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Cell Phone Entertainment Features Overpriced

Mobile Entertainment Services Not Particularly Popular Among American Consumers, IDC Survey Finds

‘Tis the season of consumer electronic spending in the United States. Americans are big spenders when it comes to entertainment content and services for consumer electronics, such as the Xbox, Apple’s iPod, personal computers, and high definition TVs. But American consumers show less enthusiasm for purchasing entertainment services created for their wireless mobile devices. According to an IDC survey of more than 2,500 American wireless subscribers and customers, nearly three-quarters (72.5%) of respondents did not use any data services outside of messaging in the third quarter of 2006.

Steep prices are one of the main reasons Americans are not jumping to subscribe to entertainment services for their wireless mobile devices. According to IDC’s survey, 47 percent of respondents in the key demographic age group of 18 to 24 year-olds complained that mobile data services are ‘too expensive.’ When the survey data was broken down by device type and average revenue per user, this complaint of overpriced data services resonated with respondents who use camera phones and/or spend more than $60 a month for mobile service.

“The fact that four out of ten survey respondents feel they are overpaying for data services does not bode well for the future of this market,” says Lewis Ward, research manager for IDC’s Mobile Consumer Services: Entertainment program. “The survey also revealed a small group of U.S. consumers that believes data services are a bad idea, or worse, degrades the calling experience. Education may help this issue, but it’s clear from the survey results that many people just want to use their mobile phone to make calls.”

In contrast to entertainment services, mobile messaging services, especially short message service (SMS), are much more popular among the consumers surveyed by IDC. In fact, close to half (47%) of survey respondents indicate that they sent or received at least one SMS message in 3Q06. According to IDC, SMS subscription plans have already surpassed the 50% mark, and American consumers spend an average of $3.70 per month for data services. IDC analysts also found that respondents reported a remarkably high average number of text alerts as part of their total message volume. Alerts were defined as SMS/text-based news or information services that respondents subscribed to for their mobile device. Survey respondents indicated that about a quarter of all SMS messages in 3Q06 were alerts, showing the popularity of such services.

About one fifth of consumers purchased at least one ringtone in the quarter, and about one in ten bought a graphic/wallpaper or a game. Youths and those with advanced devices exhibited pronounced adoption rates of most forms of wireless entertainment, including full-track music and video/TV services.

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This IDC study, U.S. Wireless Teen and Adult Consumer Entertainment Survey, 3Q06: Age, Device Type, and ARPU Segmentation (IDC #204303), contains analysis of a survey of 2,506 U.S. teenagers and adult consumer wireless subscribers and customers (mean age: 36.2) fielded in August 2006. It explores relative adoption, spending, and usage levels among common types of messaging (SMS, MMS, IM, consumer email), content (ringtones, graphics/wallpapers, games, and simple applications) and other emerging services types such TV/video, Web/WAP usage, full-track music and streaming radio, ringback tones, and more. The data herein is further segmented by age group, device type, and ARPU range. Detailed analysis is associated with each of the 39 tables, and recommendations based on the results are included.

Meet IDC research analysts at 2007 International CES, where IDC will host three breakfast briefings at the Wynn Las Vegas on January 8th, 9th, and 10th. The briefings will feature IDC’s expert analysts as they discuss opportunities for technology, services, device, content, and hardware vendors to capitalize on trends in consumer markets. Register today at http://www.idc.com/ces.

To purchase this document, call IDC’s Sales hotline at 508-988-7988 or email sales@idc.com.

About IDC
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. You can learn more about IDC by visiting http://www.idc.com.

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