Cell Phones Displace Landlines In Record Numbers_ According To

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Cell Phones Displace Landlines In Record Numbers_ According To Powered By Docstoc
					             Cell Phones Displace Landlines In Record Numbers,
             According To Latest Mediamark Research Analysis

       -- Households Without Landlines Are Increasingly Young, Upscale --

CONTACTS: Anne Marie Kelly, V.P. Marketing & Strategic Planning, Mediamark
Research Inc.: 212-884-9204; Steve Ellwanger, Press Counsel Group: 203-656-3775.

       NEW YORK, September 29, 2004--According to a new analysis from Mediamark
Research Inc. (MRI), 8.1% of U.S. households do not have landline telephones, up
sharply from just 4.2% in the spring of 2000.

       Non-landline consumers-those who have chosen to rely solely on cellphones or
no phone at all-are traditionally downscale. But the non-landline consumers of 2004 are
increasingly younger and more upscale, according to MRI. In the spring of 2000, the
median age for the non-landline population was 23% below that of the general adult
population. By the spring of 2004, it was 30% lower.

      Meanwhile, the median household income for the non-landline population rose
from 63% below that of the general population to 49% below. And the college
graduation rate for non-landline consumers has more than quadrupled, to 11.8%.

       "After years of coexistence between cells and landlines, cellphones have recently
begun to contribute to the desertion of landline service," said Andy Arthur, VP of Client
Services at MRI. "Over the past four years, the percentage of households without
landlines has sprung back to levels unseen since the late 1980's. And while non-
landline households traditionally have been characterized by downscale and less-
educated consumers, this is clearly no longer the case."


Cellphone Growth

      When MRI began to measure cellphones in its spring 2001 The Survey of the
American Consumer, which is based on in-home interviews with 26,000 U.S. adults
each year, one or more cells were in 51.6% of U.S. households. However, despite such
widespread use of cellular technology, only 1.4% of households were "cell-only,"
meaning that no landline phone was present.

       Since 2001, cellphones have continued to proliferate: according to the spring
2004 MRI study, 68.9% of households have at least one cellphone, up from 63.8% in
spring 2003. Most households (63.1%) have both a cellphone and a landline, and only
28.6% of households are using landlines exclusively.
       The percentage of cell-only households has risen nearly fourfold in just three
years, from 1.4% in spring 2001 to 5.5% in spring 2004. Cell-only households now
account for 69% of all households without landline phones, compared to 30% in spring
2001.

       Of the 8.1% of U.S. households that do not have landlines, more than 3 in 10
(31%) are truly "phoneless," having neither a cell nor a landline, down from 70% in
spring 2001. Since cell-only households have significantly higher incomes than
phoneless households (median HHI $32,948 v. $16,058), and since cell-only consumers
are younger (median age 28.8 v. 38.7), it's clear that the growth of the cell-only segment
explains the recent tilts in the profile of the non-landline population.




Cell-only Profile

        MRI research shows that young males are often early adopters of new
technologies; and the data indicate that, under the right conditions, they can also be
"early deserters" of old technologies. While males represent 48.0% of the total adult
population, they account for 57.6% of the cell-only population. "If the traditional patterns
hold, these young males may be the leading edge of a larger, more mainstream group
of cell-only consumers," said Arthur.

       A full 7.9% of single-person households are now cell-only, compared to 5.5% of
households in general. More to the point, 16.7% of single-person households in which a
cellphone exists are now cell-only.
      According to the 2004 spring MRI study, in at least 26.3% of U.S. households (up
from 15.3% in spring 2001), the number of cell phones is equal to or greater than the
number of household members (the percentage is likely higher, but MRI currently caps
the maximum number of cellphones in its survey at "3 or more"). Such households
account for 56.6% of cell-only households; they are more than twice as likely as
households in general to be cell-only. While 88% of them still have landline phones, that
percentage is down 3.1% from a year ago.


Future Growth

        MRI data show that the percentage of households with cellphones is still rising,
as is the percentage of households with multiple cellphones. Young, tech-savvy
consumers-particularly those who live in single-person households-are abandoning
fixed, landline phones in favor of a new cell-only lifestyle.

       All indicators point to continued increases in the cell-only population. Whether or
not the current advantages of landline phone service, such as clarity, reliability, and
data use (fax machines, DSL and dial-up Internet) will be addressed adequately by
advancements in cellphone technology will be crucial for establishing a ceiling to the
trend.


                                         ********
About MRI
              Founded in 1979, MRI interviews 26,000 U.S. adults in their homes each
year, asking about their use of media, their consumption of products and their lifestyles and
attitudes.
       MRI is the country's leading provider of magazine audience and multimedia research
data. The company releases data from The Survey of the American Consumer (adults 18+)
twice yearly, in the spring and fall. MRI data have become the basic media-planning
currency for the majority of the media plans that are created each year by national
advertisers and their agencies. The company's 26,000 in-home interviews each year
represent the biggest survey of its kind.
       MRI is part of GfK Group AG, Nuremberg, Germany