Don't Write Off The Dumb Phone Yet

With Verizon predicting that half its user base will have smartphones by the end of the year, up from 25% now, it is easy to forget how important the humble featurephone remains to carriers' overall customer numbers. It does far less for data revenues than its big cousin, of course, but AT&T in particular has embraced the 'dumb phone' with its focus on midrange models running Qualcomm Brew and supporting messaging and browsing. Such moves are making it easier for many consumer categories to stick with featurephones, and according to a survey by Compete.com, 65% of US wireless users will make that choice when they come to place their current handset.

Focal Points:

• About 10% would trade up to an AT&T-style 'quick messaging device' with browser, and 35% to a full smartphone, with that figure split about evenly between an advanced and an inexpensive model. Not every respondent who currently owned a smartphone would upgrade - some were looking to move to a cheaper model next time, for economic reasons or because they had invested in another wireless device such as a tablet.
• Across all four national networks, that left over half of phone users willing to stick with basic handsets. The enthusiasm for smartphones was highest on the Sprint network, perhaps because it has had a 4G offering for the longest - 46% would opt for a smartphone at their next move, only 5% for a QMD, and 49% for a featurephone. The pattern on the two GSM networks, T-Mobile and AT&T, was similar, with 51% voting for basic devices and 12% for QMDs. On Verizon, the smartphone tally was lowest at 33%, while featurephones scored 55% and QMDs 12%. The survey did not take into account network switches.
• The main reason to avoid a smartphone was the cost of the phone and/or service plan. The second was a belief that a smartphone would not offer any features they needed, over and above those of their dumb device (many of which have simple browsers, MP3 players, cameras, GPS and even touchscreens). Others felt they would not have the technical smarts to use a smartphone with all its apps.
• Among first-time smartphone buyers, Android is the first choice. The survey found that 49% of current Android owners traded up from a featurephone, and 13% switched from a BlackBerry. Android has a lower second-device rating than its rivals - 11% of Android owners are onto their second phone with the Google OS, compared to 26% of iPhone customers and 32% for BlackBerry, but of course Android phones have only been in the market for two years.

Carriers and apps providers are supporting the featurephone's resilience with moves like extending Facebook and Skype to basic handsets.