Buyers Tell Cell Phone Makers: Keep It Simple

Jupiter Research says its findings show consumers want low-priced phones without all the bells and whistles.

InformationWeek Staff, Contributor

July 22, 2003

3 Min Read

Forget the digital bells and whistles. U.S. consumers want phones that are mostly phones, analyst group Jupiter Research said Tuesday.

Despite aggressive advertising of digital photography-capable and MP3-equipped phones, backed by equally aggressive price points for the combo units, domestic consumers prefer the smaller, voice-only phones offered at no charge by carriers, Jupiter telecom analyst Avi Greengart said.

The attitude paralleled for the U.S. market worldwide findings reported last month by consulting firm A.T. Kearney. According to Kearney analysts working with researchers at Cambridge University's business school, users in 15 countries wanted longer battery life and better sound quality before adding new features to their phones.

Here, consumers want small size and low-to-no price, Greengart said.

"This is an unbelievably price-sensitive market," he said. "In the U.S., even at $49, the majority of people we interviewed were not willing to consider buying."

Larger economic doldrums don't seem to be driving the reluctance.

"We got no real sense that the economy is playing much of a part," Greengart said. "The functions that are being most aggressively marketed are simply functions consumers don't want in their phones."

The lack of desire only grows stronger when compromises including larger size and shorter battery life resulting from additional functions are presented to consumers.

Greengart's research posed "willingness to consider" buying questions, rather than "intend to buy," but the most-hyped digital add-ons for phones still ranked low. "MP3 capability came in dead last," Greengart said. "Games were second-from-last, photos third-from last."

The analyst was surprised by the relatively high ranking of PDA capabilities. "Twelve percent of our subjects were interested in having PDA-capable phones," he said.

The catch? They wanted organizers and address books and calendars added without adding the phone's size.

"Half of that 12% wanted both small size and PDA functionality--you can't have both," he said. "It's always going to be tough to get a full-function PDA in a small form-factor. Understanding that, you're back to a very small percentage of consumers willing to consider PDA-functions in their phones."

Nine percent of the analysts respondents wanted to browse the Internet with their phones, but Greengart felt certain that desire would dwindle as consumers discovered the challenges of browsing on a small cell phone screen.

With no widely desired killer application bringing droves of consumers to purchase converged phones, some carriers are beginning to give away higher-tech devices with their monthly calling plans, offering but not requiring additional digital services products.

Such an approach rests on the possibility--but no more than a possibility--that the carriers will be able to charge for add-on services later, in Greengart's view. "We may see a strategy of simply getting as many razors in the market as possible and worrying about selling the razor blades later," he said.

Greengart suggested that a better and more-marketable approach than extending device functionality would be to extend the phones' communications capability. "Vendors should put Bluetooth in the phones, cameras, and PDAs," he said. "That way the consumer can decide what he wants, synchronize the functions that are most important, and carry that devices that get used the most. Instead of manufacturers making compromises to add functions, let the consumers make the compromises."

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