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Mobile Phones - UK - February 2013

“Mobile wallets are of importance to smartphone take-up not because they ignite consumers’ imaginations, but rather because they present arguably the first truly relatable service that older consumers and those otherwise uninterested in smartphones and smartphone applications have a genuine incentive to engage with.”
– Samuel Gee, Technology Analyst
Some questions answered in this report include:

  • What does the increasing prevalence of bring your own device (BYOD) schemes predict about smartphones sales?
  • How important will mobile wallets become?
  • What can be done to increase smartphone take-up by older consumers?
  • How can the remaining younger consumers be brought to smartphone ownership?

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Table of contents

  1. Introduction

      • Definitions
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Forecast value of mobile phone sales, 2007-17
            • Market factors
              • Mobile ownership has mostly plateaued
                • Frequent mobile internet use increases
                  • Smartphone ownership likely to slow
                    • Companies, brands and innovations
                      • Figure 2: Mobile phone ownership, by device manufacturer, 2011-12
                    • The consumer
                      • Figure 3: Operating system running on consumers’ smartphones, November 2012
                      • Figure 4: Most useful or valuable features on a smartphone, November 2012
                      • Figure 5: Important factors that contributed to the choice of consumer’s most recently purchased smartphone, November 2012
                      • Figure 6: Reasons that have prevented consumers buying smartphones, November 2012
                      • Figure 7: Attitudes towards basic mobile phones, November 2012
                    • What we think
                    • Issues in the Market

                        • What does the increasing prevalence of bring your own device (BYOD) schemes predict about smartphones sales?
                          • How important will mobile wallets become?
                            • What can be done to increase smartphone take-up by older consumers?
                              • How can the remaining younger consumers be brought to smartphone ownership?
                              • Trend Application

                                  • Trend: Who are the Joneses?
                                    • Trend: Many Mes
                                      • Mintel Futures: East Meets West
                                      • Market Drivers

                                        • Key points
                                          • Mobile ownership has mostly plateaued
                                            • Figure 8: Number of mobile phones owned by consumers, 2008-12
                                          • Long replacement cycles unlikely to shorten
                                            • Figure 9: Frequency with which consumers purchased or upgraded a mobile phone, 2010-12
                                          • Touchscreens continue to dominate
                                            • Figure 10: Features on mobile phones owned by consumers, 2008-12
                                          • Frequent internet usage increases
                                            • Figure 11: Frequency of using mobile phone to connect to the internet, 2011-12
                                          • Increase in mobile wallet services
                                            • Difficulty in defining category as ‘phablets’ gain popularity
                                              • Smartphones branch out into specialised features
                                                • Smartphone penetration likely to slow dramatically over 2013
                                                  • Figure 12: Smartphone ownership, by age, September 2012
                                              • Who’s Innovating?

                                                • Key points
                                                  • O2 cuts down on chargers in new purchases
                                                    • Flexible glass and batteries may well revolutionise handset design
                                                      • Payments Council announces unified mobile payment service
                                                        • HTC pairs phablet device with mini phone
                                                        • Market Size and Forecast

                                                          • Key points
                                                            • Market on slow trickle to growth
                                                              • Figure 13: Value of mobile phone sales, 2007-17
                                                            • Forecasts
                                                                • Figure 14: Forecast value of mobile phone sales, 2007-17
                                                            • Market Segmentation and Share

                                                              • Key points
                                                                • Smartphone ownership fuelled by increasing dominance from Google
                                                                  • Figure 15: Mobile phone ownership by platform provider, 2010-12
                                                                  • Figure 16: Worldwide android activations per day, December 2011-September 2012
                                                                • Select manufacturers increase market share
                                                                  • Figure 17: Mobile phone ownership by device manufacturer, 2011-12
                                                                • 4G network capable handsets have yet to impact meaningfully
                                                                  • Figure 18: 3G, 4G and GPRS/EDGE-capable handset ownership by age and gender, October 2012
                                                              • Channels to Market

                                                                • Key points
                                                                  • In-store purchasing remains most popular
                                                                    • Figure 19: Where consumers purchased or upgraded their last mobile phone, 2008-12
                                                                  • Older consumers take more recommendations from family and friends
                                                                    • Figure 20: Purchase or upgrade of consumers’ most recently obtained mobile phone over the internet, or through family/friends, by age, 2012
                                                                  • Operators the most effective handset retailer
                                                                    • Figure 21: Purchase locations of mobile phones (in-store and online), 2012
                                                                • Companies and Products

                                                                    • Apple Inc.
                                                                      • Company overview
                                                                        • Financial information
                                                                          • Figure 22: Key financials, Apple Inc, 2011-12
                                                                        • Product range
                                                                          • Recent activity/innovations
                                                                            • HTC Corporation
                                                                              • Company overview
                                                                                • Financial information
                                                                                  • Figure 23: Key financials, HTC Corporation, 2011/Q4-2012/Q3
                                                                                • Product range
                                                                                  • Recent activity/innovations
                                                                                    • LG Electronics
                                                                                      • Company overview
                                                                                        • Financial information
                                                                                          • Figure 24: Key financials, LG Electronics, 2011-12/Q3
                                                                                        • Product range
                                                                                          • Recent activity/innovations
                                                                                            • Motorola Inc.
                                                                                              • Company overview
                                                                                                • Financial information
                                                                                                  • Figure 25: Key financials, Motorola Mobility, 2010-12/Q1
                                                                                                • Product range
                                                                                                  • Recent activity/innovations
                                                                                                    • Nokia Corporation
                                                                                                      • Company overview
                                                                                                        • Financial information
                                                                                                          • Figure 26: Key financials, Nokia Corporation, 2011-12
                                                                                                        • Product range
                                                                                                          • Recent activity/innovations
                                                                                                            • Research In Motion Limited
                                                                                                              • Company overview
                                                                                                                • Financial performance
                                                                                                                  • Figure 27: Key financials, Research In Motion, 2011-12
                                                                                                                • Product range
                                                                                                                  • Recent activity/innovations
                                                                                                                    • Samsung Telecommunications
                                                                                                                      • Company overview
                                                                                                                        • Financial performance
                                                                                                                          • Figure 28: Key financials, Samsung Electronics, 2011-12/Q4
                                                                                                                        • Product range
                                                                                                                          • Recent activity/innovations
                                                                                                                            • Sony Mobile Communications
                                                                                                                              • Company overview
                                                                                                                                • Financial information
                                                                                                                                  • Product range
                                                                                                                                    • Recent activity/innovations
                                                                                                                                    • Brand Research

                                                                                                                                      • Brand map
                                                                                                                                          • Figure 29: Attitudes towards and usage of brands in the mobile phones sector, December 2012
                                                                                                                                        • Correspondence analysis
                                                                                                                                          • Brand attitudes
                                                                                                                                            • Figure 30: Attitudes by mobile phones brand, December 2012
                                                                                                                                          • Brand personality
                                                                                                                                            • Figure 31: Mobile phones brand personality – macro image, December 2012
                                                                                                                                            • Figure 32: Mobile phones brand personality – micro image, December 2012
                                                                                                                                          • Brand experience
                                                                                                                                            • Figure 33: Mobile phones brand usage, December 2012
                                                                                                                                            • Figure 34: Satisfaction with various mobile phones brands, December 2012
                                                                                                                                            • Figure 35: Consideration of mobile phones brands, December 2012
                                                                                                                                            • Figure 36: Consumer perceptions of current mobile phones brand performance, December 2012
                                                                                                                                            • Figure 37: Mobile phones brand recommendation – Net Promoter Score, December 2012
                                                                                                                                          • Brand index
                                                                                                                                            • Figure 38: Mobile phones brand index, December 2012
                                                                                                                                            • Figure 39: Mobile phones brand index vs. recommendation, December 2012
                                                                                                                                          • Target group analysis
                                                                                                                                            • Figure 40: Target groups, December 2012
                                                                                                                                            • Figure 41: Mobile phones brand usage, by target groups, December 2012
                                                                                                                                          • Group One – Conformists
                                                                                                                                            • Group Two – Simply the Best
                                                                                                                                              • Group Three – Shelf Stalkers
                                                                                                                                                • Group Four – Habitual Shoppers
                                                                                                                                                  • Group Five – Individualists
                                                                                                                                                  • Brand Communication and Promotion

                                                                                                                                                    • Key points
                                                                                                                                                      • Adspend dominated by premium brands
                                                                                                                                                        • Figure 42: Top 10 companies by adspend on mobile phones and smartphones, 2008-12
                                                                                                                                                      • Retailers account for just 15% of total 2012 adspend
                                                                                                                                                        • Figure 43: Proportion of adspend attributable to manufacturers, operators and retailers in the top 20 companies by spend on mobile devices or mobile services, 2008-12
                                                                                                                                                    • Smartphone OS Owned by Consumers

                                                                                                                                                      • Key points:
                                                                                                                                                        • Android now on nearly half of smartphones
                                                                                                                                                          • Figure 44: Operating system running on consumers’ smartphones, November 2012
                                                                                                                                                        • iOS attracts a younger base
                                                                                                                                                          • Figure 45: Ownership of a smartphone OS, by age, November 2012
                                                                                                                                                          • Figure 46: Ownership of a smartphone OS, by gross annual household income, November 2012
                                                                                                                                                      • Most Valuable or Useful Smartphone Features

                                                                                                                                                        • Key points
                                                                                                                                                          • Traditional phone functions remain important
                                                                                                                                                            • Figure 47: Most useful or valuable features on a smartphone, November 2012
                                                                                                                                                          • Younger consumers substitute calling for social network access
                                                                                                                                                            • Figure 48: Consumers who list calling, texting, emailing or social networking as one of the most valuable or useful features on their smartphones, by age, November 2011
                                                                                                                                                          • Android’s mixed pedigree shows in lack of enthusiasm for smartphone features
                                                                                                                                                            • Figure 49: Interest in smartphone features and mobile features, by smartphone operating system, November 2012
                                                                                                                                                          • Areas of interest for iOS, BlackBerry and Windows Phone
                                                                                                                                                            • Figure 50: Consumer interest in smartphone and mobile features, by smartphone operating system, November 2012
                                                                                                                                                        • Important Factors in Purchasing a Smartphone

                                                                                                                                                          • Key points
                                                                                                                                                            • Handset branding remains important
                                                                                                                                                              • Figure 51: Important factors that contributed to the choice of consumers’ most recently purchased smartphone, November 2012
                                                                                                                                                            • 25-34s most likely to just dive in
                                                                                                                                                              • Figure 52: Proportion of consumers who list cost consideration and the ability to test a phone in store as important factors contributing to the choice of their most recent device, by age, November 2012
                                                                                                                                                            • In-store tests benefit from salesperson input
                                                                                                                                                              • Windows Phone handsets would particularly benefit from in-store recommendations
                                                                                                                                                                • Figure 53: Importance of the brand of the manufacturer, cost considerations and the recommendations of a salesman in the purchase of consumers most recently obtained smartphone, by device OS, November 2012
                                                                                                                                                            • Reasons That Have Stopped Consumers Buying Smartphones

                                                                                                                                                              • Key points
                                                                                                                                                                • Lack of necessity becomes primary hindrance to upgrades
                                                                                                                                                                  • Figure 54: Reasons that have prevented consumers buying smartphones, November 2012
                                                                                                                                                                • Cost primarily a concern to younger consumers
                                                                                                                                                                  • Figure 55: Top six reasons that have prevented consumers purchasing smartphones, by age, November 2012
                                                                                                                                                                • High crossover in price considerations suggests ample room in the market for budget operator
                                                                                                                                                                • Attitudes Towards Basic Mobile Phones

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Smartphone subsidies support perception of poor value for money contracts
                                                                                                                                                                      • Figure 56: Attitudes towards basic mobile phones, November 2012
                                                                                                                                                                    • Women best shot for discount plans
                                                                                                                                                                      • Younger consumers are more likely to think basic mobile phones would last longer
                                                                                                                                                                        • Figure 57: Agreement with the statement “I think basic mobile phones will last longer than smartphones”, by age, November 2012
                                                                                                                                                                      • Dislike of devices may be based on fear of the unknown
                                                                                                                                                                      • Appendix – Market Size and Forecast

                                                                                                                                                                          • Figure 58: Value of mobile phone sales, 2009-17
                                                                                                                                                                      • Appendix – Brand Research

                                                                                                                                                                          • Figure 59: Brand usage, December 2012
                                                                                                                                                                          • Figure 60: Brand commitment, December 2012
                                                                                                                                                                          • Figure 61: Brand momentum, December 2012
                                                                                                                                                                          • Figure 62: Brand diversity, December 2012
                                                                                                                                                                          • Figure 63: Brand satisfaction, December 2012
                                                                                                                                                                          • Figure 64: Brand recommendation, December 2012
                                                                                                                                                                          • Figure 65: Brand attitude, December 2012
                                                                                                                                                                          • Figure 66: Brand image – macro image, December 2012
                                                                                                                                                                          • Figure 67: Brand image – micro image, December 2012
                                                                                                                                                                          • Figure 68: Profile of target groups, by demographics, December 2012
                                                                                                                                                                          • Figure 69: Psychographic segmentation, by target groups, December 2012
                                                                                                                                                                          • Figure 70: Brand usage, by target groups, December 2012
                                                                                                                                                                        • Brand index
                                                                                                                                                                          • Figure 71: Brand index, December 2012
                                                                                                                                                                      • Appendix – Smartphone OS Used by Consumers

                                                                                                                                                                          • Figure 72: Operating system running on consumers’ smartphones, November 2012
                                                                                                                                                                          • Figure 73: Smartphone operating system, by demographics, November 2012
                                                                                                                                                                      • Appendix – Most Useful or Valuable Smartphone Features

                                                                                                                                                                          • Figure 74: Most useful or valuable features on a smartphone, November 2012
                                                                                                                                                                          • Figure 75: Most useful or valuable features on a smartphone, by most popular useful or valuable features on smartphones, November 2012
                                                                                                                                                                          • Figure 76: Most useful or valuable features on a smartphone, by next most popular useful or valuable features on smartphones, November 2012
                                                                                                                                                                          • Figure 77: Most useful or valuable features on a smartphone, by smartphone operating system, November 2012
                                                                                                                                                                          • Figure 78: Most popular useful or valuable features on smartphones, by demographics, November 2012
                                                                                                                                                                          • Figure 79: Next most popular useful or valuable features on smartphones, by demographics, November 2012
                                                                                                                                                                      • Appendix – Important Factors in Purchasing a Smartphone

                                                                                                                                                                          • Figure 80: Important factors contributing to the choice of consumer’s most recently purchased smartphone, November 2012
                                                                                                                                                                          • Figure 81: Important factors contributing to the choice of consumer’s most recently purchased smartphone, by most important factors contributing to the choice of consumer’s most recently purchased smartphone, November 2012
                                                                                                                                                                          • Figure 82: Important factors contributing to the choice of consumer’s most recently purchased smartphone, by next most important factors contributing to the choice of consumer’s most recently purchased smartphone, November 2012
                                                                                                                                                                          • Figure 83: Important factors contributing to the choice of consumer’s most recently purchased smartphone, by smartphone operating system, November 2012
                                                                                                                                                                          • Figure 84: Most important factors contributing to the choice of consumer’s most recently purchased smartphone, by demographics, November 2012
                                                                                                                                                                          • Figure 85: Next most important factors contributing to the choice of consumer’s most recently purchased smartphone, by demographics, November 2012
                                                                                                                                                                      • Appendix – Reasons That Have Stopped Consumers Buying Smartphones

                                                                                                                                                                          • Figure 86: Reasons that have prevented consumers buying smartphones, November 2012
                                                                                                                                                                          • Figure 87: Reasons that have prevented consumers buying smartphones, by reasons that have prevented consumers buying smartphones, November 2012
                                                                                                                                                                          • Figure 88: Reasons that have prevented consumers buying smartphones, by demographics, November 2012
                                                                                                                                                                      • Appendix – Attitudes Towards Basic Mobile Phones

                                                                                                                                                                          • Figure 89: Attitudes toward basic mobile phones, November 2012
                                                                                                                                                                          • Figure 90: Attitudes towards basic mobile phones, by attitudes towards basic mobile phones, November 2012
                                                                                                                                                                          • Figure 91: Attitudes towards basic mobile phones, by reasons that have prevented consumers buying smartphones, November 2012
                                                                                                                                                                          • Figure 92: Reasons that have prevented consumers buying smartphones, by attitudes towards basic mobile phones, November 2012
                                                                                                                                                                          • Figure 93: Attitudes toward basic mobile phones, by demographics, November 2012

                                                                                                                                                                      Companies Covered

                                                                                                                                                                      • Apple Computer UK Ltd
                                                                                                                                                                      • Carl Zeiss Ltd.
                                                                                                                                                                      • Electronic Arts, Inc
                                                                                                                                                                      • Fédération Internationale de Football Association
                                                                                                                                                                      • Google UK
                                                                                                                                                                      • HTC
                                                                                                                                                                      • LG Electronics (UK)
                                                                                                                                                                      • Microsoft Ltd (UK)
                                                                                                                                                                      • Motorola Mobility Holdings
                                                                                                                                                                      • Nokia Corporation (UK)
                                                                                                                                                                      • Research in Motion Uk Ltd.
                                                                                                                                                                      • Samsung Electronics (UK) Ltd
                                                                                                                                                                      • Sony Corporation of America
                                                                                                                                                                      • Sony Ericsson Mobile Communications AB

                                                                                                                                                                      Mobile Phones - UK - February 2013

                                                                                                                                                                      £1,995.00 (Excl.Tax)