Popularity Of Smartphones Boosts Average Cell Phone Price

 Cellular phone battery Consumers are paying more for smartphones these days, and when theysubscribe to services at AT&T Mobility, Verizon and T-Mobile,fewer are getting cell phones for free. That's according to theJ.D. Power and Associates "2008 U.S. Wireless Mobile PhoneEvaluation Study-Volume 1" released Thursday. The averageprice jumped $9, to $101, during the past six months. The increasemarks the highest average price paid for a wireless device sincethe study's inception in 2003. Consumers who participated in thestudy attribute the price hike to the recent surge in popularity ofsmartphone devices, such as the Reach In Motion (RIM) Blackberry,Palm Treo and Apple iPhone, as well as music-enabled handsets thattypically cost more when first released. Kirk Parsons, senior director of wireless services at J.D. Powerand Associates, says consumers like the ease of use in smartphones,especially those that have a full keyboard and touch screens."Discounts on pricing in advertisements get consumers in thestore, but sales are mainly driven by design and functions on thephone," he says. Sales of smartphone devices rose 6.3% during the past year, up from1.7% in overall market share at the beginning of 2007. The current average reported purchase price for smartphone devicesis $208, much higher than the average price paid price of $58 forphones with fewer features. Parsons says smartphones will continueto rise in price as more consumers move from standard cellularphones to those that connect to the Internet, and have music andvideo capabilities. The study also reveals that fewer customers--36% to 33% during thepast six months--say they received a free handset when signing upfor service. The study measures customer satisfaction with wireless handsets byexamining five factors. Physical design ranked 24%; operation; 22%;features, 20%; handset durability (19%); and battery function, 15%. Sony Ericsson tops the list in overall wireless customersatisfaction for a second consecutive time with a score of 740points on a 1,000-point scale. LG ranks No. 2 with 721 points, alsoabove the industry average. "We're hearing a lot about thenext version of the iPhone coming out in the next month or so andthat should impact the industry," Parsons says. The study also suggests several key wireless handset trends. Seventy-four percent of all cell phones have a clamshell design, up24% from 2006. This compares with 21% for the candy-bar style and5% for the slide-cover design. The average length of cell phone ownership is 17.7 months, up from16.6 months in 2006. Style ranks highest, 41%, as the reasonconsumers chose their cell phone. Free follows with 25%; ease ofuse, 23%; discounts/reduced price; 21%; digital camera features,18%; and a variety of features and small size, 17%. Volume 1 of the 2008 U.S. Wireless Mobile Phone Evaluation Study isbased on experiences reported by 18,093 wireless users who haveowned their current mobile phone for less than two years. Theresults are from the two most recent studies conducted in September2007 and January 2008.