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Telephones and Answering Machines - UK

Product Type: Market Research Report
Published by: Mintel International Group Ltd.
Published: March 2005
Product Code: R560-1547
Description
Mintel last reported on the UK market for domestic telephones and telephone answering machines (TAMs) in 2003, and the market has continued to evolve in the two years that have followed. Key to the changing size and shape of the market has been the mass appeal of mobile telephones, the introduction and wide take-up of broadband Internet connections in the home and consumers' desire to have the latest electronic equipment.

To establish consumer attitudes towards and habits in using domestic telephones and telephone answering machines, Mintel instructed the British Market Research Bureau to conduct a survey of 976 adults aged 15+ in December 2004. Respondents were asked a series of questions that elicited information highlighting potential avenues for manufacturers and distributors of these products to pursue.

This report considers the hypothesis that: "The telephone and answering machine market has reached a crossroads. It must either seize the initiative, placing itself at the forefront of technological developments and so re-capture the public's interest, or accept a subservient role, simply adding features and functions that have proved popular with mobile phones. This latter positioning may result in the answering machine becoming seen as arcane, and phased out of most homes in favour of voicemail. The former position will rely on innovations being seen as affordable and useful.

Table of Contents


Introduction and Abbreviations

Report coverage and definitions
Consumer research
ACORN
Advertising data
Abbreviations


Executive Summary

94% of households have a landline
Mobiles on the move
Wealth of the nation
Domestic landline market hits £265 million in 2004
Far from just hanging on
BT remains dominant...
...but other key players have designs on top spot
An adspend recovery?
Telewest Broadband Eurobell tops the list
Electrical multiples remain the main route to market
Smooth talkers
Cost issue weighs in
Older people prefer landlines

Technology could save the day

Market Drivers

Telephone lines and answering services hit a wall
Done talking?
Figure 1: Proportion of households with none, one, two, three or more telephone lines, 2001-04
All in one and one for all
Figure 2: Ownership of telephone equipment, by main type, 1998-2004
Cordless phones most popular among wealthier families
The ubiquitous mobile
Figure 3: Mobile phone subscribers, in millions, 1994-2004
Voicemail standoff
Worldwide and home-based - the Internet
Figure 4: Internet usage at home and work, place of study or elsewhere, 2003-04
A little more conversation
Broadband broad base
Wi-Fi and Internet phones on the way for homeowners
The email effect
Digital switchover
Employment impact
The popularity of working from home
Figure 5: Trends in working from home, by gender, age and socio-economic group, 1999-2004
A popular option for the self-employed
Figure 6: The UK workforce and self-employed as a percentage of the workforce, 1999-2004
A high-spending, high-tech culture
Figure 7: PDI and consumer expenditure, at constant prices, 1999-2008
Smaller households are becoming the norm
Figure 8: Trends in household size, 1999-2009


Market Size and Trends

A wealthier market...but room for caution
Figure 9: UK retail sales of telephones and answering machines, by volume and value, 1999-2004
Topped out?
Figure 10: UK retail volume sales of telephones and answering machines, by sector, 2000-04
On a slippery slope?
What price an answer?
Figure 11: UK retail value sales of telephones and answering machines, by sector, 2000-04
Corded phones cling to a third of the market
Figure 12: UK volume sales of telephones and answering machines, by sector, 2004
Time to give up the ghost?
Figure 13: UK value sales of telephones and answering machines, by sector, 2004
The average price of a landline phone and answering machine rises
Figure 14: Average cost of a telephone and telephone answering machine, 1999-2004


Market Segmentation

A healthy market?
Figure 15: UK retail sales of cordless telephones, by volume and value, 1999-2004
Integrated answering machines
Figure 16: UK retail volume sales of cordless telephones, by type, 2000-04
Value of corded phone sector has halved since 1999
Figure 17: UK retail volume and value sales of residential corded telephones, by type, 1999-2004
Cheap at half the price
Figure 18: Average price of corded phones, 1999-2004
TAMs and answering machines endure a steep decline
Figure 19: UK retail sales of TAMs and answering machines, by volume and value, 1999-2004
A nail in the coffin for standalone units
Figure 20: UK retail value and volume sales of TAMs and answering machines, by type, 2000-04
What can be done?


The Supply Structure

BT remains the biggest provider of cordless phones
Figure 21: Selected estimated brand shares of cordless phones, 2000-04
Four companies account for 75% of the corded phone sector
Figure 22: Manufacturer brand shares of corded phones, 2000-04
BT and Betacom stand out in a shrinking market
Figure 23: Manufacturer brand shares of TAMs and answering machines, 2000-04
Key players
BT
Binatone
Betacom
Philips
Panasonic
Significant others
Amstrad
Doro
Geemarc


Advertising and Promotion

Above-the-line adspend in decline
Figure 24: Main monitored media advertising expenditure on residential telephone answering machine equipment, 1999-2004
Phone sexy
Telewest Communications tops the list
Figure 25: Main monitored media advertising expenditure on residential telecommunications equipment, by selected companies, 1999-2004
Telewest adspend far outstrips the rest
Figure 26: Main monitored media advertising on residential telecommunications equipment, by market share of selected companies over the period 1999-2004


Distribution

Independents and specialist phone shops fade away
Figure 27: UK retail value sales of cordless telephones, by outlet type, 2000-04
Storing up trouble?
Catalogues get a bigger slice of a smaller pie
Figure 28: UK retail value sales of corded telephones, by outlet type, 2000-04
No winners in a shrivelling sector
Figure 29: UK retail value sales of TAMs and answering machines, by outlet type, 2000-04
In the public eye
Figure 30: Phone and answering machines sold through selected retailers, by manufacturer/agent, January 2005
Who will sell the high-tech solutions?


The Consumer

Cordless is king
Figure 31: Type of telephone owned, 1998-2004
Cordless phones for the settled down
The bigger the better
Consumers in London and the South East are big cordless supporters
Pay-as-you-go is the way to go
Figure 32: Types of communication used, December 2004
Almost a quarter of 35-44-year-olds have an answering service/machine
Third agers provide long-time support
Storing up messages
Attitudes towards communication
Figure 33: Attitudes towards communication, December 2004
Thumbs up for texting
It's good to talk, but better to text?
Figure 34: Attitudes towards communication, by types of communication used, December 2004
Stressing the text
The write way
A cordless incentive for those who think mobiles are intrusive
Home telephone advocates...
Figure 35: Home telephone usage, December 2004
...and who they are
Pay-as-you-go could win over the masses
It's a buyers' market


The Consumer - Detailed Demographics

Telephone and answering machine ownership
Figure 36: Type of phone, by age, presence of children and marital status, 2004
Figure 37: Type of phone, by household size, lifestage and Mintel's Special Groups, 2004
Figure 38: Type of phone, by gender, socio-economic group, working status and region, 2004
Answering machines and voicemail
Figure 39: Types of answering service/device used, profiles for VoIP email/answering machines, by gender, age, socio-economic group, region, working status, presence of children, household size, lifestage, supermarket usage, media usage, tenure, commercial TV viewing, ACORN categories and Mintel's Special Groups, December 2004
Attitudes towards the home telephone
Figure 40: Home telephone usage, by gender, age and socio-economic group, December 2004
Figure 41: Home telephone usage, by media usage, tenure and supermarket usage, December 2004


The Future

Time is running out for answering machines...
...but technology may buoy the cordless and corded phone industry
Answer-fun...
...and practical too
The next step or a great leap forward
The next generation of telephony
Not just cordless...but wireless
Help on the high street
Safe as houses?


Forecast

Figure 42: Forecast of the UK retail sales of telephones and answering machines, by value, 2004-09
Cordless phones continue to lead the way
Corded phones continue to suffer
TAMs and answering machines will fade out eventually
Figure 43: Forecast of the UK retail sales of telephones and answering machines, by volume, 2004-09
Threats to the market
Factors used in the forecast
Ordering and More Information
Price and Delivery Options



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