Owners of Wireless Phones Keep Them Longer

Despite the continuing decline in the average price of a wireless mobile phone, wireless subscribers are waiting longer to replace their current mobile phones, according to the J.D. Power and Associates 2002 U.S. Wireless Mobile Phone Evaluation StudySM released today.

The study finds that, on average, the typical subscriber owns a wireless phone model for 18 months, compared to 16 months in 2000. At the same time, the average price a customer pays for their wireless mobile phone has dropped from an average of $100 in 1999 to $75 in 2002. A major reason for this decline is that handset providers and wireless service carriers are discounting the phone more often to drive sales. The number of customers who report receiving a free wireless mobile phone when they first subscribe to wireless service has increased dramatically—from 18 percent in 2000 to 28 percent in 2002.

"It’s clear that wireless service carriers are using mobile phones as an enticement to increase consumer traffic by applying discounts either through rebates or free limited-time offers," said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. "The problem with this strategy is that in most cases, the handset being offered for discount are older models, which typically do not have the latest technological advancements or design features."

The study finds that customer satisfaction with premium-priced wireless mobile phones is significantly higher than lower-priced models. The premium-priced segment, which typically starts above the $150 range, includes many of the features and cutting-edge technology subscribers are looking for, such as color displays and multimedia messaging capabilities.

The five major areas driving satisfaction with wireless mobile phones (in order of importance) are: physical design, features, operation, battery function and durability. Exceeding customer expectations in these areas substantially raises the possibility that subscribers will buy the same brand the next time they are in the market to replace or upgrade their wireless mobile phones.

One example of a handset manufacturer that exceeds customer expectations is Sanyo. Sanyo ranks highest in overall customer satisfaction with wireless mobile phones, consistently performing above the industry average in all five areas.

"Sanyo offers wireless mobile phones that include a desirable combination of design style, ease of use and functionality, which customers truly enjoy and appreciate," said Parsons.

Following Sanyo in the rankings are Motorola and Samsung in a tie, and Kyocera, respectively.

The 2002 U.S. Wireless Mobile Phone Evaluation Study measures customer satisfaction in 27 of the largest U.S. markets with the top seven wireless mobile handset providers based on responses from 5,259 households.