January 9th, 2024, Kineree Shah
In this article, we explore the key trends and insights that emerged in the telecom industry in 2023. Standing out insights include the rise of second-hand phones, shift in cell phone expenditures, and AI.
How are consumers choosing phones this year?
Our data reveals the most popular pre-purchase research habits when it comes to buying cell phones. Half of consumers across 18 markets read written consumer reviews (47%) and consult with friends and family (47%) before buying a cell phone. Additionally, two in five consumers check a brand's website (39%), and a third watch consumer video reviews (33%). But there is still a place for professional advice. Over a quarter of global consumers prefer speaking to a sales executive (29%), while around 28% value expert opinions.
Interestingly, one in five consumers discover new cell phones through online reviews (20%), with online ads (14%) and social media recommendations (14%) also playing a significant role. When it comes to actually handing over the cash for a phone, in the US, in-store purchases remain popular, with two in five Americans preferring this method (41%). However, three in 10 opt for online buying (29%).
The market for second-hand cell phones is also significant. A quarter of consumers from 17 markets are open to purchasing second-hand phones (27%), with high-income earners making up a substantial portion of this demographic (25%).
Key factors influencing cell phone purchases
When it comes to the factors influencing cell phone purchases, warranty (72%), functionality (29%), and value for money (28%) are key factors across 17 international markets. In the US and UK, a good previous experience with a brand is a major influencer (75% and 70% respectively), surpassing cost-related considerations. This indicates that brand loyalty plays a critical role in these markets.
A poll conducted in late February 2023 show that over a third of Americans planned to buy a new smartphone in the next 12 months (36%). Out of these consumers, 12% intend to splurge over $1000. Notably, battery life is a key feature for American consumers. In Britain, besides battery life (72%), storage memory size (59%), camera quality (55%), screen size (46%), battery charging time (45%), and the operating system (45%) are major considerations. Longevity is another crucial aspect, with most consumers in the US and UK wanting to use their phones for at least two years (70% and 82% respectively).
Shift in cell phone expenditure
The phone expenditure habits of Britons have evolved noticeably from 2019 to 2023. Over this period, about one-third of Britons consistently spent between £10-£19.99 each month, suggesting a stable preference for this budget range. However, there has been a growing trend towards lower spending. The £5-£9.99 category saw an increase from 17% in 2019 to 21% in 2023.
This gradual shift towards reduced spending may be attributed to the competitive nature of the British telecom market, a growing preference for SIM-only tariffs, and the extended lifespan of handsets. Notably, spending at both the lower end (under £5) and the higher end (over £50) has remained largely unchanged, highlighting a consistent spending pattern in these segments.
Growing reliance on cell phones
Cell phones have become an indispensable part of life for many Britons, with two in five saying they can’t live without them (42%). This sentiment is particularly strong among young adults aged 16-34, with over half expressing their reliance on mobile devices (56%). In the US, perceptions of cell phone usage vary by gender. Over one-third of American women feel they use their phones too much (37%), a sentiment shared by a quarter of men (27%). Despite this, the majority remains unworried or unbothered by their current mobile habits. Specifically, 57% of men and 53% of women have no current intentions of altering their mobile behavior.
YouGov survey data also highlights varied instances of cell phone usage across 17 markets. Over half of the consumers report frequently using their smartphones in bed before sleep (56%), while a third use their phones during work (33%). Night-time and mealtime usage also feature prominently, with a quarter of consumers checking their phones if they wake up in the middle of the night (24%) and a third using them during dinner (31%). Social settings like eating out with friends or at a bar see about 21% and 20% of people respectively using their phones. Additionally, 20% admit to using their phones while in the toilet, underlining the pervasive nature of mobile technology in daily life.
Network providers: Balancing connectivity and costs
As of early 2023, mobile phone network access has become so crucial that one in 20 consumers across 17 markets anticipate the possibility of incurring debt to maintain it. This 5% figure, though lower compared to essential categories like housing (12%) and transportation (8%), underscores the increasing significance of mobile connectivity in everyday life. It reflects the lengths people are willing to go to ensure uninterrupted access, highlighting a growing dependency on mobile networks.
However, satisfaction with network providers' digital experiences shows a decline. In 2023, only 29% of consumers from these markets expressed happiness with their network's digital experience, a decrease from 33% the previous year. This drop suggests a growing gap between consumer expectations and the digital services offered by network providers.
Is telemarketing dead?
While consumers view network connection as crucial, it’s not to allow brands to ring them. The era of telemarketing appears to be waning. Across six markets, a significant majority of consumers view telemarketing calls as an annoyance, often choosing to ignore them. Proactive measures such as blocking calls or registering for 'Do Not Call' lists have become common. In the US, nearly a third of consumers have adopted such strategies. Similar trends are observed in Great Britain and Australia, where about 22% and 19% of consumers, respectively, actively block telemarketing calls. Contrarily, in markets like the UAE and India, a smaller but notable portion of consumers still respond positively to telemarketing calls, standing at 22% and 19% respectively. This indicates varied attitudes towards telemarketing across different regions, reflecting cultural and market differences.
Steady rise of Google Pixel in UK
YouGov BrandIndex data reveals a significant upswing in the presence and appeal of Google's Pixel brand in the UK from 2021. The number of UK consumers recalling recent ads for the Pixel has surged, averaging an eight-fold increase from the first half of 2021 to 2023. In March 2023, Google Pixel even earned the title of ‘Advertiser of the Month'. Moreover, the percentage of consumers considering a Google Pixel for their next purchase jumped from 7.8 to 12, marking a notable 33% rise over two years. This growth trajectory underscores Google Pixel's burgeoning popularity in the UK market.
iPhone’s growth trajectory
The iPhone continues to dominate its established markets while making significant inroads into new territories, largely thanks to high brand loyalty rates. Three in five Apple handset owners across 48 markets express brand loyalty (65%), compared to just 45% among owners of other brands. The value of the iPhone brand is further highlighted by the fact that nearly half of all Apple handset owners (49%) consider brand an important factor in their purchasing decision. This sentiment is less pronounced among owners of other handsets, at 37%.
2023 marked the launch of the iPhone 15 lineup, including the iPhone 15, 15 Plus, 15 Pro, and 15 Pro Max. Our in-depth study indicates that two in five American Apple smartphone owners are considering an upgrade to an iPhone 15 within the next year (39%). Key desired features include longer battery life, increased memory for data storage, and faster processing speeds.
The iPhone 15 series is set to revolutionize mobile gaming by natively supporting high-end games like Resident Evil 4 Remake and Assassin’s Creed Mirage, previously limited to PC and console platforms. Our detailed analysis delves into how this focus on an enhanced gaming experience could further strengthen iPhone's hold in a market it already leads.
Samsung’s inexorable rise in the smartphone market
YouGov's monthly analysis for August 2023 highlights Samsung's significant achievement, with the brand witnessing an 8.8-point increase in its Ad Awareness score. This surge is largely attributed to the launch of its highly anticipated products on August 11, including the Galaxy Z Flip5, Galaxy Z Fold5, Galaxy Watch6 series, and Galaxy Tab S9 series. Complementing these launches, Samsung introduced the Samsung Game Portal
Growing emphasis on AI in business and telecoms
AI is rapidly becoming a focal point in the business world. According to our data, 23% of business decision-makers are prioritizing AI adoption over the next five years. Notably, 19% of employees in the IT and telecom sectors, including both full-time and part-time workers, are currently using AI software in their roles. However, there are concerns regarding AI regulation, with half of business decision-makers viewing future AI regulation as a key risk or limitation. Additionally, 46% are wary of the consequences of using invalid or biased data in AI systems.
From the consumer perspective, particularly in the US and Britain, there's a significant belief that AI will excel in specific roles. Technical support and software development are the top areas where consumers expect AI to surpass human performance within the next five years, with 27% and 29% of consumers in the US and Britain, respectively, foreseeing AI's dominance in technical support, and 20% and 26% anticipating the same in software development.