4G Not Critical For Smartphone Buyers - InformationWeek

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Commentary
6/22/2011
01:58 PM
Eric Zeman
Eric Zeman
Commentary
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4G Not Critical For Smartphone Buyers

But given the bulk discounts available to business buyers, the price difference between 3G and 4G smartphones is likely to be negligible.

Morpace Market Research and Consulting put together a study on the public's perception of 4G and how it pertains to purchasing decisions. The results? Speed isn't everything.

All four of the major network operators--AT&T, Sprint, T-Mobile, and Verizon Wireless--are working on 4G (fourth generation) high-speed data networks. AT&T is using HSPA+ now, though it will graduate to LTE later this year. Sprint is using WiMax. T-Mobile is using HSPA+. Verizon Wireless is using LTE. These networks, and the ad dollars spent hocking them, are costing the carriers some serious coin.

They might not be happy, then, to learn about Morpace's results, which suggest that most people don't consider 4G a critical feature for their next phone.

Most respondents of the study (65%) said that the price of the smartphone is the most important factor impacting their purchase decision. "Network capabilities"--which includes both coverage and speed--ranked second in terms of important, with 58%.

What else factors in to smartphone purchases? Morpace reports that 51% of respondents want a touch screen, 47% are weighing screen size, and 46% say that the phone's brand name is important to them.

More specifically, when looking at the actual carrier and not the hardware, 29% said plan pricing was the most important factor, and network capabilities came in second with 26%. A tiny fraction--just 4%--indicated that network speed was the most important factor in their decision.

It appears that the carriers' marketing dollars are not having an impact. Just under half (48%) said they couldn't see the benefits of 4G when compared to 3G, and only 40% said they'd be willing to pay a price premium for 4G.

"So, with two-in-three consumers not willing to upgrade their contracts for 4G and 60% not willing to pay more for this network, the factors that dictate these choices become very relevant," said Morpace in the report. "One-third of consumers with smartphones who are not likely to upgrade their service to 4G do not perceive 4G as necessary, and are satisfied with their current network capabilities. Twenty-one percent of consumers say that the benefits of 4G are not worth the price increase to them, and another 21% admit to not being 'completely aware' of the benefits of 4G."

What does this mean for enterprise buyers?

Speed typically means that pesky PowerPoint files will download a bit faster; that video conferencing calls might be a bit less bumpy; and that some Internet-based work functions will take less time. The trade-off comes in handset price, though the carriers are pricing their 4G services at very reasonable rates right now. Given the bulk discounts available to business buyers, the price difference between 3G and 4G smartphones is likely to be negligible.

Bottom line: if your workers want 4G, there's no reason not to give it to them unless you're extremely budget-conscious.

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