Analysis of College Smart Phone Market

Kris AndaasDustin Fontenot

Ryan FriedkinSpencer Namnoum

Blake Yancey

Table of Contents

• Executive Summary• Research Purpose• Research Objectives• Survey Findings• Recommendations• Summary of Key Findings• Limitations of Study

Executive Summary • The motivation of this research is find out whether there is a

market at SMU for a new smart phone specially designed for college students: Smart Phone CS, as well as a market for separate phone models for male and females: Smart Phone CSM and CSF.

• The purpose of this research is explore ways of successfully designing and launching a smart phone for male and female college students.

• This research is based on the findings from a sample of 249 SMU students.

Research Objectives/Questions

• What percent of college students own smart phones? Is there a relationship between ownership of smart phones and gender?

• In general, what brand (manufacturer) of cell phone do students currently possess?

• Where did they purchase the cell phone (manufacturer store, carrier store etc.)?

• What price did students pay for their cell phone? Is there a difference in price paid between males and females?

Research Objectives Cont’d

• Did they avail/ make use of a rebate or discount when purchasing? If so, is there a difference between males and females?

• What is the extent of use of various cell phone features? Does the usage differ between males and females?

• How important are various cell phone characteristics – does the importance vary by gender?

• How satisfied are male and female students with their current cell phones on these characteristics?

Research Objectives Cont’d

• What percent of males and females would be on the cell phone market in the next three years?

• What factors and features are important in their next phone purchase – for males and females?

• What app categories they (males and females) would like for their current or next phone purchase?

• What prices are students willing to pay for a phone that meets their needs? Is there a difference between males and females?

Research Objectives Cont’d

• Where (which locations) are students likely to purchase a cell phone on campus?

• What, according to students, are the best ways to communicate information about mobile phones?

Objective 1: Smart Phone Ownership

• 99% of respondents own a smart phone• 7% more men own smart vs. basic phones

than women

82 (92%) 7 (8%)

142 (85%) 26 (15%)

Male

Female

Smart Phone

Basic Phone

= 89 total

= 168 total

Objective 2: Brands

63%11%

10%

9%7%

Sales

AppleSamsungHTCRIMOther

N = 263

Objective 2: Brands Cont’d

• Apple controlled 63% of the market• Men and women own approximately the same

proportion of Apple smart phones• 55% of respondents that named a specific model

listed the fourth generation Apple iPhone (iPhone 4 or 4s)• Of that 55%, 70% were female and 30% were male (note:

more women than men took the survey)

Objective 3: Where Students Purchased Smart Phones

- The Majority of students, 64 percent, purchased their cell phone from the Carrier’s store (i.e., Verizon, AT&T, etc.)

64%16%

7%

13%

Sales

Carrier's store (AT&T, Ver-izon etc..)Manufacturer's store (Apple, Samsung etc.)Online / InternetOther

N = 262

Objective 4: Price Paid

$0 to $50 $51 to $100 $101 to $150 $151 to $200 $201 to $250 Over $250 not sure / don't know

0

10

20

30

40

50

60

16%

10%

12%

23%

14%

16%

10%

Males and Females

• Most students reported spending between $151 to $200 on their smart phone purchase

• Interestingly 10% of respondents didn’t know how much their phone cost

Objective 4 Cont’d: Price Paid

$0 to $50 $51 to $100 $101 to $150

$151 to $200

$201 to $250

Over $250 Not Sure / Don't Know

0%

5%

10%

15%

20%

25%

15%

9%8%

20% 20%18%

10%

17%

10%

14%

24%

11%

15%

10%

Men vs. Women MaleFemale

• Median price paid by men and women is $151 - $200• Mode range price paid by men is $151 - $200 and $201 to $250 / women is $151 - $200 • Mean price paid by men is between $167.90/ women is $151.05

Objective 5: Rebate/Discount

• 58% of respondents used a form of rebate or discount

• There was no significant difference between females and males usage of such a promotion

Objective 6: Feature Usage

Objective 6 Cont’d: Males

Text M

essage

s

Web Bro

wsing

Camera

- Pictu

res

Alarm Clock

Calendar

Global Positi

oning Syst

em (G

PS)

Music Play

er

Camera

- Video

Other

Video Chat

MiFi (W

ireles

s Hotsp

ot)

Bluetooth

0%

20%

40%

60%

80%

100%

120%

100%93% 93% 92% 92% 90%

81% 80% 80%

62%

47%42%

Features Used by Males Greater than Once a Month

Objective 6 Cont’d: Females

Text M

essage

s

Camera

- Pictu

res

Alarm Clock

Web Bro

wsing

Other

Global Positi

oning Syst

em (G

PS)

Calendar

Music Play

er

Camera

- Video

MiFi (W

ireles

s Hotsp

ot)

Video Chat

Bluetooth

0%

20%

40%

60%

80%

100%

120%

99% 96% 96%90% 90% 89% 87%

81%73%

66%

55%

30%

Features Used by Females Greater than Once a Month

Objective 6 Analysis

• Both males and females listed that text messaging was the most used feature on their phone.

• They also agreed that Bluetooth was the least used feature on their phone, although 12 percent more males (42 percent) used this feature than females (30 percent).

Objective 7: Importance of Features

Attribute Mean Importance CI @ (95%)Battery Life 6.38 6.2-6.56Phone Size 5.45 5.18-5.72Speaker Phone 4.9 4.62-5.18Camera 5.36 5.07-5.65Video Capability 4.99 4.66-5.32Internet Connectivity 6.27 5.98-6.56Playing Games 4.48 4.1-4.86Download/Play Music 5.25 4.85-5.65Email 6.1 5.81-6.39Speed of Connectivity 6.07 5.78-6.36Text Messaging 6.67 6.50-6.84Personal Digital Assistance 4.56 4.14-4.98GPS 5.62 5.3-5.95

Males

AttributeMean Importance CI @ 95%

Battery Life 6.49 6.37-6.61Phone Size 5.38 5.17-5,59Speaker Phone 5.2 4.96-5.44Camera 6.24 6.08-6.40Video Capability 5.21 4.95-5.47Internet Connectivity 6.42 6.22-6.62Playing Games 4.13 3.84-4.44Download/Play Music 5.38 5.11-5.66Send E-mail 6.13 5.91-6.35Speed of Connectivity 6.43 6.26-6.60Text Messaging 6.86 6.80-6.92Personal Digital Assistant 4.32 4.03-4.61Global Positioning System (GPS) 5.76 5.53-5.99

Females

Objective 7 Cont’d: Gender Differences Analysis

• Both males and females ranked text messaging and battery life as the most important features

• Both males and females ranked playing games as the least important feature, although the mean rank by males was higher (4.48) than with females (4.13)

Objective 8: Consumer Satisfaction

Objective 8 Cont’d: Gender Differences-Males

3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.53.5

4

4.5

5

5.5

6

6.5

7

7.5

Mean Importance

Mea

n Sa

tisfa

ctio

n

Low Importance, Low SatisfactionStrategy: Ignore?Features: None

High Importance, Low SatisfactionStrategy: Invest or ImproveFeatures: Battery Life

High Importance, High SatisfactionStrategy: Maintain or InvestFeatures: Connectivity, E-Mail, Internet, Texting

Low Importance, High SatisfactionStrategy: Maintain or DivestFeatures: Games, Personal Digital Assistant, Speaker Phone, Video, Music, Camera, Phone Size, GPS

Objective 8 Cont’d: Gender Differences-Male

Battery

Life

Phone Size

Speak

er Phone

Camera

Video Cap

abilit

y

Internet

Connectivit

y

Playing G

ames

Download/P

lay M

usic

Send E-

mail

Speed

of Connecti

vity

Text M

essagi

ng

Personal

Digital

Assista

nt

Global Positi

oning Syst

em (G

PS)0

1

2

3

4

5

6

7

5.29

5.975.63

5.915.7

5.99 5.89 5.976.33

5.82

6.56

5.92 6.016.38

5.45

4.9

5.36

4.99

6.27

4.48

5.25

6.1 6.07

6.67

4.56

5.62

Mean Importance and Satisfaction of Features (Male)SatisfactionImportance

Objective 8 Cont’d: Gender Differences-Females

2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.55.1

5.3

5.5

5.7

5.9

6.1

6.3

Mean Importance

Mea

n Sa

tisfa

ctio

n

Low Importance, High SatisfactionStrategy: Maintain or DivestFeatures: None

High Importance, Low SatisfactionStrategy: Invest or ImproveFeatures: Connectivity, Battery Life

High Importance, High SatisfactionStrategy: Maintain or InvestFeatures: Video, Speaker Phone, Music , Phone Size, GPS, E-Mail, Camera, Internet, Texting

Low Importance, Low SatisfactionStrategy: Ignore?Features: Personal Digital Assistant, Games

Objective 8 Cont’d: Gender Differences-Female

0

1

2

3

4

5

6

7

5.43

6.17 6.1 6.025.82 5.91

5.625.91

6.09

5.66

6.34

5.44

5.91

6.49

5.385.2

6.24

5.21

6.42

4.13

5.38

6.13 6.436.86

4.32

5.76

Mean Importance and Satisfaction of Features (Female) SatisfactionImportance

Objective 8: Consumer Satisfaction Analysis

• Both males and females ranked texting as the feature they were most satisfied with.

• Both males and females ranked battery life as the feature they were least satisfied with.

• Females ranked connectivity as the second feature they were least satisfied with.

Objective 9: Future MarketTotal (Males and Females)

Males

Females

Objective 9: Future Market

82%

18%

Males

YesNo

N=89

85%

15%

Females

YesNo

N=168

• Approximately 82% of Males and 85% of Females said they will be in the market for a new smart phone within the next 3 years

Objective 10: Attribute Determinants of Future Purchase

Objective 10 Cont’d: Female vs. Male

Manufacturer/ Brand name Price

Phone FeaturesSpeed of Internet

Connectivity Carrier Name

0%10%20%30%40%50%60%70%80%

31%41%

77%

28%23%

42%38%

77%

34%

8%

Percent of Student that Assigned Top 2 Ranks

Percent of Female Student that Assigned Top 2 RanksPercent of Male Student that Assigned Top 2 Ranks

Both males and females assigned Top 2 Ranks to Phone Features

Objective 10 Cont’d: Features in Next Phone Purchase

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

78%

14%

45%

75%

63%

87%

45%

59%

87%

62%

99%

44%

69%

21%

61%

48%

25%32%

13%

37%

30%

13%

38%

1%

31%27%

Males Must HavePrefer to Have

For males, the highest must have preferences are Text Messaging, Internet Connectivity, and Email Capabilities. The highest prefer to-have qualities are relative small phone size and speaker capabilities

Objective 10 Cont’d: Features in Next Phone Purchase

0%10%20%30%40%50%60%70%80%90%

100%79%

28%

58%

86%

60%

85%

35%

57%

78% 74%

96%

30%

71%

21%

53%

37%

12%

33%

12%

44%33%

16%23%

4%

39%

24%

FemalesMust HavePrefer to Have

For females, the highest must have qualities are Text Messaging, Camera, and Internet Connectivity. The highest prefer-to-have qualities are Small Phone Size and Speaker Phone

Objective 10 Cont’d

Long batt

ery Lif

e

Small

phone size

Speak

er Phone

Camera

Video Cap

abilit

y

Internet

Connectivit

y

Playing G

ames

Download/P

lay M

usic

Send E-

mail

Speed

of Connecti

vity -

4G

Text M

essagi

ng

Personal

Digital A

ssista

nt

Global Positi

oning Syst

em (G

PS)0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

78%

14%

45%

75%

63%

87%

45%

59%

87%

62%

99%

44%

69%

79%

28%

58%

86%

60%

85%

35%

57%

78%74%

96%

30%

71%

Must Haves: Males vs. Females

Males' Must Haves Females' Must Haves

Both males and females rank text messaging as one feature they must have on their next phone

Objective 10 Cont’d

0%

10%

20%

30%

40%

50%

60%

70%

21%

61%

48%

25%

32%

13%

37%

30%

13%

38%

1%

31%27%

21%

53%

37%

12%

33%

12%

44%

33%

16%

23%

4%

39%

24%

Prefer to Have: Males vs. Females Males' Perfer to HaveFemales' Prefer to Have

Both males and females prefer their next phone to be smaller in size.

Objective 10 Cont’d: Phone Type, Orientation, & Keyboard Preferences

0%

10%

20%

30%

40%

50%

60%

70% 66%

4%

10%

21%

8%

43%40%

8%

44%

28% 28%

61%

2%

10%

27%

6%

34%

50%

10%

55%

18%

28%

Males vs. Females MalesFemales

Both males and females prefer a bar phone, with horizontal orientation and a flat keyboard.

Objective 11: App Preferences Male

navigation

weather

music

socia

l netw

orkinggames

entertainment

newssp

orts

reference

financebooks

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

88%83% 82% 81%

77%

67% 65% 63%57% 56%

44%

Percentage of Surveyors Wanting Application

Percentage of Surveyors Wanting Application

Objective 11: App Preferences FemalePercentages of Female Surveyors Wanting Specified Applications

weath

er

news

book

s

navig

ation

socia

l net

workin

g

refe

renc

e

gam

es

spor

ts

finan

ce

mus

icen

terta

inm

ent

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%91% 90% 88%

80%74% 73%

66%

56%

44%39%

28%

App Preferences (Female)Percentage of Sur-veyors Wanting Ap-plication

Objective 11: App Preferences Analysis

• For specified apps on their next phone, the top 3 applications desired by males were Navigation, Weather, and Music

• Females preferred Weather, News, and Books.• Both Weather and Navigation can be

considered must haves, being in the Top 4 for both male and female students.

Objective 12: Price for New Phone

Taking all responses, male and female, we can see that the average amount college students were willing to spend on a new cell phone was $224.08 with deviating values ranging from approximately $124.00 to $324.00

Objective 12 Cont’d: Gender Differences

Males were willing to pay $43.07 more on a new phone than females. We also see that the lowest value for the Male Confidence interval at 95% is still higher than the highest value Female surveyors were willing to pay for a cell phone.

Mean Price Willing to Pay for

FemalesFemale CI @ 95%

209.76 193.57 225.95

Mean Price Willing to Pay for

MalesMale CI @ 95%

$252.83 228.63 277.03

Male Surveyors: n=72 Female Surveyors: n=143

Objective 13: Location of Future Purchase

- Over fifty percent of students were in agreement that Hughes-Trigg student center is the most likely place on campus that they would purchase a cell phone.- A quarter of the students surveyed said they would most likely purchase at the Barnes and Noble book store on Mockingbird

Hughes Trigg Student Center

Barnes and Noble book store

SMU College website Near dining areas on campus

Kiosk near Fondren library

Other, please specify0%

10%

20%

30%

40%

50%

60%54%

25%

9% 7%3% 2%

Best Locations for Cell Phone Purchase (On Campus)

Percentage of Surveyors Agreeing on Cell Phone Purchase Location (n=210)

Objective 14: Best Method of Communication

Other, please specify

Student orientation sessions

Ads in campus publications such as Daily Campus or Hilltopics

Flyers on campus

Big banners on campus

Bulk email to students

Manufacturer sponsored student event

Word of mouth / viral marketing

Facebook or other social media websites

0% 10%20%30%40%50%60%70%80%90%

3%

18%

21%

27%

28%

35%

41%

68%

81%

Ways Cell Phone Manufacturers Would Be Beneficial in Delivering Information To Students On SMU Campus

Percentage of Surveyors Believing Means of In-formation Would Be Beneficial

Objective 14: Best Method of Communication Analysis

• Over 80% of the student said that social media websites (e.g. Facebook) were the best way to advertise a new phone.

• Roughly 70% of the student said that viral marketing (e.g. YouTube) or Word of Mouth was the best.

Summary of Key Findings & Recommendations

• Over 80% of both male and female participants currently attending SMU are looking to purchase a new phone within the next 3 years. With cell phone technology continually improving and cell phone users choosing to purchase new phones more frequently, we can infer that there is a demand for cell phones in the college market within the next few years.

• 80% of respondents said that they believed the best method of advertising was with social media tools

• 70% of respondents also believed viral marketing was an effective means of advertising to college students

• With a high preference towards battery life, we could potentially offer a phone with better battery life by removing features that both males and females agreed they do not care about or investing in developing either more efficient hardware (e.i. processor) or more powerful batteries

Summary of Key Findings Cont’d• Utilize cloud storage to maximize performance and data storage while

potentially shrinking size or device, weight, battery use, etc. • There are varying responses and differences between the feature

preferences of males and females. For example, in terms of application desirability, females ranked Music in the bottom 3 while males have it as the 3rd highest) Specifically, we would try to lower data space by minimizing games installed on phones and removing Bluetooth features

• Due to the low preference rating of Sports and Finance apps, rely on outside applications to deliver the needs of these features (e.g. Yahoo Finance, Forbes, etc.)

• With our information on cell phone design, we would recommend research and development of a horizontally oriented bar phone with a flat keyboard.

• Women were unsatisfied with the connectivity of their phones perhaps a connectivity assistance (troubleshooting) app would be worth developing

Summary of Key Findings Cont’d• Because of the higher willingness to pay for males, potentially offer additional

features and apps (“Upgradeable version of phone” targeted at male college students) that could increase our profits

• From our research we can see that internet connectivity and text messaging (along with battery life) are the most desired features for students. Focusing on these needs, we recommend creating a phone designed around these college student priorities (text, email, surf the internet- facebook, twitter, etc), and expand the speed/performance capabilities of the features pertaining to these preferences.

• While it’s clear that the Apple Iphone is the most popular phone amongst students, our research shows that manufacturer name, while important, is not the biggest determinant amongst students when they purchase a phone. This gives us an advantage because while we may not have the top brand name, our phone offers all of the features that the Iphone does without the nagging deficiencies like poor battery life– Research showed that while manufacturer name was important (42% males, 34% females), it

is often not a dealbreaker when students buy phones. Meaning, a phone designed ideally for college students could potentially grab a large share of the market without a major brand/carrier name.

Summary of Key Findings Cont’d• The important thing that college students want is the ability to access as many

additional features and applications as possible, creating an emphasis on personalizing the individual’s phone for their specific needs. With that said, this potential phone does not have to come fully equipped (games, digital assistant) but have the speed and capability to add those features at a later date

• While participants did prefer to have a smaller phone, it was not predominantly a must-have feature. However, based on our respondents preference for longer battery life and the ability to download applications to their phone directly, we believe they would be willing to sacrifice data storage for a larger phone with greater battery life.

• We found in our research that 58% of respondents used a rebate or discount of some sort when they purchased their phone. This information could be very key in marketing to college students and penetrating the market and gaining market share. By offering a rebate, students may be more willing save some money and try our phone.

• Seeing that most respondents said they planned on purchasing a new phone in the next 3 years, setting a high price for our new phone is not crucial to ensure profitability. If we set the price of our phone to the lowest value of the 95% confidence interval pertaining to “price willing to pay”, we will be able to enter the market and maintain customer loyalty with a phone catered to college careers

Limitations of Study The intent of the survey was to ascertain the potential market for a

smartphone designed and marketed specifically for college students, the latent assumption being that the most salient and desirable features in terms of the phones’ hardware, software, how it is sold/marketed are different for college students than for adults, children, high-schoolers etc. However, as we have not conducted a survey of these other market segments it is difficult to say whether or not there is consensus on which features are desirable and important. In other words we are operating on an unproven assumption (what college students want in a smart phone is different than what other segments want). Until similar research is conducted our conclusions, while informative, cannot be considered conclusive.

Limitations of Survey Cont’d• Survey Size (216 respondents) is relatively small and limited to one

university• Demographic of individuals taking the survey is limited to the researchers

“immediate circle”, providing bias feedback and an uneven distribution among college students - Students only from SMU, 60% being female, and 70% of the participants being in their last years of college (Junior year and above).

• No question on socioeconomic background, SMU probably isn’t the typical university in this regard

• Low Importance Rating on Cell Phone Carrier (hard for a specific carrier to enter to the market with a phone tailored to college students with significant profitable impact)

• The reliability of college students to truthfully complete the survey: we must assume the length of the survey and lack of information could have deterred some students from completing the survey correctly and honestly.