Loyalty Threat To Handset Manufacturers

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Phone manufacturers have had a wake-up call on brand loyalty as the latest figures from Kantar Worldpanel ComTech show that consumers are increasingly choosing phones because of their operating system (OS) rather than handset brand.

57% of all phones bought in the 12 weeks to 20 March 2011 were smartphones, compared with only 31% in 2010. As a result, there is a growing awareness among consumers about operating systems.

Fiona Keenan, Consumer Insight Director at Kantar Worldpanel ComTech, explains: “Although some consumers still need educating about operating systems awareness is growing and this is starting to influence consumers’ purchasing decisions.

“12% of smartphone owners claim they will choose their next handset solely based on its OS and a further 44% say it will play a part, demonstrating loyalty is starting to shift towards OS providers. This will be a big challenge for handset manufacturers, who will need to find a way of connecting further with their customers or alternatively working more directly with OS providers to offer consumers something that differentiates them from their competitors in the handset world.”

Loyalty to operating systems varies by provider, with loyalty at its highest amongst Android users at 25%, compared to only 8.9% amongst Blackberry users. As Android continues to grow (in the latest 12 weeks Android accounts for 43% of Smartphone sales) and becomes available across many handset brands consumers will have more and more options to remain loyal to their OS whilst opting for a different handset brand each time.

Fiona continues: “There is also a clear link between how engaged a consumer is with their phone and loyalty to the OS. Among heavy smartphone users, those that download more than five apps a month, the OS is more likely to influence their decision, with 18% of heavy users stating they would base their purchase choice on the OS.”