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Mobile Phones - US - February 2012

The convenience of communication on the go led millions of American consumers to adopt mobile phones, and as these devices have gained power and features they are playing an increasingly important role in people’s lives. Cellphone ownership has now reached 92% in the U.S. according to Experian Simmons data, a large number of consumers are adopting multipurpose smartphones and a growing number are relying heavily on phones as their primary way to make calls and even connect to the web.

These trends have helped fuel continued growth in the $39.5 billion mobile phone industry. The industry is extremely competitive, with a number of well-funded global players fighting for dominance. Maintaining a leading position is further challenged by the rapid upgrade cycle seen in the U.S.—where consumers have grown accustomed to swapping out phones quite quickly thanks to carrier subsidies—as well as a complex ecosystem where manufacturers must partner with carriers, software platform companies and even app developers to create successful offerings.

Mintel’s report will help companies navigate the many changing trends and drivers impacting the mobile phone market, discussing the following issues among others:

  • What factors are driving industry growth given near-universal penetration of mobile phones today?
  • What technologies and features are encouraging consumers to make upgrades and move to smartphones?
  • How is the changing carrier landscape impacting the mobile phone market?
  • How can manufacturers establish their own relationship with consumers given that carriers control much of their ongoing engagement and also typically drive the upgrade cycle?
  • What opportunities remain for manufacturers to upsell consumers to smartphones?
  • Are any opportunities still available for manufacturers to convert new customers?
  • What are consumers using phones for today?
  • How important are basic calling features today, and how much are consumers using advanced features like multimedia playback, app downloads and 3D?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                        • The market
                          • Smartphones drive a sales leap
                            • Figure 1: Fan chart forecast of U.S. mobile phone wholesale sales revenues, 2006-16
                          • Feature phones continue their decline
                            • Figure 2: U.S. mobile phone segmentation: smartphones vs. feature phones, at current prices, 2006-16
                          • Consumer costs may rise
                            • Platform battles continue
                              • Figure 3: Service carrier for smartphones and most recently acquired phone, October-November 2011
                            • Hardware vendors continue to consolidate
                              • Marketing messages can be complex
                                • The consumer
                                  • Age, income drive smartphone ownership
                                    • Figure 4: Smartphone vs. feature phone ownership by age, October-November 2011
                                  • Price, battery life drive choice
                                    • Significant usage differences seen for smartphones
                                      • Users love Apple, but own Samsung
                                        • Apps appeal to the young
                                          • What we think
                                          • Insights and Opportunities

                                            • Breaking the two-year cycle
                                              • Phones and tablets: Better together
                                              • Inspire Insights

                                                  • Inspire Trend: Minimize Me
                                                    • Inspire Trend: Why Buy?
                                                    • Market Size and Forecast

                                                      • Key points
                                                        • Smartphones go mainstream—and drive sales
                                                          • Still some room for average prices to climb
                                                            • Sales and forecast
                                                              • Figure 5: Total U.S. manufacturer to dealer sales and forecast for mobile phones, at current prices, 2006-16
                                                              • Figure 6: Total U.S. sales and forecast for mobile phone services, at inflation-adjusted prices, 2004-14
                                                              • Figure 7: Total U.S. unit sales and average unit pricing for mobile phones, 2006-12
                                                          • Market Drivers

                                                            • Key points
                                                              • Mobile phones now do it all
                                                                • Figure 8: Additional mobile phone services or features used in the last 30 days, by all cellular/mobile phone users, 2007-11
                                                                • Figure 9: Mobile phone features used in the last 30 days by smartphone users, October-November 2011
                                                              • Carriers seek to pass on costs
                                                                • Figure 10: Mobile phone carrier subscribed, 2007-11
                                                              • Phone platforms continue to battle
                                                                • Figure 11: Smartphone operating system market share for all users and recent acquirers, Q4 2011
                                                            • Competitive Context

                                                              • Key points
                                                                • Tablets: Competitors or cousins?
                                                                • Segment Performance

                                                                  • Key points
                                                                    • Smartphones take over
                                                                      • Figure 12: U.S. mobile phone sales at current prices, by segment, 2010 and 2012
                                                                      • Figure 13: U.S. mobile phone unit sales, by segment, 2010 and 2012
                                                                  • Segment Performance—Smartphones

                                                                    • Key points
                                                                      • Smartphones take the lead
                                                                        • Low prices help drive adoption, volume
                                                                          • Pushing price limits on the higher end
                                                                            • Sales and forecast
                                                                              • Figure 14: U.S. sales of smartphones, at current prices, 2006-16
                                                                              • Figure 15: U.S. unit sales and average prices of smartphones, at current prices, 2006-12
                                                                          • Segment Performance—Feature Phones

                                                                            • Key points
                                                                              • Sales continue to decline for basic phones
                                                                                • Prices to reach a plateau
                                                                                  • Sales and forecast
                                                                                    • Figure 16: U.S. sales of feature phones, at current prices, 2006-16
                                                                                    • Figure 17: U.S. unit sales and average prices of feature phones, at current prices, 2006-12
                                                                                • Retail Channels

                                                                                  • Key points
                                                                                    • Many choices for phone purchase
                                                                                      • Figure 18: Number of U.S. stores run by mobile phone service providers, 2011
                                                                                    • Support needs to be seamless
                                                                                    • Leading Companies

                                                                                      • Key points
                                                                                        • Overview
                                                                                          • Figure 19: Global mobile phone sales, by manufacturer, 2010-11
                                                                                          • Figure 20: U.S. mobile phone brand market share, by manufacturer, 2010-11
                                                                                      • Innovation and Innovators

                                                                                          • Aiming for the clouds
                                                                                            • Powering up
                                                                                              • New phones for photo buffs
                                                                                              • Marketing Strategies

                                                                                                • Key points
                                                                                                  • Overview
                                                                                                    • Television
                                                                                                      • Apple: Look who’s talking now
                                                                                                        • Figure 21: Apple iPhone TV ad, talking with Siri, 2011
                                                                                                      • AT&T promotes Samsung’s speed
                                                                                                        • Figure 22: AT&T/Samsung TV ad, coworkers ahead of the curve, 2011
                                                                                                      • BlackBerry aims for cool
                                                                                                        • Figure 23: RIM TV ad, DJ relies on BlackBerry bold, 2011
                                                                                                      • Verizon pushes Motorola along with Droid
                                                                                                        • Figure 24: Verizon Droid ad, 2011
                                                                                                      • Online advertising
                                                                                                      • Ownership and Spending

                                                                                                        • Key points
                                                                                                          • Cell phone ownership is near universal
                                                                                                            • Figure 25: Adult cell/wireless phones ownership, 2005-11
                                                                                                            • Figure 26: Cell/wireless phones, by key demographics, October 2010-June 2011
                                                                                                          • Smartphone ownership most strongly correlates with income
                                                                                                            • Figure 27: Cell phone ownership, feature phone vs. smartphone, by key demographics, October-November 2011
                                                                                                          • Average spend on mobile phones increases
                                                                                                            • Figure 28: Amount spent on most recent cell/wireless phone purchase, 2008 and 2011
                                                                                                            • Figure 29: Amount spent on most recent cell/wireless phone purchase, by key demographics, October 2010-June 2011
                                                                                                        • Purchase Drivers

                                                                                                          • Key points
                                                                                                            • Price, battery life dominant concerns in phone choice
                                                                                                              • Figure 30: Incidence of brand and select functions considered “very important” in mobile phone purchase, by gender, October-November 2011
                                                                                                              • Figure 31: Incidence of brand and select functions considered “very important” in mobile phone purchase, by age, October-November 2011
                                                                                                              • Figure 32: Incidence of brand and select functions considered “very important” in mobile phone purchase, by household income, October-November 2011
                                                                                                            • Phone size more important to women and low-income respondents
                                                                                                              • Figure 33: Incidence of screen and design factors considered “very important” in mobile phone purchase, by gender, October-November 2011
                                                                                                              • Figure 34: Incidence of screen and design factors considered “very important” in mobile phone purchase, by age, October-November 2011
                                                                                                              • Figure 35: Incidence of screen and design factors considered “very important” in mobile phone purchase, by household income, October-November 2011
                                                                                                            • Internet access highly valued by the young
                                                                                                              • Figure 36: Incidence of network and GPS factors considered “very important” in mobile phone purchase, by gender, October-November 2011
                                                                                                              • Figure 37: Incidence of network and GPS factors considered “very important” in mobile phone purchase, by age, October-November 2011
                                                                                                              • Figure 38: Incidence of network and GPS factors considered “very important” in mobile phone purchase, by household income, October-November 2011
                                                                                                            • Younger respondents most likely to replace phones often
                                                                                                              • Figure 39: Attitudes to mobile phone cost, screen size and replacement cycle, by age, October-November 2011
                                                                                                              • Figure 40: Attitudes to mobile phone cost, screen size and replacement cycle, by household income, October-November 2011
                                                                                                          • Phone Usage

                                                                                                            • Key points
                                                                                                              • Few younger people rely on phones for basic calling only
                                                                                                                • Figure 41: Incidence of simple phone use, basic calling only and emergency use only, by key demographics, October 2010-June 2011
                                                                                                              • Texting, photos most popular phone uses
                                                                                                                • Figure 42: Additional mobile phone services or features used in the last 30 days by all cellular/mobile phone users, by age, October 2010-June 2011
                                                                                                                • Figure 43: Additional mobile phone services or features used in the last 30 days by all cellular/mobile phone users, by household income, October 2010-June 2011
                                                                                                              • Smartphone users do even more with phones
                                                                                                                • Figure 44: Mobile phone features used in the last 30 days by smartphone users, by age, October-November 2011
                                                                                                                • Figure 45: Mobile phone features used in the last 30 days by smartphone users, by household income, October-November 2011
                                                                                                            • Phone Operating System Preferences

                                                                                                              • Key points
                                                                                                                • Android prevails, but affluent more likely to choose iPhone than most
                                                                                                                  • Figure 46: OS currently on primary cell phone, by gender, October-November 2011
                                                                                                                  • Figure 47: OS currently on primary cell phone, by age, October-November 2011
                                                                                                                  • Figure 48: OS currently on primary cell phone, by household income, October-November 2011
                                                                                                                • iOS, Android seemingly equal on ease of use
                                                                                                                  • Figure 49: OS perceived as easiest to use, by age, October-November 2011
                                                                                                                  • Figure 50: OS perceived as easiest to use, by household income, October-November 2011
                                                                                                              • Brand Preference

                                                                                                                • Key points
                                                                                                                  • Samsung captures a large and diverse audience
                                                                                                                    • Figure 51: Mobile phone brand owned, by age, October 2010-June 2011
                                                                                                                    • Figure 52: Mobile phone brand owned, by household income, October 2010-June 2011
                                                                                                                  • Apple leads in positive perception, Samsung in ownership
                                                                                                                    • Figure 53: Which mobile phone brand is preferred and which is considered to be most cutting edge, October-November 2011
                                                                                                                    • Figure 54: Which mobile phone brand is preferred, by age, October-November 2011
                                                                                                                    • Figure 55: Which mobile phone brand is preferred, by household income, October-November 2011
                                                                                                                  • Apple, HTC considered most cutting edge
                                                                                                                    • Figure 56: Mobile phone brand perceived as most cutting edge, by age, October-November 2011
                                                                                                                    • Figure 57: Mobile phone brand perceived as most cutting edge, by household income, October-November 2011
                                                                                                                • Attitudes and Motivations

                                                                                                                  • Key points
                                                                                                                    • Consumers interested in doing more with phones
                                                                                                                      • Figure 58: Attitudes and opinions about cell phones, by age, October 2010-June 2011
                                                                                                                      • Figure 59: Attitudes and opinions about cell phones, by household income, October 2010-June 2011
                                                                                                                    • Interest in phones as gifts for children varies with age group
                                                                                                                      • Figure 60: Attitudes to cell phones as a gift for children, by gender of parent, October-November 2011
                                                                                                                      • Figure 61: Attitudes to cell phones as a gift for children, by age of parent, October-November 2011
                                                                                                                    • Loyalty to phone platforms is not intense
                                                                                                                      • Figure 62: Attitudes to mobile phone OS, by gender, October-November 2011
                                                                                                                      • Figure 63: Attitudes to mobile phone OS, by age, October-November 2011
                                                                                                                  • Advanced Phone Usage

                                                                                                                    • Key points
                                                                                                                      • Interest in apps peaks with the young
                                                                                                                        • Figure 64: Application downloading, by key demographics, October-November 2011
                                                                                                                      • Comparatively few users pay for downloads
                                                                                                                        • Figure 65: Lack of participation in paid application downloading, by key demographics, October-November 2011
                                                                                                                      • 3-D phone capabilities still not in the mainstream
                                                                                                                        • Figure 66: Interest in 3-D cell phones, by age, October-November 2011
                                                                                                                        • Figure 67: Interest in 3-D cell phones, by household income, October-November 2011
                                                                                                                    • Teens and Kids

                                                                                                                      • Key points
                                                                                                                        • Teen phone ownership continues to rise
                                                                                                                          • Figure 68: Teen cell/wireless phones ownership, 2006-11
                                                                                                                          • Figure 69: Teen cell/wireless phones ownership, by gender and age, April 2010-June 2011
                                                                                                                          • Figure 70: Teen cell/wireless phone brands owned, by gender and age, April 2010-June 2011
                                                                                                                        • Texting, photos important applications for teens
                                                                                                                          • Figure 71: Additional mobile phone services or features used by teens in the last 30 days, by gender and age, April 2010-June 2011
                                                                                                                          • Figure 72: Teen attitudes and opinions about cell phones, by gender and age, April 2010-June 2011
                                                                                                                        • Opportunity remains to grow phone usage for children
                                                                                                                          • Figure 73: Kids cell/wireless phones ownership, 2008-11
                                                                                                                          • Figure 74: Kids cell/wireless phones ownership, by gender and age, April 2010-June 2011
                                                                                                                          • Figure 75: Mobile phone features used by kids, by gender and age, April 2010-June 2011
                                                                                                                      • Impact of Race/Hispanic Origin

                                                                                                                        • Key points
                                                                                                                          • Asians, Hispanics strong adopters of mobile technologies
                                                                                                                            • Figure 76: Cell phone ownership, feature phone vs. smartphone, by race/Hispanic origin, October-November 2011
                                                                                                                            • Figure 77: Amount spent on most recent cell/wireless phone purchase, by race/Hispanic origin, October 2010-June 2011
                                                                                                                            • Figure 78: Mobile phone brand owned, by race/Hispanic origin, October 2010-June 2011
                                                                                                                          • Blacks, Hispanics value smartphone entertainment features
                                                                                                                            • Figure 79: Additional mobile phone services or features used in the last 30 days by all cellular/mobile phone users, by race/Hispanic origin, October 2010-June 2011
                                                                                                                            • Figure 80: Mobile phone features used in the last 30 days by smartphone users, by race/Hispanic origin, October-November 2011
                                                                                                                        • Custom Consumer Groups

                                                                                                                            • Interest in advanced phone features rises with education
                                                                                                                              • Figure 81: Attitudes and opinions about cell phones, all vs. college graduates, October 2010-June 2011
                                                                                                                            • AT&T leads in iOS owners, Verizon in Android
                                                                                                                                • Figure 82: OS currently on primary smartphone by service carrier for primary cell phone, October-November 2011
                                                                                                                                • Figure 83: App downloading, by service carrier for primary cell phone, October-November 2011
                                                                                                                                • Figure 84: App downloading by service carrier for primary cell phone, October-November 2011
                                                                                                                            • Appendix: Other Useful Consumer Tables

                                                                                                                                • By gender
                                                                                                                                  • Figure 85: Which mobile phone brand is preferred, by gender, October-November 2011
                                                                                                                                  • Figure 86: Mobile phone brand perceived as most cutting edge, by gender, October-November 2011
                                                                                                                                • By household income
                                                                                                                                  • Figure 87: Attitudes to mobile phone OS, by household income, October-November 2011
                                                                                                                              • Appendix: Trade Associations

                                                                                                                                Companies Covered

                                                                                                                                • Apple, Inc
                                                                                                                                • Google, Inc.
                                                                                                                                • HTC
                                                                                                                                • LG Electronics Inc (USA)
                                                                                                                                • Microsoft USA
                                                                                                                                • Motorola Mobility Holdings
                                                                                                                                • Nokia Corporation (US)
                                                                                                                                • Research In Motion (USA)
                                                                                                                                • Samsung Electronics (USA)
                                                                                                                                • Verizon Communications Inc.

                                                                                                                                Mobile Phones - US - February 2012

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