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J.D. Power and Associates Reports:
Smartphones Are Not Just for Business Use Anymore, as Consumers
In Canada Find Additional Mobile Phone Functionality and Features Appealing
Apple Ranks Highest among Mobile Phone Providers; Koodo Mobile and Virgin Mobile Each Rank Highest in Satisfying Wireless Service Customers in Canada
TORONTO: 19 November 2008 — Wireless users in Canada indicate strong interest in new customer-focused smartphones, such as the Apple iPhone, according to the J.D. Power and Associates 2008 Canadian Wireless Customer Satisfaction StudySM released today.
Now in its fourth year, the study examines perceptions of wireless customers with their service, mobile phone and retail experience. Rankings are provided for contract postpaid service, prepaid service providers, and mobile phone providers. Customer satisfaction with contract postpaid service and prepaid service is measured in five factors: call quality; billing; service plan options; cost of service; and customer service. Mobile phone satisfaction is measured based on customer ratings of five factors: features; physical design; durability; battery; and operation.
The study finds that 25 percent of wireless users in Canada currently own a smartphone, and more than 65 percent of these users indicate they “definitely will” or “probably will” purchase another smartphone device as their next mobile phone. Smartphone users also report being more satisfied with their device compared with traditional mobile phone users, with scores averaging 739 points on a 1,000-point scale among smartphone users, and 692 points among traditional wireless users. However, smartphone users spend nearly twice as much for their monthly wireless service compared with traditional mobile phone users ($97 vs. $51, respectively).
Apple, which launched the iPhone in Canada in the summer of 2008, ranks highest in customer satisfaction among mobile phone providers with a score of 783. In particular, Apple performs well in the operation, features and physical design factors. Sony Ericsson follows in the ranking with a score of 742, performing particularly well in the battery factor. BlackBerry ranks third in the segment with 739.
Among postpaid wireless service providers, Koodo Mobile, which launched its service earlier this year, ranks highest with a score of 771, performing particularly well in cost of service, call quality and billing. Virgin Mobile follows Koodo Mobile in the ranking with 752, performing well in the service plan options factor. SaskTel ranks third at 706 with particular strength in customer service.
Virgin Mobile ranks highest among prepaid wireless service providers with a score of 731, performing particularly well in all five factors driving prepaid wireless customer satisfaction. PC Mobile (688) and Telus Mobility (662) follow Virgin Mobile in the ranking.
The study also finds that despite strong customer interest in smartphone devices, wireless users in Canada are not as interested in subscribing to a data package—which commonly allows users to browse the Internet, send and receive e-mails, and download ring tones, MP3 files and games. While 24 percent of wireless users in Canada report having a data package, a majority of wireless users do not intend to subscribe to a data package in the near future. Key reasons cited for customer reluctance include not having a need for Internet access (57%) and the service is too expensive (31%).
“We see a clear interest among consumers in owning smartphones that have enhanced functionality, but not necessarily a corresponding interest in subscribing to data packages,” said Lubo Li, senior director at J.D. Power and Associates, Toronto. “One element potentially keeping consumer usage and interest down is the higher data plan costs, since the average amount spent for monthly service among data plan users is $102, compared with only $50 among non-data plan customers. This presents an opportunity for a competitive advantage among providers who could offer consumers smart data solutions and better value for the money.”The study also finds a strong relationship between customer satisfaction and loyalty. Among users who say they are very satisfied with their wireless service providers, 83 percent indicate that they “definitely will” continue using the same provider. In contrast, loyalty declines to 43 percent among those who indicate that they are only somewhat satisfied. “The impact of satisfaction on loyalty is consistent across both the wireless service and mobile phone segments,” said Li. “Maintaining customer satisfaction is critical for wireless service and mobile phone providers in order to increase retention rates, which inevitably positively impacts the bottom line.” The 2008 Canadian Wireless Customer Satisfaction Study is based on responses from nearly 15,000 mobile phone users. The study was fielded in October 2008.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on boat ratings, car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2007 were $6.8 billion. Additional information is available at http://www.mcgraw-hill.com/.
No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate
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What does J.D. Power and Associates do?J.D. Power and Associates' research, consulting, and performance improvement services are used by a variety of industries to improve product quality and customer satisfaction. The firm's research is based solely on responses from millions of consumers and business customers worldwide. Product and service rankings that result from this research reflect the opinions of consumers and business customers-not the opinion of J.D. Power and Associates. Rankings are derived from nationally syndicated studies that serve as industry benchmarks for measuring and tracking quality and customer satisfaction. J.D. Power and Associates conducts the research, publicly announces the results, and then offers analysis based on consumer feedback to product and service providers to help them improve their businesses.
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