell phone service as my only home phone service / 2% / 3% / 3% / 3%
Other / 3% / 4% / 3% / 4%
The Battle for Traditional Home Service. Unexpectedly, the percentage of cell phone owners who say they still rely primarily on traditional home phone service (72%) rose 3-pts since October. Those who say they rely primarily on VoIP (9%) is also up 1-pt.
(6) Question Asked: Some cellular service providers have begun delivering video clips such as sports clips, movie trailers, and news highlights directly to cell phones and other handheld devices. How likely is it that you will pay for this service within the next 6 months? (n=1,972)
Very Likely / 1% / 2% / 1%
Somewhat Likely / 3% / 3% / 3%
Unlikely / 93% / 92% / 92%
Don't Know / 1% / 2% / 2%
Not Applicable / 1% / 2% / 1%
Video Clip Service. Only 4% of cell phone owners say they would be likely to pay for a service delivering video clips directly to their cell phones in the next six months, 1-pt less than in October.
(C) Fiber Optic Services (FiOS)
These next two questions focus on Verizon's Fiber-Optic Service (FiOS).
(7) Question Asked: Verizon says it is building its Fiber-Optic-Service (FiOS) to provide consumers with incredible broadband speeds, greater reliability and maximum flexibility for their voice, data and video connections.
The Verizon FiOS Internet service – now available in select areas – provides broadband speeds of up to 5 Mbps (Megabits-per-second) for $35 per month and 15 Mbps for $45 per month. How likely are you to sign-up for Verizon's new FiOS Internet service if it becomes available in your area?
Very Likely / 18%Somewhat Likely / 31%
Unlikely / 38%
I Already Have FiOS / 1%
Don't Know / 10%
No Answer / 2%
(7A) Question Asked: Verizon is also building a Fiber-Optic Television service (FiOS TV) as a competitive alternative to cable and satellite television services. Current availability remains very limited, but Verizon plans to expand to several suburban areas in the near future.
FiOS TV provides a broad collection of all-digital programming (including HD, video-on-demand, and digital video recording) and can be purchased as a stand-alone service or in conjunction with FiOS Internet and voice services. Pricing ranges from $13 per month for Basic to $40 per month for Expanded Basic, with additional packages available. How likely are you to sign-up for Verizon's new FiOS TV service if it becomes available in your area?