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Mobile phone usage relatively safe from spending cutbacks
- Leisure expenditure and other consumer electronics are first
in the firing line
Reading (UK) - Tuesday, 31 March 2009
For immediate release
When asked about what measures they would take if they had to
reduce their personal expenditure in 2009, very few consumers said
they would stop using their mobile phone or switch to a cheaper
mobile service, but consumer electronics purchases will be hit much
more severely, according to a survey of 2,400 consumers across
France, Germany and the UK conducted by Canalys in March.
The independent survey gathered consumer opinion on a range of
topics, including mobile applications and web browsing, netbooks,
mobile broadband and demand for location-based services, as well as
the economic downturn and how it might affect mobile phone use and
technology buying in the coming year. Almost 40% of respondents said
they would be more cautious about their spending in 2009 or that the
economic situation was forcing them to change their plans for the
future. A further 37% said they had already taken steps to reduce
their personal expenditure, that the downturn was causing problems
for people around them, or that they were concerned about the effect
on their company. Only 18% thought they would not be greatly
affected by the downturn. The proportion that had already reduced
their spending was highest in the UK, while respondents in Germany
exhibited the most confidence that they would not be directly
affected.
“The results suggest that UK consumers have been worst hit so
far, but confidence is low in all three countries and is likely to
remain so throughout 2009,” said Pete Cunningham, senior analyst at
Canalys. “It is clear that consumer spending will be suppressed this
year, but some sectors will fare better than others.”
When asked what they would do if they had to reduce their
expenditure, the most common response was that people would go out
less often to restaurants, bars and cinemas – cited by 21% as their
first choice of action. This was followed by not taking a holiday
(17%), while a further 8% said they would take a cheaper holiday to
save money. These results do not bode well for the leisure and
travel sectors. A significant 14% said the first thing they would do
is delay buying consumer electronics products, which will also hurt
some in the technology industry, while another 9% would cut back
first on buying DVDs, CDs or on pay-TV services.
“Compared to research conducted in the same countries nine months
ago, the proportion intending to buy a portable navigation device in
the next six months has fallen by 26%,” Cunningham added. “In
contrast, portable PC buying intentions are only 6% lower. Some in
the industry may be looking forward to more people staying in and so
spending more on digital entertainment, but this area will be hit as
well.”
In better news for the mobile phone industry, consumers are
highly reluctant to include their mobile phone use in the list of
things to cut back on to save money. However, Canalys still advises
operators to keep a close watch on changing behaviour. While only 1%
said they would stop using their phone to save money, and half of
these were on (the typically less profitable) pre-pay schemes, a
further 4% said they would switch to a cheaper mobile phone service.
The majority of these were on long-term, post-pay contracts.
“Operators will also have to look carefully at the tariffs and
services they offer in order to retain customers,” Cunningham said.
“Only 70% of post-pay customers expected to renew their contract and
upgrade their handset on the same network when their current
contract expired. 20% expected to churn and get a new handset on a
different network, while 10% thought they would keep their handset
and switch to a SIM-only or pre-pay service. Our research into more
detailed mobile application usage also shows that interest in some
services may be starting to wear off and users may view these as
unnecessary costs as belts get tightened. The ability of these
services to lock customers into a network may therefore be badly
weakened.”
The vast majority of mobile phone users expect their levels of
text messaging and voice calling to either stay the same or increase
in 2009. Conversely, far more expect to reduce their downloading of
music or video than will increase it. There are also exciting new
pockets of activity – for example, among those who already have GPS
satellite navigation capability in their phone, more than half
expected their use of maps and navigation to increase this year.
About the research
The research results discussed in this release come from the
Canalys Consumer Mobility Analysis service, which provides insight
into the changing behaviour, attitudes and expectations of mobile
consumers. It provides clients with forecasts of future application
and service adoption, as well as analysis of critical end-user
issues and reaction to new initiatives, technologies, products and
services, all supported by an extensive field survey programme and
delivered through reports, presentations and direct access to the
Canalys analysts.
About Canalys
Canalys specialises in delivering high quality market data,
analysis and advice to the world’s leading technology vendors. It is
recognised as a key provider of continuous advisory services and
confidential custom projects for marketing managers and strategists
within blue-chip IT, telecoms, navigation and consumer electronics
companies. It has unrivalled expertise in routes to market for all
kinds of high technology products and services in the consumer, SMB
and large enterprise segments, and provides worldwide market data
and trends analysis.
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