Nokia out of touch with the youth market, says GfK

By Matthew Henry

SYDNEY: Nokia may be losing its cool, according to research company GfK which claims the brand is ‘out of touch’ with younger consumers, who are turning to brands like Motorola as mobile phones become a fashion statement.

An internet-based study of 1026 mobile users conducted by GfK Australia in July found that while Nokia continues to dominate the overall Australian market with 43 per cent market share, it has lost ground in the under 25 segment, where the brand has just 31 per cent share.

Motorola is now nipping at the Danish company’s heels with 27 per cent share in the under 25s market – an important segment for manufacturers given that young mobile users replace their phones much more frequently.

“Younger people are all about phone fashion and our research shows that Motorola clearly does this best,” said GfK Australia research project manager, David Griffin.

“According to our data, Motorola was the only brand where the most popular reason for purchase was design and appearance rather than price, features or functionality.”

The survey found that 50 per cent of 15-17 year olds replaced their mobile phone within the past 12 months, compared to 21 per cent in the 35-44 years category and just 15 per cent for over 55s.

Of those surveyed, 55 per cent of had changed either their mobile phone handset or network provider in the past 12 months, with 88 per cent updating their handset and 27 per cent changing to a different mobile network.

And while older users are more likely to place a high priority on price, features and functionality, younger consumers were more interested in design.

“The drivers for change were also different across the age groups. While a majority of people chose to upgrade because their previous handset was out of date or unfashionable, the under 25s was the only group which cited the design and appearance of their handset as the most important factor when choosing their new handset,” he said.

Griffin said that in a market where price and features are becoming more uniform across most brand’s offerings, design and appearance are becoming one of the few differentiating features.

“Many analysts attribute Nokia’s late adoption of the popular clamshell form as the reason for its loss in sales, and our research has confirmed the importance of handset appearance,” he said.

However, Nokia maintains a strong allegiance with older consumers, particularly in the 45-54 age bracket where the brand commands 53 per cent market share compared to Motorola’s 18 per cent.

Griffin attributed this to Nokia’s reputation for reliability, but suggested that this could change as today’s younger, fashion-conscious consumers grow older and are influenced by other factors.

“This new study is a wakeup call to all mobile phones manufacturers that they cannot afford to ignore design and fashion issues when targeting new phone buyers,” said Griffin.

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