Mobile form triumphs over function

Matt Lewis/Arc Chart
09 Jun 2008

If there was any doubt, a recent set of metrics from two market research firms show that consumers are placing emphasis on the aesthetics of their mobile phones and are increasingly prepared to pay a premium for it.

According to a survey conducted by J.D. Power and Associates of almost 20,000 mobile phone owners in the US, the average price paid for a handset has increased by US$9 (€5.77) over the past six months, to a record high of US$101 (€64.8).

Furthermore, the number of consumers who reported receiving their phone free-of-charge dropped to 33%, from 36% a year-ago. Both these factors are attributed to increased smartphone sales, which are more expensive even with generous operator subsidies applied to them. Despite their price, consumers are showing their willingness to pay more for feature-rich devices.

In the same study, consumers were asked for the reason behind their choice of handset model. Of the top three reasons given, "Ëœstyle' was the criteria cited by 41% of respondents, coming ahead of "Ëœreceived for free' (25%) and "Ëœease of use' (23%).

In another study by Rubicon Consulting, the firm asked iPhone owners "When you got your iPhone, what model of mobile phone, if any, did it replace‾" The findings are interesting. Unsurprisingly, many of the models replaced were high-end smartphones like Windows Mobile phones (14%), Blackberries (13%) and Palm (7%) devices. However, almost a quarter (24%) of respondents upgraded to their iPhone having previously owned a Motorola RAZR.

If we accept that the RAZR was first and foremost a fashion phone, then the Rubicon findings are at first a little peculiar. While it is logical that a smartphone user would be attracted to a feature-rich device like the iPhone, why have so many iPhone owners migrated over from a single handset model which had virtually no technical merits to speak of‾

As a feature phone, the RAZR's functionality was indistinguishable from the raft of other feature phones on the market at the time. It is true that the RAZR sold enormously well, but not to the extent that 24% of the US phone-carrying public had one.

The iPhone and RAZR share a common feature and is why a disproportionate number of RAZR owners have moved in Apple's direction. It is a feature that has nothing to do with technology and everything to do with style. The RAZR was an iconic device in terms of its design and this was its primary appeal to consumers.

When looking to upgrade 18 months later, many RAZR owners now want to move to something equally stylish and the iPhone fits this bill. And while consumers may have purchased their RAZR subsidised, they have been willing to pay full price for the iPhone to continue owning a phone strong fashion credentials.

We are still a long way from the market widely accepting paying full price for mobile phones since the operator subsidy model is so entrenched, particularly in the Europe and the US. However, the data presented in this piece shows a consumer willingness to take on more cost in exchange for desirable features, be they form of function.

The fact that a proportion of users have purchased an iPhone primarily for how it looks, and not for the wizardry of its technology or sleekness of its user interface, may surprise some in the handset industry but it certainly won't surprise Apple.

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