Mobile devices in the U.S. have traditionally been tethered to one particular service provider.But that’s beginning to change, and rapidly, according to new market research from NPD Connected Intelligence.
U.S. unlocked mobile phone penetration is now about 12% of the market or about 28 million U.S. consumers, NPD said. The percentage is rising fast as telecom providers are no longer subsidizing the purchase cost. Furthermore, retailers are behind the curve.
According to NPD, half of all unlocked mobile phones are being purchased online. The reason: they’re not available in stores. In contrast, 74 percent of locked phones are bought in stores or kiosks.
“Since consumers now have to pay full price for their mobile phone, the unlocked market is a cost-effective alternative and helps to address the mid-tier pricing market for consumers that are looking for a relatively high-end smartphone, but at a lower price point than the typical $600 plus price tag,” said Eddie Hold, NPD Connected Intelligence president.
Unlocked Mobile Phone Penetration Means New Opportunities
The growing market also presents an opportunity for new OEMs to enter and penetrate the market without having to obtain the backing of a wireless network carrier, NPD points out.
NPD Connected Intelligence breaks the unlocked mobile phone market into two categories of users: the frugal and the technophilic. The former tend to prefer prepaid smartphone plans while the latter are looking for an alternative to standard choices.
“While costs are a major factor driving consumers to make the switch to an unlocked device, these consumers still expect their devices to deliver dependable service,” Hold commented.
“That’s why it’s becoming increasingly important for carriers to educate consumers on possible band/frequency issues when using unlocked devices; otherwise, consumers are likely to blame carrier networks for signal losses that are in reality device driven.”