Roger Entner, Senior Vice President, Research and Insights, Telecom Practice
While public awareness of Apple's iPhone has been significant since its summer 2007 launch, its influence on consumer purchasing decisions remains up for debate.
To try to better understand the iPhone phenomenon, I took a look at the most recent data from The Nielsen Company's Mobile Insights survey, which asks 25,000 wireless users every month (a total of 300,000 per year) about their wireless attitudes and experiences, including why they chose their current wireless service.
When the results of 1st quarter of 2009 are compared with the 3rd quarter of 2006 as a control for the "iPhone-effect," some interesting insights emerge. Q3 2006 was the last quarter without solid iPhone news that could sway consumers in their purchasing behavior.
|Factors For Choosing A Wireless Carrier|
|RANK||3rd Quarter 2006||1st Quarter 2009|
|2||Network Quality||Family Plan|
|3||Reputation / Recommendation||Payment Option|
|4||Previous experience with the operator||Free In-Network Calling|
|5||Family Plan||Network Quality|
|6||Payment Options||Reputation / Recommendation|
|7||Specific Phone||Specific Phone|
|8||Customer Service||Previous experience with the operator|
|Source: The Nielsen Company|
At first glance, the most striking difference between 2006 and more recent data is what changed and what did not. Price remains the most important factor in choosing wireless service. Yet, even with the prominence of the iPhone, surprisingly the availability of a specific phone stayed flat as the 7th most important factor. While increasing in importance from 2.9% to 6.4% handset-choice alone did not bump up in the rankings. It seems that what makes for an outsize share of newspaper headlines, and congressional and regulatory attention, leaves the average American cold.
Not as surprising, economic factors are increasingly important. Family plans that let consumers call other family members for free and free in-network calling have shot up to near the top. Payment options, including pre-paid and unlimited calling and texting offers, are also substantially more important.
This translates into opportunity for:
Perhaps the most unexpected outcome is the declining importance of network quality as a major factor from 2nd to 5th place. A testament to the success of its consistent advertising message, the number of consumers who perceive Verizon Wireless as having the best mobile network has shot up over the last two years and it leads its closest competitor now by an almost 2:1 margin. Consumer perception of the carrier's quality has shot up over the last two years and it remains the single-most important reason consumers choose them. While handsets represent popular topics of conversation, economic factors are actually the major driver in the purchasing process.