Tough Economy Not Hurting Smartphone Sales

Mobile phone users are increasingly happier with devices and willing to pay more for feature-rich handsets and data services, according to a new report by J.D. Power and Associates.

Sony Ericsson’s handsets rank tops with wireless phone users when it comes to design, operation, features, durability and battery function. The handset maker scored 739 on the study’s 1,000-point scale, and took first place for the third consecutive time in the bi-annual study.

A study from J.D. Power last week found Apple’s iPhone topped business users in overall satisfaction. This survey was focused on general consumers and not business users.

Mobile device users are paying more for handsets and services this year, said the report, and that is likely the reason for a more satisfying device experiences. The average purchase price is $107, $15 more than last year.

The news comes as handset makers and wireless carriers battle a depressed economy and increased market competition in a heated race to keep current subscribers while also working to lure new ones into data and services contracts.

The biggest influence factor related to improved satisfaction and increasing spend is the growing popularity of smartphones, such as the iPhone and Research in Motion’s BlackBerry devices, according to the research firm.

“Smartphones were once in a sleepy place within the business sector. Then the iPhone came and opened up the possibilities of what consumers could accomplish with mobile handsets,” Kirk Parsons, senior director of wireless services at J.D. Power, told

Smartphones provide enhanced capabilities such as fast Web surfing, music, various messaging options and access to specialized services such as video streaming, radio programs and even live television.

” It’s not just voice people want to use mobile phones for and they’re willing to pay more for features beyond that,” said Parsons.

LG came in second behind Sony Ericsson, attaining a 733 score and Samsung ranked third, with 724 points, in the 2008 U.S. Wireless Mobile Phone Evaluation Study, Vol. 2, released yesterday.

Increasing demand for advanced features means users are spending more money on data plans and services — about $80 a month, according to the study. Just a year ago the average spend was $72, according to the research firm.

The study, which polled 16,717 wireless users, reports that nearly one half, 49 percent, are likely to buy a new device in the coming year. That’s a jump of four percentage points from those polled six months ago.

When it comes to device services, 30 percent of today’s mobile users want GPS software and 25 percent want a touch screen on their next device.

When it comes to buying a new device, style and design rank as most important, with 43 percent polled listing it as the top choice aspect.

Yet a majority of mobile users are looking for device discounts and free handsets, with 25 percent stating they chose their current handset as it came free with a data plan. The study noted that 23 percent are also interested in device discounts in device selection.

Digital cameras ranked fourth as a purchase criteria, with 20 percent noting it as a top purchase aspect. A device’s feature set came in fifth with 19 percent of users.

The data, according to the research firm, indicates that mobile devices and services aren’t losing their attraction even in a tough economy. “The mobile phone is now a commodity. It’s what you take when you grab your keys and wallet,” said Parsons.

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