COMMUNICATIONS AND INFORMATION
NETWORK ASSOCIATION OF JAPAN

CIAJ conducted its annual study of mobile device use and announces the release of FY2020 findings as follows:

This year’s findings revealed smartphone penetration had reached 98.3%, or almost 100%. On the other hand, the renewal intention dropped by 12 points over the previous year to 29%, which is approximately a third of the peak figure reached in 2015.

The ratio of subscribers to low cost carriers made up of “sub-brands (Y!Mobile, UQ mobile)” operated by the major carriers (MNOs) and MVNOs remained basically the same at 22.9%. There is strong pressure to decrease communication charges. However, the awareness of offers that separate communication charges from device payments is only about 60%, reflecting slower than expected transition to low-cost offers and any major trend to change the status quo is yet to be seen.

The major topic for this year’s study is the launch of 5G services. Recognition of 5G is high at 85%, but only a little over 1% were taking advantage of the service as of early August when the study was conducted. Interest and expectations are high for 5G services, so a rise in uptake is projected.

The other topic this year is the transition to the “new normal society” resulting from COVID-19. This year’s study revealed that use of mobile devices to work from home (on-line meetings) and attend remote classes have increased and approximately half of those surveyed are using some form of mobile/on-line payment. The new normal society is expected to uncover and promote new uses of mobile devices.

(1) Summary

Since 1998, this study has been conducted as a fixed-point observation every April to capture the March sales period, the busiest of the year. However, with the COVID-19 impact this year, the study was conducted from July into early August.

CIAJ post-mailed questionnaires to 1,200 mobile phones users (100 male & 100 female users in each of the following age groups: under twenty, twenties, thirties, forties, fifties, sixties) residing in the larger Tokyo and Osaka metropolitan areas. In addition, of the 1,200 surveyed in the study, the 16 who responded as using 5G services and an additional 100 (chosen randomly) 5G users were surveyed (a total of 116 users) further in order to better understand the state of 5G service use.

Unique findings from this year’s study are as follows.

(2) Device Trends

<Type of device owned>

• The 1,200 people surveyed owned a total of 1,585 devices in the categories listed in the table below.
• 1,180 respondents (98.3%) said their main-use device was a smartphone, while 19 respondents (1.6%) said it was a feature phone.
  

  <Type of device owned by respondents>

  Type of device owned	No. of devices (multiple answers possible) Unit: devices	Main-use device
  Smartphone	1,228 (102.3%)	1,180 (98.3%)
  Feature-phone	24 (2.0%)	19 (1.6%)
  Tablet (with telecom subscription)	320 (26.7%)	1 (0.1%)
  Tablet (only Wi-Fi connectivity)	5 (0.4%)	0
  Mobile Wi-Fi router	1 (0.1%)	0
  Other (PHS)	0	0
  No answer	7	–
  Total	1,585 (132.1%)	1,200 (100.0%)

<Smartphone users approach 100%>

• Smartphone use has gained popularity in all age groups, including respondents in their 60s, with the growth rate over the previous year at 2.0% and approaching 100%.
  

<Continuing decline in featurephone users>

• Featurephone users also decreased by 1.7 points over the previous year to 1.6%.

<Slower decrease in respondents using multiple devices>

• 32.2% of respondents stated they use multiple devices, which is a slight decline over the previous year (32.9%).
• Of those using multiple devices, 82.9% (319 devices) were tablets (with telecom subscription) and 12.5% (48 devices) were smartphones.

(3) User Trends Among Low-Cost Carrier Services

<Increase in user satisfaction among low-cost carrier subscribers>

• 22.9% (n=1,174) of respondents were using low-cost carrier services, which includes MVNOs as well as “sub-brands” operated by the major carriers (MNOs), and has basically not changed over the previous year.
• Overall satisfaction rates over contracts with low-cost carriers were high and satisfaction concerning devices were higher than the previous year in all categories.
• Dissatisfaction over post-sales service fell by 9.8 points from 17.2% to 7.4% this year. Dissatisfaction over speed fell likewise by 4.6 points from 17.5% to 12.9%.

(4) Intent to purchase replacement device

<Low intention to replace devices continues>

• 29.2% of respondents indicated intention to purchase a replacement, which was 11.5 points lower than last year’s 40.7%. This figure is now approximately a third of what it was at its peak in 2015, indicating the further decline in intention to replace current devices.

<Use of current device becomes longer>

• The duration of use of previously purchased device was 31.2 months in 2018, 35.2 months in 2019 and 36.6 months in 2020, increasing by more than 5 months over the two years and reflecting longer use of their current devices.

(5) Decisive Factors for New Purchases

<No change in top 4 factors, with 5G ranking for first time at 6^th>

• There was no significant change in the top 4 decisive factors, including the response rate, with the top 2 continuing to pertain to price and costs.
• On the other hand, “water-proof,” “long battery life” and “high-speed compatibility” continued to rank in the top 11 decisive factors, but all three dropped considerably by more than 20 points.
• The newly added “5G device” ranked 6^th at 26.0%
  

  <Decisive factors in purchasing new devices>

  Factor	% of response (change over 2019)	2019 ranking (% of response)
  Purchase price of device	81.0% (-3.4)	1 (84.4%)
  Monthly payment cost	76.3% (-3.8)	2 (80.1%)
  Mobile telecom carrier	67.6% (-3.2)	3 (70.8%)
  Manufacturer/brand	67.6% (+0.9)	4 (66.7%)
  Water-proof	28.5% (-20.1)	6 (48.6%)
  5G device	26.0% (-)	new item
  Long battery life	19.2% (-32.3)	5 (51.5%)
  Camera features &functions	13.1% (-12.4)	11 (25.5%)
  Design/feel	13.0% (+5.7)	23 (7.3%)
  Beautiful display	12.4% (+0.6)	15 (11.8%)
  High-speed compatibility	11.6% (-36.3)	7 (47.9%)
  Size (snugness in one’s hand)	10.3% (+1.7)	20 (8.6%)

(6) Use of Features and Services

<Surge in video viewership and IP phone use, with big drop in SMS and marketplace apps>

• Features and services which rose by 20 points or more were “traditional text-based e-mail” “watching videos (YouTube, etc.),” “IP phone voice communication (LINE, SKYPE, etc.)” and “searching & browsing (excluding news and newspaper sites).”
• Features and services which dropped by 20 points or more were “SMS (short mail using phone number),” “selling/purchasing via marketplace apps (Mercari, etc.)” and “chatbot (interacting with AI chat services).”

(7) Interest in services and future trends

<More than half of respondents use mobile cashless payment services>

• 51.8% or more than half of respondents were already using mobile cashless payment services.
• Of the respondents using contactless IC payment services, 96.6% were using “mobile wallet” Of the respondents using QR code payment services, 60.2% were using “LINE PAY,” 41.7% were using “PayPay,” 33.9% were using “Rakuten Pay” and 31.1% were using “d Payment.”

(8) Current and potential use of 5G Services

<Awareness of 5G high, but users of the service remain below 2%>

• 42.7% of respondents “had an understanding” of 5G, 42.7% “only recognized the terminology” and together, tally up to approximately 85% awareness of the service, which is higher than 73% recorded in the previous year.
• On the other hand, only 16 people responded that they were using 5G services (as of July through early August), or 1.3% of 1,200 people surveyed.

<Approximately 40% of respondents plan to use 5G services>

• Of the respondents who were not currently using 5G services, 16.2% “planned to use” and 21.0% “would like to use but was undecided about when to start.” Together, these figures amount to 37.2% who plan to use 5G services.

<Many 5G users were satisfied with the fees, but were dissatisfied about connectivity>

• The following figures were tabulated from the 16 of 1,200 respondents to this year’s survey who were already using 5G services and a separate 100 people who were also using 5G services for a total of 116.
• The impression of having used 5G services were as follows. Although 67.2% were satisfied about certain aspects, 74.1% were at the same time dissatisfied about certain aspects. High satisfaction items were “5G pricing plans” at 91.0% (71 respondents) and “price of 5G devices” at 69.2% (54 respondents). Respondents were dissatisfied with “connectivity” at 100% (86 respondents) and “5G service contents” at 31.4% (27 respondents.

(9) Impact of COVID-19 on the use of mobile devices

<Mobile device use increases among 1 in 3 respondents as a result of COVID-19>

• 35.1% of respondents said that the frequency of their use of mobile devices had “increased” as a result of COVID-19, while 63.2% said that their use “had not changed,” indicating that 1 in 3 respondents are using their mobile devices more.
• The reason behind the increased use of their mobile devices includes the following: “telework (on-line meetings)” 46.1%, “on-line classes” 37.5% and “on-line events (parties, music performances)” 10.2%.

(Reference) Plans separating communication charges from device payments

<About 60% aware of separate payment plan, but over 90% don’t take advantage>

• 58.6% of respondents “knew” about plans which separate communication charges from device payments, but 91.8% of these respondents had not switched payment plans.