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Wireless Ad Frequency Plummets From Q1-Q3 Last Year

The frequency of wireless phone advertising fell sharply in the first three quarters of this year compared to the year-ago period following years of rapidly accelerating ad-frequency gains, according to Beyen International Market Research.

The downturn in cellular advertising parallels the sharp first-half decline in the number of net new cellular subscribers.

Average advertised phone prices remained relatively stable during the first three quarters of this year compared to the year-ago period, Beyen also found, because major gains in the average GSM phone price offset a significant decline in advertised CDMA phone prices. For the first time, the average price of a GSM phone exceeded the average price of a CDMA phone during the Q1-Q3 period, Beyen said. iDEN phones remained the highest price technology advertised.

Beyen, which tracks the advertising of individual phone models in more than 90 newspapers and magazines, also found that, during the first three quarters:

Nokia maintained its leading share of wireless-phone advertising, but Motorola’s share increased significantly, putting the U.S. brand’s ad frequency within three percentage points of Nokia’s.

Samsung lost advertising share but remained the third-most-advertised phone brand.

Kyocera and LG gained ad share, while Ericsson (including Sony Ericsson) and Audiovox lost ad share.

Here are the details on Beyen’s findings:

Ad frequency: The number of phones advertised during the first three quarters declined 6.5 percent to 101,077 following years of double-digit growth (see table, p. 48). Nonetheless, full-year frequency could still gain, thanks to the launch of the Virgin Mobile carrier brand and to newly energized carrier campaigns to promote new data services.

In contrast, during the first three quarters of 2001, the number of phones advertised grew 27.5 percent, following a 23 percent growth rate in the first three quarters of 2000 and an 18 percent gain in 1999.

Brand share: During the three-quarter period, Beyen found that most of the top 10 advertised brands were advertised less frequently than they were during the previous year. The exceptions were Motorola, Kyocera, LG, Sanyo, and Panasonic, all of which increased their ad frequency and percentage ad share despite the downturn in wireless-phone advertising.

Motorola’s gain probably results in part from growing new product introductions, while the combined decline of Ericsson and Sony Ericsson is attributable to the lag time involved in introducing new products following the merger of the Ericsson and Sony wireless-phone operations.

The number of times that a Motorola phone was advertised rose 23 percent to 29,579 ads, to increase ad share to 29.3 percent of all advertised phones from 22.2 percent. Despite the gains, Motorola’s ad-share rank stood unchanged at number two, but the company nonetheless put more distance between itself and the third- ranked supplier and came close to unseating top-ranked Nokia.

Nokia’s ad frequency declined to 32,560 ad mentions from 35,202, but the brand’s share remained almost unchanged at 32.2 percent, enabling the company to keep its first-place ad-share rank.

Samsung held onto its third-place ad-share rank even though its advertising frequency fell by 45 percent to 8,703 mentions and its share dipped to 8.6 percent from 14.7 percent.

Phone prices: iDEN-technology phones remained the most expensive in consumer ads, but GSM phones replaced CDMA phones as the next-highest priced technology in ads, Beyen found (see table 2).

The average price of an advertised CDMA phone fell significantly during the period, while the average GSM-phone price increased significantly, Beyen found. The average advertised price of a GSM phone in 2002, for example, was up 27 percent to $115.20, 25 percent to $117.74, and 20 percent to $89.64 in the first, second and third quarters, respectively. That change is likely due in part to T Mobile’s aggressive campaign to sell step-up phones, which at least one supplier said contributes to greater air-time use.

Prices of 1,900MHz CDMA phones fell during the three quarters by 6.5 percent, 27 percent, and 52 percent, respectively, to $94.68, $89.90, and $56.39.

The average advertised price of dual- and trimode CDMA phones rose in the first quarter by 19 percent, to $101.70, but fell in the following two quarters by 25 percent and 23 percent, respectively, to $77.45 and $106.32.

Overall, advertised prices of phones slipped slightly in the second and third quarters following a bump up in the first quarter, when the average price rose to $101.31 from $99.47. The second-quarter average fell to $86.60 from $87.13, and the third-quarter average fell to $90.37 from $93.83.

Average prices were also relatively stable in the first three quarters of 200 and 2001, Beyen said.

Wireless Phone Advertising By Brand