American consumers show less enthusiasm for purchasing entertainment services created for their wireless mobile devices than for spending on the target electronics gadgets and devices. In an IDC survey of more than 2,500 American wireless subscribers and customers, nearly three-quarters (72.5%) of respondents did not use any data services outside of messaging in the third quarter of 2006. Even worse, 47 percent of respondents in the key 18 to 24 year-old demographic described mobile data services as "too expensive".

Steep prices are one of the main reasons Americans are not jumping to subscribe to entertainment services for their wireless mobile devices, such as the Xbox, Apple's iPod, personal computers, and high definition TVs.

IDC said that when its survey data was broken down by device type and average revenue per user, this complaint of overpriced data services resonated with respondents who use camera phones and/or spend more than $60 a month for mobile service.

"The fact that four out of ten survey respondents feel they are overpaying for data services does not bode well for the future of this market," says Lewis Ward, research manager for IDC's Mobile Consumer Services: Entertainment program. "The survey also revealed a small group of U.S. consumers that believes data services are a bad idea, or worse, degrades the calling experience. Education may help this issue, but it's clear from the survey results that many people just want to use their mobile phone to make calls."

SMS rules

In contrast to entertainment services, mobile messaging services, especially short message service (SMS), are much more popular among the consumers surveyed by IDC. In fact, close to half (47%) of survey respondents indicate that they sent or received at least one SMS message in 3Q06. According to IDC, SMS subscription plans have already surpassed the 50% mark, and American consumers spend an average of $3.70 per month for data services. IDC analysts also found that respondents reported a remarkably high average number of text alerts as part of their total message volume. Alerts were defined as SMS/text-based news or information services that respondents subscribed to for their mobile device. Survey respondents indicated that about a quarter of all SMS messages in 3Q06 were alerts, showing the popularity of such services.

Music and more

About one fifth of consumers purchased at least one ringtone in the quarter, and about one in ten bought a graphic/wallpaper or a game. Youths and those with advanced devices exhibited pronounced adoption rates of most forms of wireless entertainment, including full-track music and video/TV services.

About the market research study

The IDC 100-page study, "U.S. Wireless Teen and Adult Consumer Entertainment Survey, 3Q06: Age, Device Type, and ARPU Segmentation" (IDC #204303; November 2006) by Lewis Ward, contains analysis of a survey of 2,506 U.S. teenagers and adult consumer wireless subscribers and customers (mean age: 36.2) fielded in August 2006. It explores relative adoption, spending, and usage levels among common types of messaging (SMS, MMS, IM, consumer email), content (ringtones, graphics/wallpapers, games, and simple applications) and other emerging services types such TV/video, Web/WAP usage, full-track music and streaming radio, ringback tones, and more. The data herein is further segmented by age group, device type, and ARPU range. Detailed analysis is associated with each of the 39 tables, and recommendations based on the results are included.

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