In a market where the top five handset makers account for 75% of global sales, with well over 200 million units sold in the first quarter (the iPhone is not even in that equation), two recent research reports on consumer purchasing decisions seem to defy logic.
Research by WDSGlobal found that 49% of consumers cite price as the most important factor in buying a mobile phone. No surprise there. But the firm claims its research shows only 7% of consumers base their purchase on the phone brand and just 10% chose a phone based on its design.
It went on to explain the phenomena. “A combination of operator subsidies and the homogenization of device design is having a negative impact on the role of the OEM brand.”
Meanwhile, a survey by TNS Global found that “look and feel is the predominant deciding factor” for 32% of consumers in Hong Kong purchasing a mobile device while brand was the single most important for 19% of consumers.
Those numbers are three times higher than the WDSGlobal percentages. So one is left to ponder the real importance of brand and design in today’s handset market, where the two factors appear to be driving the market buzz and creating excitement for higher-end smartphones.
While the TNS Global numbers may be more plausible (partly because price surprisingly wasn’t included as a factor), its report went on to say that the lifecycle of mobile phones in Hong Kong has decreased from 34 months last year to 31 months this year.
Sorry, but even with the global downturn extending the replacement cycle by as much 10.7 months last year, according to iSuppli (Informa Telecoms & Media put the increase at just six to eight months), that number is far too high. Even in the hard-hit Spanish market, the handset renewing cycle increased to just 24?months from 18 months in 2009.
Before the recession, the replacement cycle in most developed Asian markets (as well as mainland China) was in the range of 12 to 18 months – with Hong Kong and Singapore on the lower end of the range. Personally, I don’t know anyone waiting 2-1/2 years to replace his or her handset.
Some 19% of the respondents to the TNS survey said content and applications were the most import factor in their next handset purchase (equal to brand). It’s interesting that just 7% indicated the operating system as a key factor (still early days for that, but certainly one to rise in the coming months and years).
The stark contrast in conclusions of the two reports – “brand loyalty is weak” vs. “content and applications equally important as brand” – shows how anyone, as Andrew Lang once said, can “use statistics as a drunken man uses lampposts – for support rather than illumination”.
In the case of WDSGlobal, the low importance of brand supports its business line of helping telecom players improve their customers’ experience. Not surprisingly it recommends makers to focus on non-hardware services, which will help raise brand equity. But for TNS, there is little explanation – the survey of 561 consumers had a sampling error of +/- 4.14% at a 95% confidence level.
No doubt methodology issues at play.