Category: Gadgets

People are hooked on smartphones and a new report has shown that those monthly bills are adding up.

A recent report issued by Boston Consulting Group has shown that consumers love their mobile technology and those from developed countries (the United States, Germany, and South Korea) are currently paying an average of about $6,000 per year on them.

This represents the equivalent to 12 percent of the average annual income and includes devices and services.

The sales and use of mobile technology, specifically cell phones and smartphones, generated almost $3.3 trillion in global revenues, last year, said a Qualcomm commission report entitled “The Mobile Revolution: How Mobile Technologies Drive a Trillion-Dollar Impact” report. It also stated that the aggregate annual consumer surplus – that is, the benefit above and beyond what is paid directly for mobile services – is considerably higher, at a total of about $6.4 trillion.

Most of the people who were surveyed said they would rather give up dining out for a year than their mobile technology.

They also said that they would give up going on vacation for a year in order to be able to hang on to their mobile devices. The research included the participation of 7,500 consumers in the United States, Germany, Brazil, India, China, and South Korea.

In Korea and China, the majority of smartphone users said that they would prefer to give up their home broadband internet connection than go without their devices.

According to senior partner at The Boston Consulting Group, David Michael, who was also the report’s lead author, “The typical U.S. consumer reports that their mobile phone connection creates more than $5,800 in value for them per year, over and above what they pay. That surprised us.”

Michael also pointed out that it was interesting to observe the value that consumers applied to mobile services within emerging markets. Among Indian and Chinese consumers, over 60 percent claimed that their mobile device services gave them access to new opportunities in generating income.

The report indicated that from 2009 through 2013, the mobile technologies industry made capital expenditures and research and development investments of $18 trillion.

A recent report has shown that 70 percent of consumers pay more than necessary for talk, text, and data.

Research by European firm, Consumer Champion, has indicated that between two thirds and three quarters (70 percent) of consumers in the United Kingdom are paying more than necessary for mobile technology services such as calling, text, and data plans.

It pointed out that many are paying for more services than they require and are locked into 24-month contracts.

Others, particularly children, have mobile technology service plans that are two low for their usage. This means that parents run the risk of regularly running up additional charges when they have exceeded their plan limits. The results of the study showed that an estimated 77 percent of consumers in the U.K. could be saving a minimum of £50 (around US$75) per year by changing their contracts. However, it also underscored the fact that there are some service providers that make it very challenging to switch, as they apply a charge to unlock handsets.

The result is that families across the country are paying billions of pounds too much for their mobile technology service.

The average savings, according to Consumer Champion, for seven out of every ten people, could be an average of about £159 (around US$240) each, simply by choosing a contract that better reflects their actual needs. For families that are paying for mobile service on four smartphones, that could bring about an annual savings of over £600 (about US$900), which is certainly nothing to laugh at.

Among the causes for the selection of the wrong plan by consumers is that the majority of smartphones – for example the Samsung Galaxy and Apple iPhone models – are sold along with 2-year contracts that require users to pay a monthly fee in order to cover their service and the cost of the handset, but that have a limit to the number of calls, text, and data usage that are included.

As many mobile technology users are on plans that will charge them more when they exceed the capped amount of calls, text, and data – particularly in the case of children – additional fees are run up that make the service far more costly than it would have been if they had upgraded their plans to something that covers a larger amount of service.