© 2013 J.D. Power & Associates, McGraw Hill Financial. All Rights Reserved.J.D. POWER & ASSOCIATES PROPRIETARY AND CONFIDENTIAL—FOR INTERNAL USE ONLY
What Today’s Consumers Expect From Wireless Devices
5/8/2013
Kirk Parsons
Senior Director, U.S. Telecom
Key Insights and Trends
2© 2013 J.D. Power & Associates, McGraw Hill Financial. All Rights Reserved.J.D. POWER & ASSOCIATES PROPRIETARY AND CONFIDENTIAL—FOR INTERNAL USE ONLY
What Today’s Consumers Expect From Wireless Devices
• About J.D. Power & Associates
• Mobile Device Market & Landscape
• Key Elements to Customer Satisfaction (CSI)
• Tablet vs. Smartphone
• Summary
• Questions & Answers
Agenda
3© 2013 J.D. Power & Associates, McGraw Hill Financial. All Rights Reserved.J.D. POWER & ASSOCIATES PROPRIETARY AND CONFIDENTIAL—FOR INTERNAL USE ONLY
What Today’s Consumers Expect From Wireless Devices
About J.D. Power & Associates
� Analyzes millions of consumer/B2B
opinions, perceptions, and
expectations each year
� Helps companies and industries
improve via quality/satisfaction
data from verified owners and
provides performance
improvement training
� Serves as a performance
benchmark in numerous industries
� Independent and unbiased;
credible and trusted
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What Today’s Consumers Expect From Wireless Devices
Voice of the Customer Data and Analysis
Syndicated Research Studies
Call Centre / Retail Solutions
Strategic Research
J.D. Power helps clients measure,
understand, and improve the key
performance metrics that drive growth
and profitability.
Co
reP
erf
orm
an
ce
Imp
rov
em
en
tC
on
sult
ing
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What Today’s Consumers Expect From Wireless Devices
How has the Market Evolved?
Source: J.D. Power Syndicated Studies ‘08 – ‘12
Tablet
2012 – 18%
2013 – 30%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2008Q3
2008Q4
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
% Share of Devices
Share of Mobile Devices
Feature Phones Smartphones
Smartphones overtook feature phones in 2011. Tablet may pass feature phones in 2014.
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What Today’s Consumers Expect From Wireless Devices
What are the Key Drivers of Satisfaction?
Smartphone
Customer Satisfaction Index Weights:
2013 Vol. 1
Tablet
Customer Satisfaction Index Weights:
2013 Vol. 1
Performance
33%
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What Today’s Consumers Expect From Wireless Devices
How have Smartphone Satisfaction Drivers Changed?
Smartphone
Customer Satisfaction Index Weights:
2007
Smartphone
Customer Satisfaction Index Weights:
2013 Vol. 1
Performance
33%
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What Today’s Consumers Expect From Wireless Devices
What about More Recent Changes?
Primary Reason for Selecting Smartphone
Features become less
important because device
is customized by apps
Features over-index during the selection process. As the prior slide indicates, ultimately, Performance, Ease of Operation, and Styling are just as important.
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What Today’s Consumers Expect From Wireless Devices
OEM Scorecard
12352
2013 Smartphone Satisfaction V1 2013 Tablet Satisfaction V1
Far more variation between top and bottom performers in the Smartphone industry, where
cost is less of a factor.
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What Today’s Consumers Expect From Wireless Devices
Tablet and Smartphone Factor Performance
There are substantial variations between the highest and lowest ranked performers in certain
factors.
N/A
Index Variation between Best and Worst Performers
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What Today’s Consumers Expect From Wireless Devices
How do Smartphone and Tablet Scores Compare?
Performance Attributes
Tablet is significantly better in:
� Battery Performance (1.17)
� Reliability of OS (0.74)
� Processing speed of OS (0.56)
� Camera picture and video quality (0.18)
Overall Index
Performance
Ease of Operation
Design
Features
Factor Score Comparison
Index Point Difference
Tablet Worse Tablet Better
For Smartphones, performance gaps are most evident in Battery Life and Reliability of the
Operation System.
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What Today’s Consumers Expect From Wireless Devices
What are the Implications? If mobile device owners are so satisfied, why is customer loyalty so low for OEMs relative to Tablets? How do you increase your share of the rabidly loyal customers?
15%Definitely will buy
next Smartphone
from same OEM
30%Definitively will buy
next Tablet from
same OEM
16%Smartphone users
strongly agree
committed to OEM
27%Tablet users
strongly agree
committed to
OEM
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What Today’s Consumers Expect From Wireless Devices
Customer Experience – Why it Matters?Most manufacturers receive good ratings. To ensure commitment in this market, you need an outstanding experience, not just quality hardware.
Source: 2013 U.S. Smartphone Study Vol. 1
Smartphone Repurchase Rates
Commitment to OEM
Smartphone Brand Advocacy
% Definitely Will Repurchase
% Definitely Will Recommend Brand
% Strongly Committed to OEM
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What Today’s Consumers Expect From Wireless Devices
Customer Experience – Why it Matters?
Source: 2013 Tablet Study Vol. 1
Tablet Repurchase Rates
Commitment to OEM
Tablet Brand Advocacy
% Definitely Will Repurchase
% Definitely Will Recommend Brand
% Strongly Committed to OEM
Achieving a “delighted” experience is even more critical among the Tablet segment – where repurchase and commitment rates reach 60%.
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What Today’s Consumers Expect From Wireless Devices
What Attributes Drive Repurchases?
Smartphone
� Overall battery performance
� Timeliness of syncing between
hardware
� Availability of multimedia
functions
� Navigating around phone menu
system
� Processing speed of
operating system
Tablet
� Location of non-display
buttons/controls
� Navigating through the tablet
� Variety of pre-loaded
applications
� Adjusting tablet settings
� Availability of manufacturer
supported accessories
For Tablet customers to commit to a repurchase, improvements in app stores must be made. Battery life is the crucial differentiator for smartphones.
Top 5 Attribute Gaps Between “Definitely” and “Probably” Will Repurchase
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What Today’s Consumers Expect From Wireless Devices
How do Usage Activities Differ Between Devices?
Emailing and social media activity remains higher on Smartphones.
Source: 2013 Vol. 1 Tablet Study
Weekly Usage by Device
Ho
urs
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What Today’s Consumers Expect From Wireless Devices
Impact of Apps on Tablet Satisfaction
Sources: 2012 and 2013 Vol.1 Tablet Studies
Heavier apps usage results in higher satisfaction as they increase engagement and act as a means to customize a device. Satisfaction is higher among those paying for apps.
2013
Ove
rall
Ta
ble
t S
ati
sfa
ctio
n
Number of Apps Downloaded per Month
2012
Ove
rall
Ta
ble
t S
ati
sfa
ctio
n
Number of Apps Downloaded per Month
Avg. # of paid apps – 2.5
Avg. # of free apps – 6.48
Avg. # of paid apps – 1.46
Avg. # of free apps – 4.8
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What Today’s Consumers Expect From Wireless Devices
Impact of Cost on Tablet Satisfaction: Osat Sweet spot
appears between $300< $500
Source: 2013 Vol.1 Tablet Study
Tablet Factor Satisfaction by Price Point
Tablet “Key” Attribute Satisfaction by Price Point
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What Today’s Consumers Expect From Wireless Devices
Tablet and Smartphone Sales Experience
Sources: 2013 Tablet Study Vol. 1 and 2013 Full-Service Purchase Experience Vol. 1
Tablet Sales Channel
Impact of Sales Channel on
Tablet Satisfaction
Smartphone Sales Channel
Impact of Sales Channel on
Smartphone Satisfaction
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What Today’s Consumers Expect From Wireless Devices
Tablet Sales Experience
Source: 2013 Tablet Study Vol. 1
Heavier apps usage results in higher satisfaction as they increase engagement and act as a means to customize a device. Satisfaction is higher among those paying for apps.
Impact of Sales Experience on Tablet
Satisfaction
Sales Satisfaction - Purchase Channel
Impact of Sales Experience on Smartphone
Satisfaction
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What Today’s Consumers Expect From Wireless Devices
Tablet Sales Experience
Source: 2013 Tablet Study Vol. 1
There are a variety of reasons why consumers choose to purchase their tablet brand. These reasons vary by manufacturer. Manufacturers should be mindful of this and tailor advertisements and marketing campaigns to these main reasons.
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What Today’s Consumers Expect From Wireless Devices
Tablet Sales Experience
Source: 2013 Tablet Study Vol. 1
Consumers who select their device due to past experience with other products are the most satisfied with their tablet vs. those who select their device due to lower price tend to be less satisfied.
Overall Satisfaction by Main Reason for Purchase
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What Today’s Consumers Expect From Wireless Devices
Impact of Sharing Tablet
Source: 2013 Vol.1 Tablet Study
Number of People in Household Who Use Tablet
Number of Users Overall Satisfaction “Definitely Will” Repurchase
1 824 28%
2 830 31%
3+ 836 36%
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What Today’s Consumers Expect From Wireless Devices
What about the Product Ecosystems?
*Data is dependent on consumer’s understanding of OEM’s other offerings.
Because of increased familiarity and synergy across operating systems, customers who have tablets and smartphones made by the same OEM are more satisfied on average.
Impact on Tablet IndexImpact on Likelihood to
“Definitely” Buy Other Electronics
from Tablet OEM*
Manufacturer A
Manufacturer B
+11
+23
39% vs. 46%
21% vs. 24%
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What Today’s Consumers Expect From Wireless Devices
In Summary…
� Customer preferences and requirements have been evolving as Tablets become
more common place and being shared within the household
� Top performing OEMs have better understanding of customers preferences as it
relates to their target audience
� Customer usage patterns vary based on number of devices they own and across
similar ecosystems – sharing of content is rising
� Applications that increase personal productivity significantly improve customer
satisfaction but users are becoming more discerning in which apps are being
downloaded
� Seamless and transparent user experience across smart devices is important for
brand loyalty and future repurchase – shopping experience can positively impact
device satisfaction performance.
Customer experience is key to brand loyalty and repurchase commitment
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What Today’s Consumers Expect From Wireless Devices
Before We Conclude…Upcoming Device Studies
� 2013 Device V2 studies cover field period between January – August,
2013. Handset is an annual study offering.
� There will be two Tablet studies offered in 2013.
� Smartphone and Traditional Handset awards now at the Carrier/OEM
brand level
2013 Wireless Report Schedule
Study# of Awards Per
ReportAward Classification
Fieldwork
Waves
Pre-Release
Date
Report Release
Date
2013 Handset – Volume 2Four (one per Tier 1
Carrier)
Brand that achieves “highest” overall
satisfaction among model ownership < 1 year
per Tier 1 carrier
Jan - Aug 2013 Oct 22, 2013 Oct 24, 2013
2013 Smartphone CSI – Volume 2Four (one per Tier 1
Carrier)
Brand that achieves “highest” overall
satisfaction among model ownership < 1 year
per Tier 1 carrier
Jan - Aug 2013 Oct 22, 2013 Oct 24, 2013
2013 Wireless Tablet – Volume 1 OneBrand that achieves “highest” overall
satisfaction among model ownership < 1 yearJan - Feb 2013 April 23, 2013 April 25, 2013
2013 Wireless Tablet – Volume 2 OneBrand that achieves “highest” overall
satisfaction among model ownership < 1 yearMarch - Aug 2013 Nov 5, 2013 Nov 7, 2013
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What Today’s Consumers Expect From Wireless Devices
Questions?
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What Today’s Consumers Expect From Wireless Devices
For more information, contact:
Kirk Parsons, Senior Director, U.S. Telecom
[email protected] | 203.663.4120