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Average Cell Phone Price Rises

Tue Jun 3, 2008 - 10:49 AM EDT - By Jay Gross

People are paying $9 more for a mobile phone, on average, than reported in 2007, according to volume 1 of the J.D. Power and Associates 2008 U.S. Wireless Mobile Phone Evaluation Study, which was released May 29.

The increase is the first in two years, bringing the average purchase price cited by customers to $101, the highest average price paid for a wireless device since the study�s inception in 2003. JD Power, a consulting firm, attributed the change to the recent surge in popularity of smartphones, "such as the RIM Blackberry, Palm Treo and recently introduced Apple iPhone, as well as music-enabled handsets." The average reported price paid for a smartphone is $208, compared to $58 for phones with fewer features.

Kirk Parsons, senior director of wireless services at J.D. Power, said, "Sales of smartphone devices have increased considerably over the past year to 6.3 percent from 1.7 percent in overall market share at the beginning of 2007."

Quoting the press release: Although 2008 marks the first time since the inception of the study that customers report a decline in the receipt of free handsets, this is not unexpected, given the increase in the popularity of smartphones, which have a much higher price point and tend to be discounted less frequently by wireless carriers.

The study also reported:

  • The average reported length of cell phone ownership is 17.7 months�an increase from 16.6 months in 2006.
  • The most frequently reported reasons customers select their current cell phone include: pleasing design style (41%); received for free (25%); easy to use (23%); discounted/reduced price (21%); digital camera features (18%); variety of features offered and small size (17%).

The study is based on experiences reported by 18,093 wireless users who have owned their current mobile phone for less than two years. Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services firm and a business unit of The McGraw-Hill Companies.

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