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Mobile Phones - US - June 2010

As of December 2009, 91% of American consumers own a cellphone. Despite the evident maturity of the mobile phone industry, the market has avoided the traditional consolidation and commoditization seen in many other tech products. Indeed, as phones become more and more powerful, they are taking a larger role in peoples’ lives and going far beyond voice, or even online communication.

Thanks to “all you can eat” service plans and new smartphone platforms that support a broad range of applications, consumers can use their phones for entertainment, information, news, shopping and more, making the cellphone sector a critical one for companies in virtually all industries to understand and explore.

This report will provide a detailed analysis of this important market, including:

  • Historic and projected cellphone sales (including both unit sales and revenues based on dealer prices) will be provided for 2004 through 2014, along with segmented sales trends for both smartphones and standard cellphones
  • Key factors driving the mobile phone industry will be discussed, including how the maturity and near-universal market penetration of cellphones impacts sector growth, new consumer usage models for cellphones, the impending launch of next-generation wireless networks, the emergence of new operating systems and the impact of a long-lasting recession to name a few
  • A detailed overview of consumer behavior, attitudes and preferences regarding mobile phones, including brand ownership by demographic, features driving product choice and how consumers are using their phones.
  • Thousands of consumer comments on leading social media sites have been analyzed and measured to provide a direct view of consumer sentiment outside the confines of a study

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Table of contents

  1. Scope and Themes

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

                        • New growth potential as a mature industry faces transition
                          • New models, new competition
                            • From voice to web to apps
                              • Android kicks up a storm in platform war
                                • 4G at last
                                  • Motorola clings to lead in installed base
                                    • Apple and Android lead in social media buzz about apps and OS
                                      • Strong potential for brand confusion in marketing crush
                                        • Younger, higher-income respondents lead advanced phone usage
                                          • Majority spent less than $60 on phone
                                            • Younger consumers driven by features more than shape of phone
                                            • Insights and Opportunities

                                              • Introduction
                                                • Ker-ching! Adding up the value of slaying dedicated handhelds
                                                  • The power of social networking in your hand
                                                    • TV moves from PCs to phones
                                                      • It pays to accessorize
                                                      • Inspire Insights

                                                        • Customization
                                                          • What's it about?
                                                            • What we've seen
                                                              • Addressing individual needs in every phone
                                                              • Market Size and Forecast

                                                                • Key points
                                                                  • High penetration leads to stabilizing growth
                                                                    • Smartphone, 4G transition to drive future sales
                                                                      • Figure 1: U.S. supplier sales and forecast for mobile phones, current prices, 2004-14
                                                                      • Figure 2: U.S. supplier sales and forecast for mobile phones, at inflation-adjusted prices, 2004-14
                                                                      • Figure 3: Total U.S. unit shipments and average price for mobile phones, 2004-10
                                                                  • Competitive Context

                                                                    • PCs more and more portable
                                                                      • Multiple functions lead to new competition
                                                                      • Segment Performance

                                                                        • Key points
                                                                          • Smartphones on the rise, basic phones in decline
                                                                            • Figure 4: U.S. supplier sales of mobile phones at current prices, by segment, 2008 and 2010
                                                                            • Figure 5: U.S. mobile phone unit shipments, by segment, 2008 and 2010
                                                                        • Segment Performance—Smartphones

                                                                          • Key points
                                                                            • iPhone kicks off smartphone craze
                                                                              • More than just a phone
                                                                                • Platform consolidation on the way
                                                                                    • Figure 6: U.S. supplier sales and forecast for smarpthones, at current prices, 2004-14
                                                                                    • Figure 7: U.S. supplier sales and forecast for smartphones, at inflation-adjusted prices, 2004-14
                                                                                    • Figure 8: U.S. unit shipments and average wholesale prices of smartphones, at current prices, 2004-10
                                                                                • Segment Performance—Basic Phones

                                                                                  • Key points
                                                                                    • Basic phones lose ground as carriers look beyond voice
                                                                                      • The carrier’s darling
                                                                                        • Basic usage still the norm
                                                                                          • Figure 9: Attitudes toward basic cell phone usage, by gender, age and household income, November 2008-December 2009
                                                                                        • Potential sales via multiple phone ownership
                                                                                            • Figure 10: U.S. supplier sales and forecast for basic phones, at current prices, 2004-10
                                                                                            • Figure 11: U.S. supplier sales and forecast for basic phones, at inflation-adjusted prices, 2004-14
                                                                                            • Figure 12: U.S. unit shipments and average wholesale prices for basic phones, at current prices, 2004-10
                                                                                        • Retail Channels

                                                                                          • Available at (every) store very near you
                                                                                            • Figure 13: Number of U.S. stores run by cell phone service providers and related companies, 2010
                                                                                          • Online also plays a critical role
                                                                                          • Market Drivers

                                                                                            • Key points
                                                                                              • Continued shift from voice to web
                                                                                                • An end to the all-you-can-eat data buffet?
                                                                                                  • See and say
                                                                                                    • Figure 14: Interest in video calling on cell phone, by gender, age and household income, March 2010
                                                                                                  • Platform wars
                                                                                                    • Figure 15: Platform share of installed base of smartphones, among five leading brands, September 2009-February 2010
                                                                                                  • Role of app developers
                                                                                                    • 4G
                                                                                                      • Consumers delay upgrades but keep service during recession
                                                                                                        • Figure 16: Disposable personal income and personal consumption, 2006-10
                                                                                                    • Leading Companies and Brand Qualities

                                                                                                      • Key points
                                                                                                        • Leading companies
                                                                                                          • Trended ownership by brand
                                                                                                              • Figure 17: Brand owned, 2002/03-2008/09
                                                                                                            • iPhone most popular phone in 2009
                                                                                                              • Figure 18: Most popular phones in use in the U.S., 2009
                                                                                                            • 18-24s favor LG, Samsung, 25-34s Apple and RIM
                                                                                                              • Figure 19: Brand of mobile phone owned, by age, November 2008-December 2009
                                                                                                              • Figure 20: Brand of mobile phone owned, by household income, November 2008-December 2009
                                                                                                              • Figure 21: Brand of mobile phone owned—teens, by gender and age, November 2008-December 2009
                                                                                                            • Nokia lags further with online consumers
                                                                                                              • Figure 22: Brand of primary mobile phone—online respondents, March 2010
                                                                                                            • Brand qualities
                                                                                                              • Apple
                                                                                                                • Google
                                                                                                                  • LG
                                                                                                                    • Microsoft
                                                                                                                      • Motorola
                                                                                                                        • Nokia
                                                                                                                          • Research in Motion/RIM
                                                                                                                            • Samsung
                                                                                                                            • Social Media Buzz about OS and App Stores

                                                                                                                                • Key points
                                                                                                                                  • Discussion of manufacturers and brands
                                                                                                                                    • Apple far in the lead in mentions by brand
                                                                                                                                      • Figure 23: Total app store/OS mentions, by brand, January 2010-June 2010
                                                                                                                                    • Android passes Blackberry in brand mentions in late 2009
                                                                                                                                      • Figure 24: Trended mentions, by brand, October 2009-June 2010
                                                                                                                                    • Major feature discussions
                                                                                                                                      • Natural approach finds games most buzzed about
                                                                                                                                          • Figure 25: Total mentions, by primary application/topic, January 2010-June 2010
                                                                                                                                        • Games and social networking pulling ahead in 2010
                                                                                                                                          • Figure 26: Total mentions, by primary application/topic, monthly trends October 2009-June 2010
                                                                                                                                        • Apple leads in gaming mentions, Android in social networking
                                                                                                                                          • Figure 27: Total mentions of application/topic, by OS, January 2010 – June 2010
                                                                                                                                        • Buzz primarily positive
                                                                                                                                          • Figure 28: Total mentions of application/topic, positive and negative, by OS, January 2010-June 2010
                                                                                                                                      • Innovation and Innovators

                                                                                                                                          • HTC
                                                                                                                                            • Modu
                                                                                                                                              • A hotspot in your pocket
                                                                                                                                              • Advertising and Promotion

                                                                                                                                                  • Figure 29: Advertising spending by leading cell phone manufacturers, 2008 and 2009
                                                                                                                                              • Print Advertising

                                                                                                                                                • Television Advertising

                                                                                                                                                    • Apple leverages apps
                                                                                                                                                      • Figure 30: Apple iPhone ad, 2010
                                                                                                                                                    • BlackBerry tries to break out of its business suit
                                                                                                                                                      • Figure 31: BlackBerry/RIM ad, 2009
                                                                                                                                                    • HTC makes it all about you
                                                                                                                                                      • Figure 32: HTC ad, 2009
                                                                                                                                                    • Motorola puts it all in your hand
                                                                                                                                                      • Figure 33: Motorola ad, 2009
                                                                                                                                                  • Online Advertising

                                                                                                                                                    • Ownership and Intent to Purchase

                                                                                                                                                      • Key points
                                                                                                                                                        • Adult ownership approaches 90%
                                                                                                                                                          • Figure 34: Trended ownership, 2000/01-2008/09
                                                                                                                                                          • Figure 35: Cell phone penetration, by gender, age and household income, December 2008-November 2009
                                                                                                                                                        • One in six in the market for new phone
                                                                                                                                                          • Figure 36: Cell phone plan purchase intent, by age, March 2010
                                                                                                                                                        • High levels of interest in Android seen in smartphone owners
                                                                                                                                                          • Figure 37: Smartphone platform purchase interest, March 2010
                                                                                                                                                      • Spend

                                                                                                                                                        • Key points
                                                                                                                                                          • Over half of respondents spent less than $60 on their last phone
                                                                                                                                                            • Figure 38: Cost of most recently purchased cell phone, by gender, age and household income, December 2008-November 2009
                                                                                                                                                            • Figure 39: Cost of most recently purchased cell phone, by age, March 2010
                                                                                                                                                        • Purchasing Behavior and Motivations

                                                                                                                                                          • Key points
                                                                                                                                                            • 20% of 18-34s have spent $200 or more
                                                                                                                                                              • Figure 40: Attitudes on spending on cell phones, by age, March 2010
                                                                                                                                                              • Figure 41: Attitudes on spending on cell phones, by household income, March 2010
                                                                                                                                                            • Cost still leading factor selected
                                                                                                                                                              • Figure 42: Overall factors driving cell phone choice, March 2010
                                                                                                                                                              • Figure 43: Overall factors driving cell phone choice, by age, March 2010
                                                                                                                                                              • Figure 44: Overall factors driving cell phone choice, by household income, March 2010
                                                                                                                                                            • Phone size, style matter more for older users
                                                                                                                                                              • Figure 45: Hardware features driving cell phone choice, March 2010
                                                                                                                                                              • Figure 46: Hardware features driving cell phone choice, by gender, March 2010
                                                                                                                                                              • Figure 47: Hardware features driving cell phone choice, by age, March 2010
                                                                                                                                                          • Attitudes and Motivations

                                                                                                                                                            • Key points
                                                                                                                                                              • Younger users most open to cell phones’ potential
                                                                                                                                                                • Figure 48: General attitudes on cell phones, by age, November 2008-December 2009
                                                                                                                                                                • Figure 49: General attitudes toward cell phones, by household income, November 2008-December 2009
                                                                                                                                                              • Older respondents prefer clamshells
                                                                                                                                                                • Figure 50: Attitudes on phone hardware, by age, March 2010
                                                                                                                                                              • Younger users most positive on mobile web
                                                                                                                                                                • Figure 51: Attitudes on web usage on phones, by age, March 2010
                                                                                                                                                                • Figure 52: Attitudes on web usage on phones, by household income, March 2010
                                                                                                                                                            • Teen and Kid Usage

                                                                                                                                                              • Room to grow in adoption by kids and teens
                                                                                                                                                                • Figure 53: Penetration of cell phone ownership, kids and teens, December 2008-November 2009
                                                                                                                                                              • Teens embrace new cell phone capabilities
                                                                                                                                                                • Figure 54: Teen attitudes about cell phones, November 2008-December 2009
                                                                                                                                                            • Smartphones and Apps

                                                                                                                                                              • Key points
                                                                                                                                                                • Smartphone ownership highest with young and high-income consumers
                                                                                                                                                                  • Figure 55: Type of phone owned and availability of advanced capabilities, by age, March 2010
                                                                                                                                                                  • Figure 56: Type of phone owned and availability of advanced capabilities, by household income, March 2010
                                                                                                                                                                • App downloading limited, but frequent among those who do download
                                                                                                                                                                  • Figure 57: Incidence of app downloading, by gender, age, household income and race/Hispanic origin, March 2010
                                                                                                                                                                • Only one in six see app availability as a driver in next phone purchase
                                                                                                                                                                  • Figure 58: General attitudes on apps, March 2010
                                                                                                                                                                • Engagement with apps limited
                                                                                                                                                                  • Figure 59: Positive attitudes toward cell phone apps, March 2010
                                                                                                                                                                • A noticeable share of users lose interest in apps
                                                                                                                                                                  • Figure 60: Negative attitudes on cell phone apps, March 2010
                                                                                                                                                              • Cluster Analysis

                                                                                                                                                                  • Websters
                                                                                                                                                                    • Demographics
                                                                                                                                                                      • Characteristics
                                                                                                                                                                        • Opportunity
                                                                                                                                                                          • Flippers
                                                                                                                                                                            • Demographics
                                                                                                                                                                              • Characteristics
                                                                                                                                                                                • Opportunity
                                                                                                                                                                                  • Basics
                                                                                                                                                                                    • Demographics
                                                                                                                                                                                      • Characteristics
                                                                                                                                                                                        • Opportunity
                                                                                                                                                                                          • Cluster characteristics
                                                                                                                                                                                            • Figure 61: Mobile phone clusters, March 2010
                                                                                                                                                                                            • Figure 62: Hardware features driving phone selection, by mobile phone clusters, March 2010
                                                                                                                                                                                            • Figure 63: Attitudes toward phone style and pricing, by mobile phone clusters, March 2010
                                                                                                                                                                                            • Figure 64: Purchases of apps and media, by mobile phone clusters, March 2010
                                                                                                                                                                                            • Figure 65: Price paid for most recent phone, by mobile phone clusters, March 2010
                                                                                                                                                                                          • Cluster demographics
                                                                                                                                                                                            • Figure 66: Mobile phone clusters, by gender, March 2010
                                                                                                                                                                                            • Figure 67: Mobile phone clusters, by age, March 2010
                                                                                                                                                                                            • Figure 68: Mobile phone clusters, by household income, March 2010
                                                                                                                                                                                            • Figure 69: Mobile phone clusters, by race, March 2010
                                                                                                                                                                                            • Figure 70: Mobile phone clusters, by Hispanic origin, March 2010
                                                                                                                                                                                          • Cluster methodology
                                                                                                                                                                                          • Impact of Race/Hispanic Origin

                                                                                                                                                                                            • Key points
                                                                                                                                                                                              • Asians, Hispanics spend most on phones
                                                                                                                                                                                                • Figure 71: Ownership of mobile phones, by race/Hispanic origin, November 2008-December 2009
                                                                                                                                                                                                • Figure 72: Mean spend on mobile phones, by race/Hispanic origin, November 2008-December 2009
                                                                                                                                                                                                • Figure 73: Brand of phone owned, by race/Hispanic origin, November 2008-December 2009
                                                                                                                                                                                                • Figure 74: Hardware features driving cell phone choice, by race/Hispanic origin, March 2010
                                                                                                                                                                                                • Figure 75: Web feature usage on phones, by race/Hispanic origin, March 2010
                                                                                                                                                                                                • Figure 76: Type of phone owned and availability of advanced capabilities, by race/Hispanic origin, March 2010
                                                                                                                                                                                                • Figure 77: Incidence of app downloads, by race/Hispanic origin, March 2010
                                                                                                                                                                                                • Figure 78: Positive attitudes on cell phone apps, by race/Hispanic origin, March 2010
                                                                                                                                                                                            • Custom Consumer Groups

                                                                                                                                                                                              • Families, urbanites most likely to use smartphones and the web
                                                                                                                                                                                                • Figure 79: Incidence of cell phone content downloads, by presence of children, March 2010
                                                                                                                                                                                                • Figure 80: Web feature usage on phones, by presence of children, March 2010
                                                                                                                                                                                                • Figure 81: Web feature usage on phones, urban vs. suburban vs. rural, March 2010
                                                                                                                                                                                                • Figure 82: Type of phone owned and availability of advanced capabilities, by presence of children, March 2010
                                                                                                                                                                                                • Figure 83: Type of phone owned and availability of advanced capabilities, urban vs. suburban vs. rural, March 2010
                                                                                                                                                                                            • Appendix: Other Useful Consumer Tables

                                                                                                                                                                                              • Gender differences
                                                                                                                                                                                                • Figure 84: Attitudes on phone hardware, by gender, March 2010
                                                                                                                                                                                                • Figure 85: Web feature usage on phones, by gender, November 2008-December 2009
                                                                                                                                                                                                • Figure 86: Attitudes on spending on cell phones, by gender, March 2010
                                                                                                                                                                                                • Figure 87: Type of phone owned and availability of advanced capabilities, by gender, March 2010
                                                                                                                                                                                              • Differences by household income
                                                                                                                                                                                                • Figure 88: Incidence of cell phone content downloads, by household income, March 2010
                                                                                                                                                                                                • Figure 89: Cost of most recently purchased cell phone, by household income, March 2010
                                                                                                                                                                                                • Figure 90: Hardware features driving cell phone choice, by household income, March 2010
                                                                                                                                                                                            • Appendix: Trade Associations

                                                                                                                                                                                              Companies Covered

                                                                                                                                                                                              • Alliance for Telecommunications Industry Solutions (ATIS)
                                                                                                                                                                                              • Amazon North America
                                                                                                                                                                                              • Apple, Inc
                                                                                                                                                                                              • AT&T Inc.
                                                                                                                                                                                              • Bang & Olufsen
                                                                                                                                                                                              • Best Buy stores (USA)
                                                                                                                                                                                              • Bureau of Economic Analysis
                                                                                                                                                                                              • CDMA Development Group (CDG)
                                                                                                                                                                                              • Cellular Telecommunications and Internet Association (CTIA)
                                                                                                                                                                                              • Consumer Electronics Association
                                                                                                                                                                                              • Dell Inc.
                                                                                                                                                                                              • Electronic Industries Alliance
                                                                                                                                                                                              • Enterprise Wireless Alliance (EWA)
                                                                                                                                                                                              • Facebook, Inc.
                                                                                                                                                                                              • Federal Communications Commission (FCC)
                                                                                                                                                                                              • Ford Motor Company (USA)
                                                                                                                                                                                              • Global Wireless Education Consortium (GWEC)
                                                                                                                                                                                              • Google, Inc.
                                                                                                                                                                                              • GSM Association (GSMA)
                                                                                                                                                                                              • Hewlett-Packard Company
                                                                                                                                                                                              • HTC
                                                                                                                                                                                              • Imagination Technologies Ltd
                                                                                                                                                                                              • Kyocera International Inc.
                                                                                                                                                                                              • LG Electronics Inc (USA)
                                                                                                                                                                                              • Microsoft USA
                                                                                                                                                                                              • Motorola Mobility Holdings
                                                                                                                                                                                              • National Telecommunications and Information Association (NTIA)
                                                                                                                                                                                              • Netflix, Inc.
                                                                                                                                                                                              • Nextel Communications Inc.
                                                                                                                                                                                              • Nintendo of America Inc.
                                                                                                                                                                                              • Nokia Corporation (US)
                                                                                                                                                                                              • Palm Inc.
                                                                                                                                                                                              • RadioShack Corporation
                                                                                                                                                                                              • Research In Motion (USA)
                                                                                                                                                                                              • Rural Cellular Association (RCA)
                                                                                                                                                                                              • Samsung Electronics (USA)
                                                                                                                                                                                              • Sanyo North America Corporation
                                                                                                                                                                                              • Skype Technologies S.A.
                                                                                                                                                                                              • Sony Ericsson (USA)
                                                                                                                                                                                              • Sprint Nextel Corporation
                                                                                                                                                                                              • T-Mobile USA
                                                                                                                                                                                              • Telecommunications Industry Association (TIA)
                                                                                                                                                                                              • Twitter, Inc.
                                                                                                                                                                                              • U.S. Bureau of Labor Statistics
                                                                                                                                                                                              • Verizon Communications Inc.
                                                                                                                                                                                              • Walmart Stores (USA)
                                                                                                                                                                                              • YouTube, Inc.

                                                                                                                                                                                              Mobile Phones - US - June 2010

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