Guide to Innovation

2008 Wireless Smartphone Customer Satisfaction Study
by: Jerry Liao

They say that the best way to improve your products and services is for you to ask your very target market or your customers. Customer feedback will tell you the good and the bad side of your offering.

A recent study released recently by J.D. Power and Associates simply proves the above statement. J.D. Power and Associates released the 2008 U.S. Wireless Mobile Phone Evaluation Study–Volume 2 which shows smartphones and feature-rich mobile phones continue to grow in popularity, customer satisfaction with wireless phones has increased, despite higher costs for handsets and service.

The study measures customer satisfaction with wireless handsets by examining five key factors. In order of importance, they are: physical design (24%); operation (22%); features (20%); handset durability (19%); and battery function (15%).

The study finds that the average reported purchase price for a wireless handset has increased substantially to $107, up $15 from 2007. The increase in the average purchase price can be partially attributed to the recent surge in popularity of smartphone devices, such as the RIM BlackBerry, Palm Treo and Apple iPhone, as well as music-enabled handsets and messaging phones, all of which typically have higher price points. Similarly, customers report spending more on their wireless service — an average of $80 per month (including federal and state taxes) — as they are more inclined to purchase data plans, text messaging packages and downloads.

Despite this increased spending, the study finds that overall satisfaction with mobile phones has improved significantly to 719 on a 1,000-point scale, a 9-point increase from six months ago.

“Customers are increasingly integrating feature-rich phones into their daily routines and finding it rewarding,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. “The ability to communicate by sending instant messages and e-mails, access the Internet or get directions via GPS are just some of the many features that handset owners are growing progressively more inclined to utilize.”

The study also finds that satisfaction levels are higher among younger handset owners, as they are more inclined to own feature-rich phones. The overall satisfaction score among 18- to 24-year-olds is 750, compared with 709 among customers between 45 and 64 years old.

“As more customers continue to upgrade to mobile phones that allow for multiple methods of communication and access to endless information, as well as provide convenience and entertainment, overall handset satisfaction should continue to rise,” said Parsons. “It is important, however, that manufacturers ensure these features are intuitive and wireless carriers provide their customers with the support to properly use these features to maximize their experience.”

Sony Ericsson ranks highest in overall wireless customer satisfaction for a third consecutive time with a score of 739, performing particularly well in features and battery function. LG (733) and Samsung (724) follow in the rankings. Completing the list are Nokia (704), Motorola (703), Kyocera (700), and Sanyo (697).

The study also finds several key wireless handset purchase patterns:

— Nearly one-half (49%) of wireless users report they are likely to purchase a new phone in the coming year, while only 45 percent said the same six months ago.

— Thirty percent of customers indicate they would like to have GPS software on their next phone, while 25 percent said they would like a touch screen.

— The most frequently reported reasons customers give for selecting their current cell phone include: pleasing design style (43%); received for free (25%); easy to use (25%); discounted/reduced price (23%); digital camera features (20%); and variety of features offered (19%).

Volume 2 of the 2008 U.S. Wireless Mobile Phone Evaluation Study is based on experiences reported by 16,717 wireless users who have owned their current mobile phone for less than two years. The study was fielded between February and June 2008.

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