News Column

Parks Associates: Consumers Prefer Unsubsidized Smartphone Handsets

June 28, 2014

In anticipation of Amazon's announcement of a rumored smartphone and subsidized mobile data plan, Parks Associates highlighted new research showing over two-thirds of U.S. mobile phone subscribers prefer data plans that cover only smartphones, while one-third prefer plans that would extend to multiple devices, such as tablets and laptops.

According to a release, furthermore, over two-thirds of U.S. mobile phone subscribers prefer to purchase a smartphone at full price if it eliminates the contract and lowers their monthly fee. Lower-income households are especially likely to prefer unsubsidized handsets, according to data from Parks Associates, which reflects wider use of prepaid services among this demographic.

"T-Mobile in particular has tapped into the strong consumer desire for unsubsidized handsets, prompting Verizon and AT&T to make their own competitive offers that include lower monthly fees, unsubsidized handsets, and installment payment options," said Tejas Mehta, Research Analyst, Parks Associates. "It makes sense for Amazon to launch a smartphone in this market. The Internet giant is hoping to expand its footprint by offering consumers better experiences through simplified data plans as well as better retail shopping experiences for mobile consumers."

Nearly 40 percent of smartphone owners use a retail and shopping app on a monthly basis, and the average time spent on retail shopping is one hour per week, according to 360 View: Mobility and the App Economy. This new research project includes data and analysis of a 1Q 2014 consumer survey of 10,000 U.S. broadband households.

"It's not too late for Amazon to launch a smartphone, especially given strong Kindle Fire tablet sales," Mehta said. "Our research shows the Kindle Fire is neck-and-neck with Samsung Galaxy tablets in terms of household ownership in the U.S., with 16 percent of households owning a Kindle vs. 14 percent owning a Galaxy."

Parks Associates is a market research and consulting company specializing in emerging consumer technology products and services.

More information:

www.parksassociates.com

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