Cellular Brand Preference/Loyalty: Does it matter?

By Allan Pulga

When you go to renew your cellphone service, would you rather stick to an existing handset brand or go with a new “house brand” offered by your service provider? A slight majority of U.S. cellphone users don’t really care one way or another.

A recent survey by Harris Interactive shows that 54 per cent of U.S. adult cellphone users have no preference between new or existing handset brands, while the rest differ in interest between a new brand (27 per cent) and an existing brand (19 per cent).

About two thirds (64 per cent) of respondents agree that more competition among handset manufacturers will lead to product innovation and 40 per cent believe it will ensure more choices in the marketplace. Forty-eight per cent of respondents said having cellphones and service from the same company could increase compatibility; 32 percent think it could lead to lower plan costs.

Some cellphone users, however, are skeptical of service provider-branded phones. Twenty-nine per cent think this could result in reduced competition and higher prices while 21 per cent believe service providers lack the design skills to build quality handsets.

Meanwhile, another recent survey – conducted by Forrester Research – found that consumers have more faith in their handset manufacturers than in the big cellphone operators they subscribe to.

The survey asked 4,700 U.S. cellphone users how much they trust major cellphone service and handset brands on a 5-point scale, with 1 being the lowest (“distrusts a lot”) and 5 the highest (“trusts a lot”).

Handset makers like Palm and Motorola scored the highest, with 4.3 and 4.2 respectively. LG and Samsung received lesser scores of 4.0 apiece.

On the other hand, three service providers Verizon, Cingular and T-Mobile scored an even 4.0 with Sprint close behind at 3.9.

The handset-makers’ edge seems marginal, but the survey’s author, Charles Golvin, says consumers are being too hard on their cellular service providers and giving too much credit to handset manufacturers. “In some ways, handset makers get a free pass,” he said, to Leslie Cauley of USA Today.

He explained that many consumers don’t realize that it isn’t their Motorola Razr doing the “heavy grunt work” – it’s the carriers. “When you look at the complexity of what carriers have to do, and how often they actually succeed, they do a remarkable job.”