47 per cent of all mobile owners in the UK now use a smartphone, according to the latest research from YouGov’s Technology and Telecoms team. Apple’s iPhone leads the way with close to 30 per cent share of the smartphone market. Blackberry is on 17 per cent, having steadily lost share over the past two years. Samsung and HTC have gained in popularity, increasing their shares to 20 per cent and 17 per cent respectively.
Despite resistance from feature phone owners, YouGov anticipates that smartphones will dominate the market, with a clear majority (over 55 per cent) within the next 12 months. This, YouGov says, puts the onus on the feature phone market, as they represent key conversion opportunities for manufacturers. Samsung, in particular, has a firm presence in both smartphone and feature phone markets – 20 per cent and 25 per cent respectively – putting it in a great position to convert feature phone users with established products in both markets.
Nokia remains the most popular manufacturer for feature phone owners, holding the largest share of the market, with over 40 per cent. Nokia holds a unique opportunity to capture and convert a sizeable proportion of the feature phone market. Unlike Samsung, however, Nokia lacks smartphone market share and has famously struggled to capture the current market with its smartphone offerings.
YouGov notes, however, that conversion of the feature phone market will not be easy. The challenge for manufacturers, it says, is converting the ‘Late Majority’ and ‘Laggard’ segments, who are not necessarily technology-focused and who are also sceptical about the value of smartphones. YouGov’s latest SMIX (Smartphone Mobile Internet eXperience) findings confirm this: over 40 per cent of feature phone users say they “have no need for a smartphone”, while over 50 per cent say they are “happy with their regular mobile phone”.
Indeed, scepticism amongst this group translates to less than 40 per cent expecting to switch handsets within the next 18 months, and only 42 per cent of that group expecting to switch to smartphones. In other words, only 16 per cent of current feature phone users will switch to smartphones in the next 18 months.
YouGov’s research indicates that expense appears to be another critical issue with conversion, with between 30 and 40 per cent of feature phone users feeling that “smartphone handsets are too expensive”. For their part, manufacturers have sought to address this issue; with the exception of Apple, most smartphone manufacturers have expanded product lines to include less expensive models, in order to appeal to transitioning feature phone users. And this strategy may be paying off for Samsung and HTC; Apple barely holds its own in the smartphone market, gaining just 30 per cent of feature phone converters. Samsung and HTC, however, grab 25 per cent and 16 per cent respectively. All other things being equal, YouGov predicts that Samsung and HTC will increase their share of the smartphone market over the next year.
This is not the case for Blackberry and Nokia, however, as their diversified product portfolio strategy does not appear to be paying off. Blackberry has suffered from well documented problems both in the UK and worldwide. Nokia, despite currently having the lion’s share of the feature phone market, has been unable to convert this base to its smartphone models (Lumia) and, says YouGov, may capture just 4 per cent of feature phone converters within the next 18 months.
“This situation may be a case of Nokia coming to the smartphone party, too little and too late – their loss of share may be permanent”, says John Gilbert, consulting director in YouGov’s Technology and Telecoms team. “To address the various barriers to smartphone conversion requires a better understanding of the complacent and currently satisfied feature phone market. Smartphone features, such as the wide variety of apps, need to be communicated more effectively, as they will play an increasingly crucial role in handset selection in future”.