Few smartphone owners are loyal to their brand: survey

LONDON Mon Nov 29, 2010 4:34pm EST

Commuters use their smartphones as they ride in a bus leaving Manhattan through the Lincoln Tunnel in New York October 8, 2010. REUTERS/Gary Hershorn

Commuters use their smartphones as they ride in a bus leaving Manhattan through the Lincoln Tunnel in New York October 8, 2010.

Credit: Reuters/Gary Hershorn

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LONDON (Reuters) - The booming smartphone market shows no sign of slowing but manufacturers will have to fight hard to keep their customers as smartphone owners show little loyalty to their current brands, a GfK survey shows.

The survey, to be published later on Monday, found that 56 percent of smartphone owners in key global markets were keeping their options open about which phone they would buy next, with only Apple commanding a significant degree of loyalty.

With features such as Wi-Fi, GPS and high-resolution cameras now commonplace, owners of Internet-enabled phones are increasingly concerned with the ease of accessing attractive services to enhance their devices, often through app stores.

"Loyalty with a handset is a lot more complicated these days in that people buy into experiences at the high-end level," Ryan Garner, the lead analyst on the survey, told Reuters.

"If a phone doesn't do what it says it will do or what the owner hopes it will do, the maker will lose loyalty."

The survey found that just 25 percent of smartphone owners planned to stay loyal to the operating system running their phone, with loyalty highest among Apple users at 59 percent, and lowest for Microsoft's phone software, at 21 percent.

Of users of Research in Motion's BlackBerrys, 35 percent said they would stay loyal. The figure was 28 percent for users of phones running Google's Android software, and 24 percent for users of Nokia Symbian phones.

Nokia, the world's biggest maker of cellphones, is revamping its software strategy under new Chief Executive Stephen Elop, and is due to release two new platforms next year.

GfK conducted the survey of 2,653 mobile phone users in Brazil, Germany, Spain, Britain, the United States and China online during October and November.

The German market-research company also found that 37 percent of cellphone owners in all those markets excluding China planned to upgrade to a smartphone on their next purchase. They did not ask the question in China for logistical reasons.

Sales of smartphones nearly doubled in the third quarter and are expected to be up more than 50 percent for 2010, according to IT research firm Gartner, outpacing growth seen at closer to 30 percent for the cellphone market as a whole.

Smartphones command far higher margins than regular mobile phones, although that profitability is being eroded by new competition from vendors who have been able to enter the market thanks to Google's open-source Android software.

(Reporting by Georgina Prodhan; Editing by Marguerita Choy)

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Comments (10)
ulludapattha wrote:
According to some Nokia report it claims it has a 60% loyalty rate!
This new report says it’s only 24%. How can Nokia explain this huge discrepancy?

Has Nokia missed the “Smartphones bus”?

Nov 29, 2010 5:57am EST  --  Report as abuse
wandererc wrote:
I have not used Nokia phones by far.I don’t think i’d get one in the future.i’d focus more on battery duration whenever i get a phone.So i think Philips is more suitable for me.Because i don’t wanna worry about forgetting to recharge my cell phone.

Nov 29, 2010 6:35am EST  --  Report as abuse
earthshiva wrote:
The 24% of Nokia’s customers who profess loyalty probably have not heard the company is “revising its software strategy.” There is no point in loyalty to a faded memory.

Aplle’s platform is a closed system that locks out major delivery software such as Adobe’s Flash, and Apple seems to exercise an excess of editorial control over app content. Added on top of Apple’s disingenousness over its antenna issues, 59% loyalty is baffling.

Android, being open source, can be an entirely different beast from one manufacturer to the next, as each implementation is likely to contain value-added points of differentiation.

Microsoft, as usual,has made a test market of its early customers and will refine its product to something acceptable in a couple more releases.

The bottom line is that this market is still immature, and that consumer behavior provides a 21%-24% built-in resistance to change in the absence of any compelling feature. Apple has the only platform that has risen above this level. Since the apps that run on these devices are much smaller and more easily re-written than PC software, brand loyalty is more likely to emerge from reliability and ergonomics.

Nov 29, 2010 11:06am EST  --  Report as abuse
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