consumer smartphones: 90 day outlook may 2017 … smartphones: 90 day outlook may 2017 ... apple...

This information from 451 Research contains confidential business information. It may not be copied or distributed without permission.

©COPYRIGHT 2017 451 RESEARCH, ALL RIGHTS RESERVED.

Tracy Needham and Andy Golub

Overview: Our latest survey shows smartphone demand sinking to its lowest level of the past nine

years. Within this weakened market there is some positive news for Samsung as it experiences an

increase coinciding with its Galaxy S8 launch. While demand for Apple is down, anticipation of its

next-gen release later this year is likely a key factor.

The March 14-31 survey of 4,075 primarily North American consumers from 451 Research’s Leading

Indicator panel looked at trends in the smartphone market among current owners and planned

buyers, including customer satisfaction and OS preferences.

Another Drop in Planned Smartphone Buying

Planned smartphone buying is down for the second consecutive survey. A total of 8.3% of

respondents plan on buying a smartphone in the next 90 days – 2.7 points lower than the previous

survey in December.

Although we see a decline in purchase intentions each March, this is the lowest reading in nine years.

Recent VoCUL surveys have pointed to a lengthening smartphone upgrade cycle, and the lack of

revolutionary new features are also contributing to the low buying levels.

Consumer Smartphones: 90 Day Outlook May 2017

Smartphone Demand Sinks to 9 Year Low

451 Research | VoCUL: Smartphone Buying: 90 Day Outlook



2

Next 90 Days: Smartphone Manufacturer Demand

Despite the weakened buying environment, Samsung is seeing a 7 point increase since the previous

survey, with 22% of planned buyers saying they’ll purchase a Samsung smartphone in the next 90

days.

Samsung is up a total of 8 points over the past two surveys as it continues to recover from the Note 7

recall last September.

In a further positive, this latest survey was nearly complete before Samsung's announcement of its

Galaxy S8 release, so the impact of the new model is not fully reflected in these next 90-day buying

plan findings. In contrast, our previous two March surveys were conducted after Samsung announced

their next-gen Galaxy S models.

Apple. Apple remains the preferred manufacturer among planned smartphone buyers, with 38%

saying they’ll purchase an iPhone over the next 90 days. This is a notable 16 points lower than

previously, and the combined 27 point drop since September is steeper than what we typically see

two quarters after a new iPhone release.




3

That said, consumers are likely waiting for Apple’s next-gen releases expected in September (i.e., 7s,

7s Plus). There is also speculation that Apple will release a third iPhone with major upgrades to mark

the 10 year anniversary of the iPhone. This is adding to the anticipation of the new iPhone releases –

with possible features including a glass body, 5.8” edge-to-edge OLED display and wireless charging.

Google. Google is still relatively new to the device market with its Pixel smartphone. A total of 5% of

planned smartphone buyers say they’ll purchase a Pixel or the larger-screen Pixel XL – down 1 point

from December.

Both LG (4%) and Motorola (3%) are seeing upticks, but remain stuck in the low single digits.

Customer Satisfaction

Apple also leads in terms of satisfaction, with 62% of iPhone owners saying they’re Very Satisfied with

their smartphone. Samsung (47%) is tied with Motorola (47%), followed by LG (33%).

A total of 80% of current Apple owners who plan on buying a new smartphone in the next 90 days say

it will be another iPhone – still very strong though 4 points lower than a year ago.

Samsung is also seeing a decline in repeat customers from a year ago, with 52% of current Samsung

owners who plan on purchasing a smartphone saying they’ll get another Samsung. But this is up from

December, which mirrors a trend we’ve seen with past Samsung release cycles.

Planned Smartphone Buyers –

Next 90 Days

Current

Survey

Mar ‘17

Previous

Survey

Dec ‘16

Previous

Survey

Sep ‘16

Previous

Survey

Jun ‘16

Previous

Survey

Mar ‘16

Previous

Survey

Dec ‘15

Current iPhone Owners

who plan to buy

an Apple iPhone

80% 91% 95% 87% 84% 87%

Current Samsung Owners

who plan to buy

a Samsung smartphone

52% 48% 49% 68% 60% 46%




4

Mobile Operating Systems: iOS vs. Android

There is a significant shift in preferred OS. Google’s Android (47%; up 12 points) has moved ahead of

iOS (38%; down 14 points) among planned smartphone buyers over the next 90 days. This is not

surprising given buying intentions for Samsung smartphones has increased, while demand for

iPhones is experiencing a decline this quarter.

Demand for Google’s Pixel smartphone is also contributing to the shift towards Android, as are

upticks for LG and Motorola.

While we usually see a March increase for Android, this represents an all-time high and the first time

Android has been the preferred OS among next 90 day buyers in seven years.

Other Smartphone Trends

Important Features. Among planned smartphone buyers, Long Battery Life (84%) tops the list of

features which influence their purchase decision. Camera Quality (62%), Operating System (59%) and

Display Resolution (51%) are also important considerations.

Demand for Big Screens. More than half (54%; up 3 points) say they’re most interested in buying a 5-

5.9 inch screen, making it the most in-demand size. Moreover, the preference for this size has been

trending upward over the past four surveys.




5

Another 18% say they would most prefer a 6 inch screen or larger – unchanged.

Where Consumers Purchased Their Smartphones. A total of 54% say they bought their smartphone

from their Wireless Service Provider. Another 12% purchased Directly from the Manufacturer.

Bottom Line

Our latest results show planned smartphone buying continues to struggle and is now at its lowest

level in nine years.

Within this environment, Samsung shows an increase in demand for the second consecutive survey –

which is good news considering the survey was conducted before the announcement of the new

Galaxy S8 model and the Note 7 recall was only six months ago.

Apple remains the leader among planned buyers, but is showing a notable decline. This is a steeper

drop than normally seen two quarters after a new iPhone release, but is likely due to consumers

waiting for Apple’s upcoming new launches expected in September. The hype surrounding the 10th

anniversary of the iPhone is adding to the typical new model release rumors. We’ll be keeping a close

eye on demand for the new iPhone models in our next survey.

In terms of preferred operating systems, we’re seeing a shift with Android overtaking iOS for next 90

day demand. This is certainly related to Samsung demand trending upward vs. Apple declining.

Google’s relatively new Pixel smartphone is also taking a share of the market, and although demand

is at lower levels for LG and Motorola, both are seeing increases.




6

Summary of Key Findings

Jump in Samsung Demand

� Among respondents

planning to buy a

smartphone in next 90

days, Samsung (22%) is

seeing a 7 point upswing

� Although not as strong as a

year ago, it’s better than

the increase two years ago

during S6/S6 Edge launch

� This survey was nearly

complete when Samsung

announced latest Galaxy

releases

Demand for Apple

� Apple (38%) remains the

leader in planned buying,

but is down 16 points from

previously and a combined

27 points since Sep

� Although steeper than the

drop we normally see,

planned buyers are likely

waiting for new releases

Overall Smartphone

Demand at 9 year Low

� Only 8.3% of respondents

plan on buying a

smartphone in next 90 days

� Lowest reading in nine

years

Demand for Other

Manufacturers

� Google Pixel (5%; down 1

point)

� LG (4%; up 2 points)

� Motorola (3%; up 1 point)

Preferred OS Next 90 Days

– Android Takes Lead

� Android OS (47%; up 12-

pts)

� Apple iOS (38%; down 14-

pts)

Customer Satisfaction

Smartphone Ratings

� Apple (62% Very Satisfied)

� Samsung (47%)

� Motorola (47%)

Brand Loyalty

� 80% of current iPhone

owners buying a new

phone in next 90 days say

it’ll be another iPhone

� 52% of Samsung owners

who plan on buying say

they’ll get another

Samsung

Demand for Big Screens

� 54% of planned buyers say

they’re most interested in a

5-5.9 inch screen

� 18% prefer 6 inch screen or

larger




7

VoCUL: Research Methodology

This report presents the findings of a March 14 - 31, 2017 survey on consumer smartphone buying. A total of

4,075 consumers from 451 Research’s ChangeWave Leading Indicator panel participated.

451 Research’s ChangeWave Leading Indicator panel is a group of 25,000 accredited business and technology

professionals – as well as early adopter consumers – who work in companies across a range of industries. The

surveys measure the pulse of consumer and business spending via weekly demand-based tracking surveys, and

converts the information into a series of proprietary quantitative and qualitative reports.

The intelligence gathered provides a real-time view of companies, technologies, and key market sectors, along

with an in-depth perspective of the macro economy – well in advance of other available sources.

Access our VoCUL research reports here.

© 2017 451 Research, LLC and/or its Affiliates. All Rights Reserved.

Reproduction and distribution of this publication, in whole or in part, in any form without prior written

permission is forbidden. The terms of use regarding distribution, both internally and externally, shall be

governed by the terms laid out in your Service Agreement with 451 Research and/or its Affiliates. The

information contained herein has been obtained from sources believed to be reliable. 451 Research disclaims

all warranties as to the accuracy, completeness or adequacy of such information. Although 451 Research may

discuss legal issues related to the information technology business, 451 Research does not provide legal advice

or services and their research should not be construed or used as such. 451 Research shall have no liability for

errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The

reader assumes sole responsibility for the selection of these materials to achieve its intended results. The

opinions expressed herein are subject to change without notice. Investors should obtain individual financial

advice based on their own particular circumstances before making any investment decisions based upon

information in this report.

About 451 Research

451 Research is a preeminent information technology research and advisory company. With a core focus on

technology innovation and market disruption, we provide essential insight for leaders of the digital economy.

More than 100 analysts and consultants deliver that insight via syndicated research, advisory services and live

events to more than 1,000 client organizations in North America, Europe and around the world. Founded in

2000 and headquartered in New York, 451 Research is a division of The 451 Group. For additional information,

go to: 451research.com.

Contact Information:

451 Research

1411 Broadway, Suite 3200

New York, NY 10018

P: 301-250-2363

E: [email protected]

consumer smartphones: 90 day outlook may 2017 … smartphones: 90 day outlook may 2017 ... apple...

Documents