The growing market of consumers who are buying unlocked phones (which are not bound to a specific wireless carrier) are less brand loyal — both to provider and device — than other consumers.
According to The NPD Group’s “Unlocked Phone Demand Report,” 30% of unlocked phone users switched carriers when they purchased a new device, compared with 24% of those who purchased locked phones. Indeed the top motivator for purchasing such a phone was to have more freedom when choosing a carrier.
“One of the main motivators for unlocked phone purchase is freedom of choice,” says Brad Akyuz, director and industry analyst for NPD’s Connected Intelligence. “They kind of have a ‘free-spirit’ mindset.”
In addition, unlocked phone consumers tend to be less brand loyal when it comes to the devices. Forty-eight percent of unlocked phone users switched brands when upgrading devices, compared with 37% of locked phone users. The reason for this drop in brand loyalty directly correlates with price, Akyuz says.
“Most of the [unlocked] Android phones are in the sub-$200 range, where we don’t see big brand loyalty,” he tells Marketing Daily. “These users are primarily looking for value over anything else.”
Both carriers and manufacturers can take advantage of this diminished brand loyalty among unlocked phone consumers, Akyuz says. With little device loyalty among lower-end phones, manufacturers have a “huge opportunity” to make a name for themselves. Carriers, meanwhile, can see some reduced costs.
“For carriers, the benefit is they don’t have [added] financial costs,” he says. “Even in these unsubsidized times, carriers are offering huge incentives [to facilitate purchases].”
The downside, however, is that — even unlocked — not all devices will work on all networks, and if there are issues, the carriers are likely to feel the blowback, Akyuz says. “The carriers spend billions of dollars to build a network image, and they don’t want to damage that,” he says.