Cell Phones: use new or existing brands?

Consumers typically sign up for cellular service and select a phone made by a cell phone manufacturer. But soon, service providers may start offering their own brand of cell phone. Would consumers select these phones, or want to stay with the brands they know? The latest survey of cell phone users by Harris Interactive shows that a slight majority (54%) of U.S. adult cell phone users say they have no preference for an existing brand or a new one offered by their service provider, while the rest differ in opinion between interest in a new brand (27%) and an existing brand (19%).

These are the results of an online survey of 1,870 U.S. adult cell phone users conducted by Harris Interactive between July 14 and 18, 2006.

Choice is good

About two-thirds (64%) of U.S. adult cell phone users agree that more competition among cell phone manufacturers will lead to product innovation and 40 percent believe it will ensure more choices in the marketplace. Other benefits of having cell phones and service from the same company could be increased compatibility between the handsets and the networks, according to about half (48%) of adult cell phone users, as well as overall lower plan costs (32%).

Not all consumers on board

There is some skepticism about cellular service providers offering their own brand of phones, and approximately one-third (29%) think this actually may result in decreased competition and higher prices in the long run. Similar numbers (30%) agree that smaller wireless service providers who cannot manufacture their own phones will go out of business, and another one in five (21%) feels that wireless service providers lack the design skills to build quality handsets.

Joe Porus, Vice President and Chief Architect for the Harris Interactive Technology Practice said, “Cell phone manufacturing by the large wireless service providers is the next logical step in this market. If they can pull this off, it will give their bottom lines a nice lift, but a failed entry here could start a new phase of consolidations in the industry. This apple is likely too tempting to leave on the tree—new cell phones could be coming your way soon.”

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