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Wireless & Mobile Landscape

U.S. Mobile Device Distribution Channels: Where and how consumers are buying mobile phones… and why

U.S. mobile consumers have a wide range of options when deciding where to purchase a mobile phone or smartphone. They can purchase it directly from their mobile service provider or the phone manufacturer, but many other options are also available, including electronics stores, such as Best Buy or Radio Shack, discount stores, such as Target, Walmart or even Costco, and online-only retailers, such as Amazon, eBay, or Newegg. And within each of these types of retailers, consumers usually have the choice to either purchase online or go to a physical store.

In addition to the many choices in where to purchase, consumers also have choices in how they purchase their mobile phone. For example, mobile consumers can buy a phone at full price and pay for it up front, buy a subsidized phone with a two-year contract, or purchase with an installment plan that allows for frequent upgrades.

This market study discusses where and how U.S. mobile consumers purchase their traditional mobile phones and smartphones. In this report, these are collectively referred to as ‘mobile phones’. The study also looks at the rising popularity of device installment plans from both mobile operators and device manufacturers (specifically, Apple) and consumers’ awareness of and interest in the plans. The data in the study is based on a web-based survey of more than 1,000 U.S. mobile consumers that iGR fielded in November, 2015.


Key Questions Answered

  • How often do U.S. mobile consumers visit their mobile service providers’ retail stores and why?
  • From what type of retailer did U.S. mobile consumers purchase their latest mobile phone?
  • Did U.S. mobile consumers purchase their latest phone online or in a physical store?
  • Where do U.S. mobile consumers plan to purchase their next mobile phone and why?
  • What type of purchase method did U.S. mobile consumers use when they purchased their last phone – a subsidized phone plan with a contract, an installment plan, or some other method?
  • What type of purchase method do U.S. mobile consumers plan to use when they purchase their next phone and why?
  • What are U.S. mobile consumers’ awareness of and interest in their mobile service providers’ installment plans? How has this awareness and interest changed over the last two years?
  • What percentage of U.S. mobile consumers have purchased their devices with mobile service provider installment plans? How does this number compare to one year ago?
  • What are U.S. mobile consumers’ awareness of and interest in Apple’s iPhone Upgrade Program?
  • What percentage of U.S. mobile consumers have purchased their devices with Apple’s iPhone Upgrade Program?
  • Would more U.S. mobile consumers prefer to purchase their next iPhone with Apple’s iPhone Upgrade Program or with their provider’s installment plan?
  • How do the location and method of U.S. mobile consumers’ mobile device purchases vary according to their mobile service provider?
  • How do the location and method of U.S. mobile consumers’ mobile device purchases vary according to demographic variables?

Who Should Read

  • Mobile network operators
  • Mobile service retailers and distributors
  • Mobile device OEMs
  • Financial and investment analysts.

Table of Contents

  • Abstract
  • Executive Summary
    • Purchase Locations
    • Purchase Methods and Installment Plans
    • Interest in Service Provider Installment Plans
      • Historical Comparison of Interest – iGR Surveys
      • Interest in Service Provider Installment Plans by Provider
    • Impact of Apple iPhone Upgrade Program
    • Preference – Apple or Service Provider
  • Methodology
  • Mobile Operator Retail Stores
  • Locations of Mobile Device Purchase
    • Past Purchases
    • Planned Purchases
    • Comparison of Past and Planned Purchases
      • Possible Shift to Online
  • Available Phone Purchase Methods
    • Subsidized Phones with Two-Year Contracts
    • Installment and Upgrade Plans
    • Other Purchase Options
  • Purchase Method for Past Purchases
    • Significant Trend by Time of Purchase
    • Other Trends
  • Purchase Method for Planned Purchases
    • Purchase Method for Planned Purchase
      • Significant Trend by Time of Last Purchase
      • Other Trends
    • Reasons for Purchase Method
    • Reasons According to Purchase Method
      • Reasons to Purchase a Subsidized Phone with a Two-year Contract
      • Reasons to Purchase a Full Price Phone without a Two-year Contract
      • Reasons to Purchase an Unactivated/Unlocked Phone
      • Reasons to Purchase a Phone through their Service Provider’s Installment Plan
  • Service Provider Installment Plans
    • Awareness
      • Significant Trend by Time of Purchase
      • Other Trends
    • Interest
      • Historical Comparison of Interest – iGR Surveys
    • Take Rate
      • Current Survey Results and Trends
      • Historical Comparison - iGR Surveys
      • Historical Comparison – Mobile Operator Quarterly Results
  • Apple iPhone Installment Plans
    • Awareness
      • Significant Trend by Time of Purchase
      • Other Trends
    • Interest
      • Trends
      • Reasons for Interest or Disinterest
    • Preference – Apple or Service Provider
  • Consumer Demographics
    • Demographic Profile of U.S. Consumer Respondents
  • Definitions
    • General
    • Device Types
    • Services
    • Network Technology
  • About iGR
    • Disclaimer

List of Tables

  • Table 1: When Last Visited Provider’s Store
  • Table 2: Reasons for Provider Store Visit
  • Table 3: Where Current Mobile Phone Was Acquired
  • Table 4: Where Current Mobile Phone Was Acquired – Physical Store or Online
  • Table 5: Where Next Mobile Phone is Likely to be Acquired
  • Table 6: Where Next Mobile Phone Is Likely to Be Acquired – Physical Store or Online
  • Table 7: Reasons Next Mobile Phone is Likely to be Purchased from Chosen Source
  • Table 8: Comparison of Latest and Planned Mobile Phone Purchase
  • Table 9: Comparison of Latest and Planned Mobile Phone Purchase – Physical Store or Online
  • Table 10: Method of Purchase of Latest Mobile Phone
  • Table 11: Method of Purchase for Next Mobile Phone
  • Table 12: Reasons for Next Mobile Phone Purchase Plan
  • Table 13: Subsidized Phone Reasons
  • Table 14: Full Price Phone Reasons
  • Table 15: Unactivated/Unlocked Phone Reasons
  • Table 16: Installment Plan Reasons
  • Table 17: Combined - Reasons by Purchase Methods
  • Table 18: Awareness of Installment Plans
  • Table 19: Interest by Service Provider
  • Table 20: Very Interested and Interested in Installment Plans
  • Table 21: Very Interested or Interested in Installment Plans – Historical Comparison
  • Table 22: Take Rate for Installment Plan – Historical Comparison of iGR Surveys
  • Table 23: Take Rate for Installment Plans – Historical Comparison of Operator Results
  • Table 24: Awareness of Apple’s iPhone Upgrade Program
  • Table 25: Interest in Apple’s iPhone Upgrade Program
  • Table 26: Reasons for Interest in Apple’s iPhone Upgrade Program
  • Table 27: Reasons for Disinterest in Apple’s iPhone Upgrade Program
  • Table 28: Preference between Service Provider Installment Plan and Apple Upgrade Program
  • Table 29: Respondent Age
  • Table 30: Respondent Gender
  • Table 31: Respondent Ethnic Background
  • Table 32: Respondent Annual Household Income
  • Table 33: Respondent Level of Education
  • Table 34: Age of Children in Household
  • Table 35: Respondent Region
  • Table 36: Respondent Marital Status

List of Charts and Figures

  • Figure A: Where Current Mobile Phone Was Acquired
  • Figure B: Where Current Mobile Phone Was Acquired – Physical Store or Online
  • Figure C: Method of Purchase of Latest Mobile Phone
  • Figure D: Very Interested or Interested in Installment Plans – Historical Comparison
  • Figure E: Very Interested and Interested in Installment Plans
  • Figure F: Interest in Apple’s iPhone Upgrade Program
  • Figure G: Preference between Service Provider Installment Plan and Apple Upgrade Program
  • Figure 1: When Last Visited Provider’s Store
  • Figure 2: Reasons for Provider Store Visit
  • Figure 3: Where Current Mobile Phone Was Acquired
  • Figure 4: Where Current Mobile Phone Was Acquired – Physical Store or Online
  • Figure 5: Where Next Mobile Phone is Likely to be Acquired
  • Figure 6: Where Next Mobile Phone Is Likely to Be Acquired – Physical Store or Online
  • Figure 7: Reasons Next Mobile Phone is Likely to be Purchased from Chosen Source
  • Figure 8: Comparison of Latest and Planned Mobile Phone Purchase
  • Figure 9: Comparison of Latest and Planned Mobile Phone Purchase – Physical Store or Online
  • Figure 10: Method of Purchase of Latest Mobile Phone
  • Figure 11: Method of Purchase for Next Mobile Phone
  • Figure 12: Reasons for Next Mobile Phone Purchase Plan
  • Figure 13: Subsidized Phone Reasons
  • Figure 14: Full Price Phone Reasons
  • Figure 15: Unactivated/Unlocked Phone Reasons
  • Figure 16: Installment Plan Reasons
  • Figure 17: Combined - Reasons by Purchase Methods
  • Figure 18: Awareness of Installment Plans
  • Figure 19: Interest by Service Provider
  • Figure 20: Very Interested and Interested in Installment Plans
  • Figure 21: Very Interested or Interested in Installment Plans – Historical Comparison
  • Figure 22: Take Rate for Installment Plan – Historical Comparison of iGR Surveys
  • Figure 23: Take Rate for Installment Plans – Historical Comparison of Operator Results
  • Figure 24: Awareness of Apple’s iPhone Upgrade Program
  • Figure 25: Interest in Apple’s iPhone Upgrade Program
  • Figure 26: Reasons for Interest in Apple’s iPhone Upgrade Program
  • Figure 27: Reasons for Disinterest in Apple’s iPhone Upgrade Program
  • Figure 28: Preference between Service Provider Installment Plan and Apple Upgrade Program
  • Figure 29: Respondent Age
  • Figure 30: Respondent Gender
  • Figure 31: Respondent Ethnic Background
  • Figure 32: Respondent Annual Household Income
  • Figure 33: Respondent Level of Education
  • Figure 34: Age of Children in Household
  • Figure 35: Respondent Region
  • Figure 36: Respondent Marital Status

For additional information on the U.S. Mobile Device Distribution Channels: Where and how consumers are buying mobile phones… and why market study, please contact Iain Gillott, at (512) 263-5682 or by email.