Unlocked-Phone Owners ‘Less Loyal’ to Carriers, Brands Than Users Overall, NPD Finds

The estimated 30 million U.S. consumers who own unlocked mobile phones are “less loyal” to wireless carriers and device brands than American mobile phone owners as a whole, an NPD survey found. NPD estimates unlocked handsets make up about 12.5 percent of the U.S. mobile phone market, it said in a Tuesday report. NPD canvassed more than 1,000 adult owners of unlocked phones, in addition to 4,100 adult consumers it surveyed as part of a broadband adoption study, it said. It found that 30 percent of unlocked phone users switched carriers when buying a new device, versus 24 percent of locked phone users, it said: “In fact, the number one motivator for purchasing an unlocked phone was freedom to choose a future network.” Unlocked users also were also more likely than those with locked devices (45 versus 34 percent) to cite lower costs as a reason for switching carriers, it said. Unlocked users also were more likely than locked-phone users (48 versus 37 percent) to switch device brands when upgrading, it said. Forty-eight percent of unlocked phone users switched brands when upgrading devices, compared with 37 percent of locked phone users. Among unlocked users brand loyalty increases with price paid. Online and physical retailers are responding to the increasing popularity of unlocked phones by widening their product selection, NPD said. “As the unlocked phone market grows, differentiation will be key” for OEMs, it said. Though price is the main “competitive component” of unlocked phones, “devices will need compelling features/functionality to appeal to consumers and retailers alike,” it said.