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Tuesday, June 03, 2008
J.D. Power and Associates Reports: Rising Popularity of Smartphone Devices Drives Higher Wireless Mobile Phone Prices


The average reported purchase price for wireless mobile phones is now $9 higher than reported in 2007, according to the J.D. Power and Associates 2008 U.S. Wireless Mobile Phone Evaluation Study(SM)-Volume 1 released today.

The study finds that the average reported purchase price for a wireless handset has increased substantially for the first time in two years. The average purchase price cited by customers for a mobile phone is $101 -- up $9 from just six months ago -- and marks the highest average price paid for a wireless device since the study's inception in 2003.

The increase in the average purchase price can be partially attributed to the recent surge in popularity of smartphone devices, such as the RIM Blackberry, Palm Treo and recently introduced Apple iPhone, as well as music- enabled handsets, both of which typically have higher price points when first offered. The current average reported purchase price for smartphone devices is $208 , much higher than the average price paid ($58) for phones with fewer features.

"As more customers start to upgrade to mobile phones that offer real-time connectivity and access to Internet content -- particularly those offered by smartphone devices -- we should continue to see the wireless handset price point rise," said Kirk Parsons , senior director of wireless services at J.D. Power and Associates. "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."

The study also finds that another influence on the rise of the average mobile phone purchase price is a sudden decrease in the number of wireless customers who say they receive their current phone for free. The percentage of customers who say they received a free handset has decreased from 36 percent to 33 percent during the past six months.


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