Report: Pricing, Not Multimedia, Drives Wireless Uptake

New research from analysts at RBC Capital Markets contends that subscription pricing, versus sexy new features like wireless video and music, remains the greatest driver behind end user adoption of mobile services.

While cool new applications such as mobile video and music on the handheld are drawing much of the attention from those people following maturation of the wireless communications market, new research contends that subscription pricing remains the biggest factor linked to industry growth.

According to a report released by financial analysts at RBC Capital Markets, the evolution of mobile devices from providing mere voice communications into handhelds that allow for advanced multimedia and business applications is well under way, but common issues such as subscription pricing and confusion over a glut of available products and services stand as some of the larger obstacles blocking wider adoption of wireless technologies.

RBC Markets said that roughly 200 million U.S. residents currently subscribe to wireless plans, representing roughly 70 percent market penetration, with 2005 standing as a record year of growth for sales of both pre-paid and subscription-based services.

In a survey of roughly 1,000 U.S. wireless subscribers conducted by RBC during the third week of February 2006, the company said it found that most people remain more concerned about paying less for their minutes than playing with the latest gadgets or services.

According to the study, those people polled by RBC indicated that plan pricing remains their top determining factor in selecting a wireless plan, followed closely by device compatibility.

Device-oriented concerns also ranked among respondents top issues when choosing their respective devices and providers, as some 45 percent of those polled said that having too many product choices prevented them from actually deciding on a plan.

User education also factored into the device selection process, with 42 percent of Americans boasting a high school education or less found to be "significantly more hesitant" to buy new technologies because of their complexity, compared to 33 percent of their peers with post-secondary education.

The rapid evolution of technology was highlighted by users as another reason for avoiding investments in new handset and services, with 56 percent of respondents citing that trend as an inhibitor to making a purchase.

Some 48 percent of those surveyed admitted that they were worried that the devices and services theyve most recently purchased will rapidly become obsolete.

Contrary to some experts beliefs that new multimedia services represent an emerging source of potential for new market growth, an overwhelming 76 percent of respondents to the survey said they were not interested in watching TV programs or movies on their handhelds, while 69 percent said they do not expect to begin using their mobile phones for listening to music services.

Another group of people bound to be discouraged by the RBC reports findings are those predicting a new wireless economy based on plans to send advertisements to end users handhelds.

Some 58 percent of respondents identified mobile marketing as a nuisance that should be prohibited, with 52 percent indicating that they do not want ads in text messages or downloaded content, even if it lowered service or subscription costs.

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As if there were need for more proof that end users abhor ads, RBC found that 43 percent of those people it interviewed were willing to actually pay more money for a device that prohibits any form of marketing.

Security also remains a top concern for wireless services users, with 46 percent of those surveyed by RBC indicating that protection of their personal account information was their biggest worry about using mobile devices.

Some 36 percent of respondents highlight their concern that someone might be spying on their wireless usage.

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