Seismic Shift Among Consumers to Advanced Smart Phones

Record numbers of consumers are abandoning their basic cell phones for more advanced models, according to the latest ChangeWave consumer cell phone survey.The mid January survey of 4,182 consumers tracked key market share changes affecting cell phone manufacturers and service providers alike.

Research in Motion (RIMM) and Apple (AAPL) appear to be the primary beneficiaries of the seismic shift toward more advanced cell phones. Looking ahead, the Apple iPhone (17%; up 1-pt) is now the top choice among respondents planning to buy a new cell phone in the next six months, but second place RIM (15%; up 3-pts) has the most momentum.

On the downside, one-time market dominator Motorola (MOT) (11%) has declined another 4-pts in terms of future planned purchases, continuing a monstrous slide that began immediately after Apple CEO Steve Jobs’ initial announcement of the iPhone.

As the above chart shows, Motorola’s share of future planned purchases has plummeted over the past 12 months.

Feeling Satisfied?

Apple (72% Very Satisfied) also maintains its big industry lead in customer satisfaction compared to the other major manufacturers, with RIM (55%) a strong second.

To put this in context, the following chart shows the percentage of respondents who say they are Very Satisfied with their current cell phone, broken out by manufacturer.

As we’ve seen in our recent consumer surveys, Palm (PALM) (30%) now ranks at the very bottom in terms of customer satisfaction. Motorola (34%), Sony/Ericsson (34%) and Samsung (34%) are all tied for next-to-last place.

Warning Signs on Consumer Spending

In a troublesome sign, the overall consumer cell phone buying environment appears weaker, with only 23% of respondents saying they'll purchase or upgrade their cell phone over the next 6 months – 3-pts less than at any other point of the past year.

This finding is in line with the overall slowdown in consumer purchasing we've been tracking in our ChangeWave consumer spending surveys over the past six months. It's a trend we will continue to watch closely in the weeks ahead.

The Battle among Cellular Service Providers

Verizon (VZ) (30%; unchanged) and AT&T (T) (28%; down 1-pt) remain locked in a tight battle for supremacy in the cellular service providers market – with Verizon maintaining a slight edge in terms of current share among respondents.

The story is different, however, when it comes to future purchases. AT&T has regained its footing after having fallen precipitously in our last survey – with one-in-four respondents (25%) who plan to switch carriers over the next six months now saying they’ll go with AT&T, a 2-pt increase.

Verizon (21%) remains in second place, unchanged from previously.

When it comes to customer satisfaction, however, Verizon holds on to top honors, with 42% of their customers saying they’re Very Satisfied. By comparison, only 30% of AT&T customers report being Very Satisfied.

As these results clearly show, the consumer cell phone market is continuously evolving. And as always, we'll keep our ear to the ground and monitor any new developments as they occur.

Jim Woods co-wrote this article.

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This article summarizes the results of a recent ChangeWave Alliance survey. The Alliance is a research network of 14,000 business, technology and medical professionals who spend their everyday lives working on the front line of technological change. For more info on the ChangeWave Alliance, or if you are interested in joining, please click here.

Comments

[Jon T:]

Seismic is the right word.

But there is another metric that should be included in the analysis above.

The iPhone's internet useage is way up on every other mobile device.

Just look at Google's stats:

www.nytimes.com/2008/0...

The combination of those three things: buying intention, internet use and satisfaction levels prove that iPhone is going to be a phenomena.

2008 Feb 08 04:59 AM