smartphone demand sinks to 9 year low - changewave research | vocul: smartphone buying: 90 day...

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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 April 25, 2017

Smartphone Demand Sinks to 9 Year Low

451 Research | VoCUL: Smartphone Buying: 90 Day Outlook


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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.



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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


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%



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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.



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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.



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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)


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



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Table of Contents

Summary of Key Findings................................................................................................................ 6 The Findings ..................................................................................................................................... 8

Overall Consumer Smartphone Purchasing ............................................................................. 8 Next 90 Days: Smartphone Manufacturer Demand ................................................................ 8 Customer Satisfaction ............................................................................................................ 11 Mobile Operating Systems: iOS vs. Android .......................................................................... 12 Other Smartphone Trends .................................................................................................... 13

VoCUL Research Methodology ..................................................................................................... 17



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The Findings

Introduction: 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.

Current Survey Feb ‘17

Previous Survey Feb ‘16

Previous Survey Aug ‘15

Smartphone Upgrade Cycle 38 Months 36 Months 34 Months

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.



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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.

Among planned Samsung buyers, the Galaxy S7 (27%) is most popular, followed by the S7 Edge (12%). Another third (32%) chose ‘Other’ – a sign that many Samsung buyers were anticipating a new model announcement.

Planned Samsung Buyers: Next 90 Days


Galaxy S7 27%

Galaxy S7 Edge 12%

Samsung Galaxy S6 7%

Samsung Galaxy S6 Edge 0%

Samsung Galaxy S6 Edge+ 0%

Samsung Galaxy Note 5 5%

Don’t Know 16%

Other Samsung 32%

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.



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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.

The iPhone 7 (35%) continues to garner greater interest than the 7 Plus (29%). Another 24% say they don’t yet know which model they’ll purchase or chose Other.

Planned Apple Buyers: Next 90 Days


Apple iPhone 7 35%

Apple iPhone 7 Plus 29%

Apple iPhone 6s 5%

Apple iPhone SE 2%

Apple iPhone 6s Plus 5%

Don't Know / Other Apple 24%

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.



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Both LG (4%) and Motorola (3%) are seeing upticks, but remain stuck in the low single digits. Here are the complete findings for manufacturer preferences among future buyers:

Who is the manufacturer of the Smartphone you plan on buying?







Apple 38% 54% 65% 46% 46% 50%

Samsung 22% 15% 14% 31% 29% 19%

Google 5% 6% NA NA NA NA

LG 4% 2% 1% 2% 3% 3%

Motorola 3% 2% 2% 2% 1% 2%

BlackBerry 2% 2% 1% 0% 1% 2%

Microsoft 1% 1% 0% 2% NA NA

HTC 1% 1% 0% 0% 1% 1%

Nokia 0% 0% 0% 1% NA NA

Don't Know/Other 23% 16% 14% 17% 19% 24%


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%).

How satisfied are you with your current Smartphone?

Apple Samsung Motorola LG

Very Satisfied 62% 47% 47% 33%

Somewhat Satisfied 34% 47% 46% 60%

Somewhat Unsatisfied 3% 6% 4% 5%

Very Unsatisfied 0% 1% 2% 2%

Don’t Know/No Answer 0% 0% 1% 0%



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Here’s a closer look at Apple satisfaction ratings for specific models:

iPhone 7

iPhone 7 Plus

iPhone SE

iPhone 6s

iPhone 6s Plus

iPhone 6

iPhone 6 Plus

Very Satisfied 69% 76% 70% 64% 71% 59% 65%

Somewhat Satisfied 27% 22% 28% 34% 26% 37% 34%

Somewhat Unsatisfied 2% 1% 0% 1% 2% 3% 1%

Very Unsatisfied 1% 0% 0% 0% 0% 0% 0%

Don’t Know/No Answer 0% 1% 1% 0% 0% 0% 0%

A Closer Look at Brand Buying Intentions 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 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%

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.



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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.



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Here’s a complete list of the most important smartphone features:

Which of the following features are most important to you when deciding which smartphone to purchase?

Planned Smartphone Buyers: Next 90 Days


Long Battery Life 84%

Camera Quality 62%

Operating System 59%

Resolution of the Display 51%

Water Resistance/Ruggedness 48%

Weight/Thickness 44%

Large Screen Size 41%

Brand 34%

Compatibility with My Other Devices 32%

Fingerprint ID Sensor 24%

Availability of Specific Apps 24%

Worldwide Access 24%

Voice Activated Digital Assistant 21%

Free Cloud Storage 19%

Free Phone Repair Program 16%

Mobile Payment Capabilities 13%

Built-in Health Monitoring Sensors 12%

Other 6%

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.



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Another 18% say they would most prefer a 6 inch screen or larger – unchanged. What screen size are you most interested in buying?







Less Than 3 Inch Screen 1% 1% 1% 1% 0% 1%

3.0-3.9 Inch Screen 3% 4% 4% 8% 4% 5%

4.0-4.9 Inch Screen 23% 27% 24% 28% 30% 31%

5.0-5.9 Inch Screen 54% 51% 50% 47% 46% 49%

6 Inch Screen or Larger 18% 18% 21% 17% 19% 14%

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.



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Where did you purchase your current smartphone?





Wireless Service Provider 54% 58% 56% 56%

Directly from Manufacturer (e.g., Apple) 12% 12% 12% 11%

Online Retailer (e.g., Amazon) 6% 6% 5% 5%

Big Box Retailer (e.g., Best Buy) 6% 6% 5% 5%

Warehouse Club (e.g., Costco) 5% 5% 4% 5%

Local store 5% 5% 4% 5%

Discount Store (e.g., Walmart) 2% 2% 2% 2%

Specialty Electronics Retailer (e.g., Fry’s Electronics) 2% 1% 2% 1%

Don’t Know/ Someone Else Purchased It for Me 5% 1% 5% 5%

Other 4% 3% 3% 4%



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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]

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smartphone demand sinks to 9 year low - changewave research | vocul: smartphone buying: 90 day...

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