Mobile Phones - US - June 2017

"From 2013-16, over 200 million phones sold in the US annually, and Mintel estimates that sales will stand at a record of 204 million units in 2017. Phone manufacturers have successfully and consistently driven upgrades via superior cameras, 4G (fourth-generation wireless network) chips, faster CPUs (central processing units), improved graphics, increased storage space, and larger screens. However, given that the majority of adults (75%, not shown) own a phone that is less than two years old, substantial advances in technology need to continue just to maintain sales."

- Billy Hulkower, Senior Technology Analyst

This report will cover the following areas:

Massive historic sales difficult to surpass
Duopoly dominates
Durable phones may damage sales

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Overview
- What you need to know
- Definition
Executive Summary
- The issues
- Massive historic sales difficult to surpass
  - Figure 1: Total US unit sales and fan chart forecast of mobile phones, 2012-22
- Duopoly dominates
  - Figure 2: Brand owned, January 2017
- Durable phones may damage sales
- - Figure 3: Purchase of new phone because prior phone broke, by age, January 2017
- The opportunities
- Storage, camera, screen size to drive upgrades
  - Figure 4: Satisfaction with current phone, January 2017
- Feature phone owners want directions, email, photos
  - Figure 5: Motivations to switch from feature phone to smartphone, January 2017
- Teens and tweens to carry growth
  - Figure 6: Cell phone ownership among teens, April 2015-November 2016
- What it means
The Market – What You Need to Know
- Over 200 million units sold annually between 2013-17
- Conversion to smartphone still in progress
- Phones for kids add up
- Market hinged on postpaid plans
Market Size and Forecast
- A billion units sold between 2013-17
- Hardware remains worthy of upgrades
- Impact of 5G
- Teens/tweens and feature phone conversion
  - Figure 7: Total US unit sales and fan chart forecast of mobile phones, 2012-22
  - Figure 8: Total US unit sales and forecast of mobile phones, 2012-22
Market Breakdown
- Feature phone sales crater
  - Figure 9: Smartphone unit sales vs feature phone unit sales, 2015 vs 2017
- Directions, email, photos, most desired by feature phone owners
  - Figure 10: Motivations to switch from feature phone to smartphone, January 2017
Market Perspective
- Carrier postpaid plans prop up market
- - Figure 11: Up-front purchase of current smartphone, by household income, January 2017
- Postpaid subs holding steady market share
  - Figure 12: Subscriptions, prepaid vs postpaid, 2015 vs 2016
- Unbreakable phones
  - Figure 13: Purchase of new phone because prior phone broke, by age, January 2017
Market Factors
- Conversion to smartphones still in progress
- - Figure 14: Feature phone ownership, by age, January 2017
- Teen ownership rising
  - Figure 15: Cell phone ownership among adults and teens, April 2014-November 2016
  - Figure 16: Cell phone ownership among teens, by gender and age, April 2015-November 2016
- Potential sales among tweens and kids
  - Figure 17: Population, by age, 2012-22
Key Players – What You Need to Know
- Two dominant brands
- Sales not enticing
- Numerous competitors for leftovers
What’s Working?
- Marketing winning sales
  - Figure 18: Brand owned, January 2017
What’s Struggling?
- Lack of marketing support damning
  - Figure 19: Brand owned, January 2017
- Sale pricing not a common driver
  - Figure 20: Purchase of smartphone on sale or used, by household income, January 2017
- - Figure 21: Purchase of smartphone on sale or used, by single parents and unemployed, January 2017
What’s Next?
- Rise of China Inc.
- Kids phones
- Insurance plans may create interest in private label
- Rapid glass repair at automated Apple Horizon machines
The Consumer – What You Need to Know
- Three in four own a phone less than two years old
- iPhone fan girls drive brand loyalty
- Low levels of interest in next smartphone
- Smartphone users ready for next level of activity
Length of Phone Ownership
- Two years remains the norm
  - Figure 22: Age of phone, January 2017
- Age chief determinant of recent upgrade
  - Figure 23: Age of phone, by age of owner, January 2017
- Dads buy in
  - Figure 24: Age of phone, by parental status, January 2017
- Recent purchase nearly universal among Hispanic Millennials
  - Figure 25: Age of phone, by Hispanic origin and generation, January 2017
Loyalty
- Stated loyalty limited
- In their own words:
- - Figure 26: Brand loyalty, by age, January 2017
- Young women stuck on iPhone
  - Figure 27: Brand loyalty, by gender and age, January 2017
- Limited distinctions outside of gender and age
  - Figure 28: Brand loyalty, by race and Hispanic origin, January 2017
Interest in Purchasing
- Less than a third ready for next smartphone
- In their own words:
- - Figure 29: Interest in acquiring a new smartphone, by age, January 2017
- Higher-income groups more content with current phone
  - Figure 30: Interest in acquiring a new smartphone, by household income, January 2017
- Some savings in cutting rural budgets
  - Figure 31: Interest in acquiring a new smartphone, by area, January 2017
- Hispanic Millennials deserve attention
  - Figure 32: Interest in acquiring a new smartphone, by race, Hispanic origin, and generation, January 2017
Promoting New Activities
- Integrating with dashboard, television, and smart home
- - Figure 33: Current activities and interest in activity adoption, January 2017
- Young men ready to adopt
  - Figure 34: Current activities and interest in activity adoption, by gender and age, January 2017
- Urbanites atop interest
  - Figure 35: Current activities and interest in activity adoption, by location of residence, January 2017
Reasons to Upgrade
- Storage, camera, screen size continue to drive sales
- In their own words:
- - Figure 36: Reasons to upgrade, January 2017
- Usual suspects more interested in improving their phones
  - Figure 37: Reasons to upgrade, by age, January 2017
  - Figure 38: Reasons to upgrade, by location of residence, January 2017
- - Figure 39: Reasons to upgrade, by Hispanic origin and generation, January 2017
In Their Own Words – Qualitative Responses
- Keeping abreast of tech: Mobile just part of the mix
- Durability, battery remain areas for improvement
Appendix – Data Sources and Abbreviations
- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms