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Mobile Phones - UK - April 2017

Published By :

Mintel

Published Date : May 2017

Category :

Telecommunications

No. of Pages : N/A

In the context of a slowing smartphone market, manufacturers’ upgrade programmes can help gain valuable control of the smartphone distribution market, which has thus far been mostly in the hands of operators and specialist retailers. Moreover, such programmes can increase switching costs and further foster brand loyalty by leading customers to enter what in practice becomes a rolling year-by-year contract with the manufacturer. Furthermore, returned one-year-old devices would give manufacturers much more valuable control over the second-hand market.

Table of Content

OVERVIEW
What you need to know
Products covered in this Report

EXECUTIVE SUMMARY
The market
The smartphone market is approaching maturity
Figure 1: Value of mobile phone sales in the UK, 2011-21
Figure 2: Value of mobile phone sales in the UK (source data), 2011-21
Companies and brands
Manufacturers responsible for most of the promotional effort
Figure 3: Total above-the line, online display and direct mail advertising expenditure on smartphones, by advertiser, 2016
Sony struggles to challenge market leaders’ brand positioning
Figure 4: Attitudes, by manufacturer brand, January 2017
Windows Phone struggles to compete in the binary OS eco-system
Figure 5: Attitudes, by operating system brand, January 2017
The consumer
Samsung and Apple continue to strengthen their market leadership
Figure 6: Manufacturer of smartphone owned, December 2016
Towards a binary OS eco-system
Figure 7: Operating system of smartphone owned, December 2016
Buying smartphones outright is the preferred option
Figure 8: Ways in which consumers paid for their smartphone, December 2016
No marked preference for online or offline smartphone shopping
Figure 9: Ways in which consumers got their smartphone, December 2016
Mobile network providers dominate smartphone distribution market
Figure 10: Whom consumers got their smartphone from, December 2016
Majority of smartphone owners to upgrade in the next two years
Figure 11: Intentions to buy or upgrade to a new smartphone in the next two years, December 2016
Non-upgraders want to make the most of their current device
Figure 12: Reasons not to plan a smartphone purchase in the next two years, December 2016
Brand loyalty in the smartphone market
Figure 13: Attitudes of consumers planning on a smartphone purchase in the next two years, December 2016
Longer battery life by far the most wanted feature
Figure 14: Most important features when upgrading to a new smartphone, December 2016
Two in five smartphones have second life…
Figure 15: Second life of smartphones, December 2016
Almost half of smartphone owners wouldn’t buy second-hand
Figure 16: Attitudes towards second-hand smartphones, December 2016
What we think

ISSUES AND INSIGHTS
Potential developments of brand loyalty in a slowing smartphone market
The facts
The implications
The threat of the second-hand market and how to overcome it
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
The smartphone market is approaching maturity
Innovation to help revive the market from 2020 onwards
Substitution of basic phones with smartphones continues
Purchasing intentions remain strong despite market slowdown
Voice assistants could further drive mobile-first behaviours
The smartphone market is the most brand-driven

MARKET SIZE AND FORECAST
The smartphone market is approaching maturity
Figure 17: Value of mobile phone sales in the UK, 2011-21
Figure 18: Value of mobile phone sales in the UK (source data), 2011-21
The short and long-term impact of Brexit
Innovation to help revive the market from 2020 onwards
Forecast methodology

MARKET DRIVERS
Substitution of basic phones with smartphones continues
Figure 19: Ownership of mobile phones and smartwatches, January 2012-December 2016
Purchasing intentions remain strong despite market slowdown …
Figure 20: Plans to purchase or upgrade consumer technology products, by timescale, December 2016
…as smartphone usage continues to grow
Figure 21: Devices used to access the internet in the last three months, June 2013-September 2016
Mobile-first teens and tweens entering the adult demographic
Figure 22: Devices used by children aged 10-15, May 2016
Voice assistants could further drive mobile-first behaviour
Mobile gaming further drives smartphone usage
The smartphone market is the most brand-driven
Figure 23: Factors on which consumers would decide first when buying technology products, April 2017

COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Upgrade programmes become a reality in the UK
The Nokia 3310 is back
Welcome Pixel, the first true Google Phone
A shift in the monitored admix
Manufacturers responsible for most of the promotional effort
Sony struggles to challenge market leaders’ positioning
Windows Phone struggles to compete in the binary OS eco-system

LAUNCH ACTIVITY AND INNOVATION
Upgrade programmes become a reality in the UK
The Nokia 3310 is back
Figure 24: the new Nokia 3310 in the three colour variations available, March 2017
Welcome Pixel, the first true Google Phone
Figure 25: The Pixel and Pixel XL, October 2016
Sony bets on slow motion
LG moves from modular designs to split-screen support
Are bendable and flip smartphones on the horizon?
Figure 26: The Lenovo CPlus Prototype, April 2017

ADVERTISING AND MARKETING ACTIVITY
A shift in the monitored admix
Figure 27: Total above-the line, online display and direct mail advertising expenditure on smartphones, by media type, 2015 and 2016
Manufacturers responsible for most of the promotional effort
Figure 28: Total above-the line, online display and direct mail advertising expenditure on smartphones, by advertiser, 2016
Nielsen Ad Intel coverage

BRAND RESEARCH – MANUFACTURERS
Brand map
Figure 29: Attitudes towards and usage of selected manufacturer brands, January 2017
Key brand metrics
Figure 30: Key metrics for selected manufacturer brands, January 2017
Brand attitudes: Sony struggles to match market leaders’ positioning
Figure 31: Attitudes, by manufacturer brand, January 2017
Brand personality: Apple’s exclusivity is unmatched
Figure 32: Brand personality – Macro image, January 2017
HTC and Lumia equally struggling
Figure 33: Brand personality – Micro image, January 2017
Brand analysis
Samsung’s reputation unaffected by Galaxy Note 7 backlash
Figure 34: User profile of Samsung, January 2017
Sony appears stuck in the middle
Figure 35: User profile of Sony, January 2017
Apple’s exclusive positioning has some drawbacks
Figure 36: User profile of Apple, January 2017
HTC’s value for money proposition best appeals to men
Figure 37: User profile of HTC, January 2017
Lumia struggles on awareness
Figure 38: User profile of Microsoft Lumia, January 2017

BRAND RESEARCH – OPERATING SYSTEMS
Brand map
Figure 39: Attitudes towards and usage of selected operating system brands, January 2017
Key brand metrics
Figure 40: Key metrics for selected operating system brands, January 2017
Brand attitudes: Windows Phone struggles to compete in the binary OS eco-system
Figure 41: Attitudes, by operating system brand, January 2017
Brand personality: exclusivity vs accessibility is key to the competition between iOS and Android
Figure 42: Brand personality – Macro image, January 2017
iOS outperforms competitors for both features and style
Figure 43: Brand personality – Micro image, January 2017
Brand analysis
Android’s wide availability is its key advantage
Figure 44: User profile of Android, January 2017
iOS’s exclusivity drives upbeat brand image
Figure 45: User profile of iOS, January 2017
Windows Phone struggles to keep up in the binary OS eco-system
Figure 46: User profile of Windows Phone, January 2017

THE CONSUMER – WHAT YOU NEED TO KNOW
Samsung and Apple continue to strengthen their market leadership
Buying smartphones outright is the preferred option
Mobile network providers dominate smartphone distribution market
Brand loyalty is a key driver in the smartphone market
Two in five smartphones have second life…

MANUFACTURER AND OPERATING SYSTEM
Samsung and Apple continue to strengthen their market leadership
Figure 47: Manufacturer of smartphone owned, December 2016
Samsung has wider appeal but Apple is able to reach key demographics
Figure 48: Ownership of Samsung and Apple smartphones, by gender and age, December 2016
Keeping up with the top players
Towards a binary OS eco-system
Figure 49: Operating system of smartphone owned, December 2016

SMARTPHONE PURCHASING PROCESS
Buying smartphones outright is the preferred option
Figure 50: Ways in which consumers paid for their smartphone, December 2016
Figure 51: Ways in which consumers paid for their smartphone, by manufacturer of smartphone owned, December 2016
No marked preference for online or offline smartphone shopping
Figure 52: Ways in which consumers got their smartphone, December 2016
Figure 53: Ways in which consumers got their smartphone, by ways in which consumers paid for their smartphone, December 2016
Mobile network providers dominate smartphone distribution market
Figure 54: Whom consumers got their smartphone from, December 2016
Figure 55: Whom consumers got their smartphone from, by ways in which consumers paid for their smartphone, December 2016

BUYING INTENTIONS IN THE NEXT TWO YEARS
Majority of smartphone owners to upgrade in the next two years
Figure 56: Intentions to buy or upgrade to a new smartphone in the next two years, December 2016
The impact of the second-hand market on upgrades
Non-upgraders want to make the most of their current device
Figure 57: Reasons not to plan a smartphone purchase in the next two years, December 2016
Brand loyalty in the smartphone market
Figure 58: Attitudes of consumers planning on a smartphone purchase in the next two years, December 2016
Manufacturers’ upgrade programmes could threat operators’ positioning
Retailers and operators can use trade-ins to attract upgraders

IMPORTANT FEATURES WHEN UPGRADING
Longer battery life by far the most wanted feature…
Figure 59: Most important features when upgrading to a new smartphone, December 2016
…but cameras remain a key area of competition
Still looking for the next killer smartphone feature
Figure 60: Most important features when upgrading to a new smartphone, by repertoire of most important features when upgrading to a new smartphone, December 2016

SMARTPHONES’ LIFECYCLE AND THE SECOND-HAND MARKET
Two in five smartphones have a second life…
Figure 61: Second life of smartphones, December 2016
…but keeping a spare remains the most popular option
Almost half of smartphone owners wouldn’t buy second-hand
Figure 62: Attitudes towards second-hand smartphones, December 2016

APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
Market size and forecast
Fan chart forecast
Figure 63: Best- and worst-case forecast for the value of the UK mobile phone market, 2016-21
Brand research
Brand map

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