Surge in UK Customers Buying Directly from Phone-Makers

The way people buy their mobile phones in the UK is changing quickly, as revealed in CCS Insight’s latest survey of UK consumers, published today and available to clients here.

In an important market shift, more than a fifth of people now buy their primary personal phone directly from Apple or Samsung, compared with just one in 20 in our 2018 survey.

In fact, Apple’s retail store or website was the second-top channel in the research, accounting for 14% of purchases, up from only 3% six years ago. Among iPhone owners, it’s the preferred destination, at 31%, ahead of mobile service providers, at 26%.

Several factors are driving the trend to buy directly from phone-makers: the dominance of Apple and Samsung in the UK, which together represent eight in 10 mobile phones in use; growing use of online channels, which make up more than half of all phone sales; and rising interest in trade-in and refurbishment schemes.

The trend raises alarm bells for telecom operators, which used to dominate device sales with their bundled phone and airtime deals. Now this channel represents only about a quarter of the market. If Apple and Samsung start to keenly push direct phone sales with airtime packages, they could become more influential, making it harder for mobile operators, which would find far fewer opportunities to engage with customers and upsell new services.

Another important finding is the growing dominance of SIM-only plans. As replacement cycles for mobile phones lengthen and airtime prices stay low, more than four in 10 people now take a SIM-only deal, ahead of bundled airtime and device contracts, chosen by 30%, and pay-as-you-go, selected by 28% of respondents. The survey suggests further growth, with a huge 80% of people currently on a SIM-only deal expecting to stay on this type of plan in two years’ time.

With AI a red-hot topic, our survey probed into people’s views on the technology for the first time. The findings reveal strong interest in some AI-infused smartphone features, notably photo editing. And encouragingly for the connected devices market, more than four in 10 people say they’re willing to pay more to access these capabilities.

The research suggests the jury remains out on foldable phones, however. About half of respondents said owning one would be appealing, and 40% would consider buying one, but many still feel that they don’t need one, don’t like the design or are put off by the price.

Loyalty to phone brands appears set to strengthen. Seven in 10 people (70%) told us they’d keep the same brand of phone next time, up slightly on recent surveys. Loyalty is highest among Apple (81%) and Samsung (76%) customers, but plummets among owners of other brands (37%). We again noticed more people switching from Samsung to Apple than the other way around, although this trend appears to be slowing.

The survey also uncovered pent-up demand for unlimited data tariffs, a new area of focus this year. Nearly two-thirds (64%) would consider an all-you-can-eat option next time they change or upgrade their plan, including 80% of people aged between 18 and 34. This supports CCS Insight’s latest market forecast, which projects average data usage per customer per month hitting 20 GB in 2029.

Satellite connectivity is another hot topic in the industry and the subject of a recent CCS Insight Spotlight report. Encouragingly for the sector, more than four in 10 people said they would pay to send messages in areas with no mobile coverage. This figure rises to more than 70% among those aged under 35.

When exploring people’s views of the Vodafone–Three merger, the survey found that awareness of the ground-breaking deal — cleared by regulators last month — is already at 40%. And encouragingly for the joining parties, four times as many people think it’s a good thing as those who think it’s bad news.

The survey focused on many other areas, including willingness to take used and refurbished devices, different ways to interact with telecom providers, views on annual price rises, use of trade-in and part-exchange schemes, interest in accessory items, mobile phone insurance, home broadband and future purchasing intentions. Contact us if you’d like to know more.