Operator subsidy model sells more smartphones in the UK

SMARTPHONES MADE UP 67 per cent of UK phone sales during the last 12 weeks as consumers were enticed by the offer of a free smartphone on a monthly contract, according to data from industry analysts at Kantar Worldpanel Comtech.

According to the firm, the subsidy model - where consumers are given a free smartphone if they take a longer and more expensive contract - appeals to consumers, despite the fact that it will eventually cost them more.

The firm's global consumer insight director, Dominic Sunnebo said, "The two countries which sell the most smartphones (GB and Australia) are also the same two where the highest proportion of smartphones are given free to consumers signing up to contract tariffs (61 [per cent] free in Great Britain, 44 [per cent] free in Australia)."

He explained, "Consumers find it very compelling to be offered a free smartphone with little to no increase in tariff. This is a very different story in countries like Italy, where the vast majority of the market is prepay, meaning that handset subsidies, if they exist at all, are minimal."

Meanwhile, according to the data, Android held an average market share of 50.6 per cent across the UK, US, Spain, Germany, France, Italy and Australia.

Although Windows Phone 7 has gone down like a lead balloon in the UK, it now holds 7.1 per cent market share in Germany, having sold over 300,000 handsets since launch.

This contrasts to last week when we reported that the calculators were humming at Canalys with the news that Microsoft's Windows Phone 7 (WP7) had roared to a one per cent share of the smartphone market.

In Germany, HTC's Mozart handset is apparently driving these market share gains. This news will be comforting to Nokia, which must be tearing its hair out over the decision to ally with Microsoft to launch a Windows-based handset towards the end of the year.

Kantar Worldpanel Comtech says that Windows Phone 7 market share remains in the "low single digits" elsewhere, but is slowly edging towards selling a million handsets in the US.

In the UK, Android continues to lead the smartphone market with 48.8 per cent share, while IOS and RIM have 20.2 per cent and 19.2 per cent market shares, respectively. µ