University of Roehampton: Eco-Fone Report on UK Smartphone Market

This report provides a comprehensive analysis of Eco-Fone's smartphone business in the UK, examining market trends, customer behavior, and financial performance. It investigates the overall smartphone market, forecasting adult usage and highlighting the growing market among older customers. The report analyzes the feasibility of expanding the business to Kingston, considering both pros and cons, and assesses the costs associated with a new building. Furthermore, it tests the potential differences in net takings between Eco-Fone's two existing shops and addresses customer satisfaction and quality procedures. The report concludes with key findings and recommendations for Eco-Fone's future strategies, based on the provided data and analysis of the UK smartphone market.

Running head: REPORT FOR ECO-FONE 2019
Report for Eco-Fone 2019
Name of the Student
Name of the University
Author Note

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Executive Summary
The objective of the paper is to analyze the future aspects of Eco-Fone in the UK. Eco-Fone
manufactures smartphone with accessories. The management of the company has planned to
expand its retail business in two new cities. On this account, the paper attains to develop a study
regarding the customer satisfaction and product quality analysis with respect to the evolving
market demand in the UK. The paper initially discusses the disparity in the net takings of the
company’s two different shops. Looking forward, the study highlights the futuristic aspects of
the smartphone business in the UK economy.

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Table of Contents
Introduction......................................................................................................................................3
1. Analysis of Issues for Eco -Fone Smartphones...........................................................................3
1.1 An Overview of the Mobile phone market in the UK..........................................................3
1.2 Forecasting the UK Adult Smartphone use.........................................................................4
1.3 Smartphones – A potential market for older customers......................................................4
1.4 Feasibility of Expanding business to Kingston using Pros and Cons table.......................5
1.5 Costs of a New Building.......................................................................................................6
1.6 Testing the Possible Difference in Net Takings in the Two Shops.....................................6
1.7 Customer Satisfaction...........................................................................................................7
1.8 Quality Procedures...............................................................................................................8
1.9 Conclusions and Import Findings.......................................................................................9
Reference list.................................................................................................................................10

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Introduction
Smartphone is now an integral part of human life. Its evolving strength and smart
application have emerged a huge consumer support from both developed and developing
countries. The data reveals that annual sales of smartphones are recorded at 1.5 billion. The
objective of this paper is to evaluate sale trend of Eco – Fone smartphone in UK. Since 2014,
Eco-Fone has been operating its business through two shops located at Richmond and Putney.
Recently, the company has found a new couple of purchasing trends from the customer
perspective. One trend denotes the growing number of older customers for smartphones and
another is remarkable disparity in net sales of two shops.
1. Analysis of Issues for Eco -Fone Smartphones
1.1 An Overview of the Mobile phone market in the UK
Smartphone adoption in the UK market in the last two years has grown strongly by 4%
for every year. According to the report, emailing is top most activity which is observed among
the smartphone users in the UK during 2016 and 2017 (Deloitte.co.uk 2020). Following that
people make calls from the smartphone. This report clearly states that usage of smartphone in
work is dominated by email accessing. Evolving numbers of utility apps with the affordable
price rate has been set to capture the mass number of customers (Chiyangwa and Alexander
2016). Smartphone is the integral part of the today’s life style in the UK. From education to
household sector, smartphone has overwhelming presence across the country. Afterwards, it
could retain 45% of the cost in future if smartphone owners want to resale the product in the UK
market. The advanced IT security and strong understanding of the consumer demand enhances
the acceptance across the smartphone consumers. The use of smartphone is not only limited for

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the personal purpose also applicable for the commercial platforms. A number of companies
operate business through smartphone after installing necessary applications in the electronic
gadgets.
Email Making standard
calls Acessing the
company internet Managing my
time / workload
0
5
10
15
20
25
30
35
40
45
Figure: Top four activities in smartphone using in 2016 and 207
Source: (as created by the author)
1.2 Forecasting the UK Adult Smartphone use
The research paper of Deloitte indicates that over 35% of adults use smartphone in the
interval of five minutes. Adults use smartphone while walking on road sand even one hour
before going to sleep. Approximately 20% of the people aged between 16 and 24 years spends
hundred times per day. Most of the adults in the UK use smartphone to pay the car parking fees,
saloon payment and tour purpose. The data suggests that 90% of adults in the UK will have
smartphones at the end of the year 2020. The insight view states that 85% of the users use their
own devices. The multiple applications of the smartphone are the driving force of the
2016 2017

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smartphone demand among the adults (Ofcom 2019). They use smartphone for multiple
purposes, like, study, entertainment and online gaming platform (Jeong et al. 2016). The
emergence of the music streaming service and adoption of portable jukebox enhance the quality
of smartphones.
2011 2012 2013 2014 2015 2016 2017 2018
0
10
20
30
40
50
60
70
80
90
f(x) = 6.51428571428571 x − 13052.0285714286
R² = 0.972026925953628
Year
% of UK aduslts use smartphones
Figure : Line chart of smartphone use among UK adults
Source: (as created by the author)

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For 2018,
y = 6.5143 * 2018- 13052, where x = 2018
= 93.8574
And for 2019, y = 6.5143 * 2019 – 13052 = 100.317, where x = 2019
The linear trend line analysis asserts that 93% in 2018 and 100% of the UK adults in 2019
will use smartphones. More than 100% improvement in the customer demand is impossible in
pragmatic sense. This implies double increment within one year. As per the report, 88% of adults
will be using smartphone in 2018 and even more in 2019. On this account, the paper attains to
apply another trend line analysis using the Polynomial method (Shao et al. 2015). Polynomial
method can be applied instead of linear trend line. In this case 87.52% and 88.68% of the UK
adults will be having smartphones in 2018 and 2019 respectively. From the statistical analysis,
Polynomial analysis can be considered as the best forecast model as R2 is greater for Polynomial
(99%) than Linear forecast model (97%).
Year Year
Smartphone use among UK adults
(%)
Polynomial trend
Liner
trend
2012 1 52 52
2013 2 62 62
2014 3 70 70
2015 4 76 76
2016 5 81 81
2017 6 85 85
2018 7 87.52
93.857
4

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2019 8 88.68
100.31
7
Source: (as created by the author)
0 1 2 3 4 5 6 7 8 9
0
10
20
30
40
50
60
70
80
90
100
f(x) = − 0.688905357142856 x² + 11.3708755952381 x + 41.6727839285714
R² = 0.999542266118319
smartphone use among UK adults (%)
Figure: Trend line using polynomial method (2015 - 2019)
Source: (as created by the author)
1.3 Smartphones – A potential market for older customers
The smartphone ownership of the older population aged between 55 and 75 years has
exhibited strong improvement from 6% to 71% over the last couple of years. More than 30% of
the older customers often use the smartphone for the daily utility purpose, like for electric bill
payment, appointment for doctors and online banking service (Öztaş 2015). In the UK, more
than 40% of the older customers regularly check news and weather update through their
smartphones. The frequency of usage has been so intensified that old people also gaze on this

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device while eating and talking with family members and friends. One out of 8 persons aged
between 65 and 75 years have agreed that they are extremely addicted with their smartphones.
According to the report, the following features make the smartphone popular among the older
customers (BBC News 2020). These include:
Bigger screen of the smartphone: This wider screen helps the older customers to operate the
smartphone as most of the older customers suffer from poor eyesight (Ijoart.org 2020).
Considering the fact, older customers prefer to buy premium handsets to get smartphone with
bigger screen.
Number of convenient applications: With the help of application older customers can make
payment, book taxi, health check-up and financial transactions (BBC News 2020). For example,
the latest introduction of face recognition app will use the smartphone use comprehensive and
easy for the elder customers.
Free from fiddling: Elder people do not need to fiddle with the buttons while using the latest
smartphone. The advanced quality of the features asks for finger impression instead of digits as a
password to unlock mobile.
1.4 Feasibility of Expanding business to Kingston using Pros and Cons table
Kingstone is labeled as one of the happiest places in the UK. The location, affordable
cost of living and easy access to the transportation are the significant aspects of the city. The
famous Richmond Park and Thames river are situated around Kingstone. The estimated cost of a
retail shop is around £100,000 to £300,000. The following table highlights the probable positive
and negative sides if the Eco-Fone management attains to expand the business in Kingstone.

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Should we expand our business to Kingston?
Pros Score/10 Cons Score
/10Job opportunity 7 Large number of competitors 8
Infrastructure facility 8 Establishment cost 7
Consumer demand 9 Regulatory framework 6
Role of Kingston government
government
8 Accession policy 8
Transport system 9 Business strategy of competitors 8
Property cost 7 Substitute of Eco-Fone 7
Availability of vacant shops 6 Price determination 6
Total Pros 54 Total Cons 50
Average Pros 6.75 Average Cons 6.25
The following pros can be drawn from the above table. Ample job opportunities guarantee
the employment of the local people in Kingston. Advanced infrastructure facility reduces the
logistic expenditure of the transport service (Zhu et al., 2017). Advanced infrastructure facility
reduces the logistic expenditure of the transport service. The city people are accustomed with
advanced technology and therefore the consumer demand for the electronic device is normally
high in Kingston. The effective role of Kingston government encourages the business expansion
procedure. It takes hardly half an hour to communicate with the Central London. Henceforth, any
shop owner can expect large number of customers to visit the shop.
In terms of the negative aspects, it can be asserted that over crowd can minimize the job
opportunity for individuals. Shop owners experience huge establishment cost in the city area. .
Presence of large number of competitors is the great challenge for the Eco-Fone in Kingston.
Excessive government intervention may create mismanagement among the business regulation
process (Lam 2016). Many businessmen operate their businesses in Kingston due to the prime
location. This increases the market competition which can aggravate the relationship between
buyers and consumers.

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Referring to the above discussion, the company should expand its business to Kingston as
average score of pros is greater than average score of cons.
1.5 Costs of a New Building
As per the statement, ECO-Fone wants to extend its operation with the help of improved
facilities, like, highly-suitable new premises located in central Kingston. The reported asking
price for the new building £ 400,000, however, the price can be reduced to £ 350,000 after
negotiation. In this regard, the company wants to calculate the monthly cost of 15 year
repayment mortgage of £ 350,000 when mortgage interest rate is 7% per annum. The following
table provides the cost structure of the new building in details.
NPER 15
Rate 7%
PV £ 350,000.00
Monthly Cost £ 38,428.12
Source: (as created by the author)
Here, Number of periods (NPER) is given for 15 years. Here, NPER denotes to the
certain time period which is required to clear at 7% interest rate. The present discount value (PV)
is £ 350,000. Now, Eco-Fone will face monthly cost of £ 38,428.12 which is derived by using
the PMT formula in excel. The standard PMT formula is
=PMT (NPER, rate, -PV), where, rate = 7%, NPER = 15, and PV = £ 350,000

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1.6 Testing the Possible Difference in Net Takings in the Two Shops
Sample 1
Mean 100
Stdev 20
Size 40
Sample 2
Mean 90
Stdev 40
Size 40
Z value 1.414213562
Probability
=P(Z>=1.414)+P(Z<=-
1.414)
0.157361902
Decision (0.05) Null hypothesis accepted
Source: (as created by the author)
Referring to the statement, two retail shops of Eco-Fone operate follow different market
strategy. Under sample size for shop 1 is taken 40 with mea £100 and a standard deviation
(Stdev) of £20. On the other hand, sample size for shop 2 is taken 40 with mea £90 and a
standard deviation (Stdev) of £40. The null hypothesis is stated as net takings of two shops are

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same. After made the statistical calculation using Z statistics in the excel file, it is clear that the
null hypothesis will be accepted as the probabilistic value of 0.15 is greater than 0.05 (5% level
of significance). Z statistics measures the how far the standard deviation is different from mean.
It is recognised as a standard score. In this case, Z score measures how standard deviation of the
net takings of two shops differs from its mean values of the two shops. The positive value of Z
statistics implies that net takings are greater than the mean value.
1.7 Customer Satisfaction
Customer satisfaction is the key criterion for the business establishment. The
determination of the customer satisfaction depends on some service parameters including the
product quality, purchasing price and service process (Varley 2014). All combining impacts
influence the customer satisfaction in the market. However, the importance of the product
parameters varies across the customers. Some of the customers prefer quality instead of quantity
and price. It has been observed that a group of buyers are ready to pay relatively high market
price in order to get advanced product quality and service. Developed country like the UK
maintains a standard quality of the product as to control the harmful impacts of the electronic
gadgets on the environment and customers. Currently, every smartphone developer is focusing
on the improvement of the mobile technology, network system and interface features of the
mobile (Gelay et al., 2015). The advanced technology assures the less use of infrared technology
in the device. This resulted in the less amount of radiation activity in the nature. The network
system is the integral part of the mobile phone business. Considering the fact, the development
of the mobile towers needs to be restricted in the residential area. The packaging of the final
product needs to be appealing to the customers labeling the important features on the smartphone

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(Www2.deloitte.com 2020). Further, the paper has incorporated a data analysis to find out the
appealing features of the Eco-Fone product.
Q1- Between 3 and 6 months (average score: 2.95)
Q2 – Between 1 and 3 years (average score: 2.89)
Q3a- Fair customer service /support (average score: 1.98)
Q3b – Good quality of product / service (average score: 2.50)
Q3c- Good sales staff (average score: 3.25)
Q3d – Good price/ value (average score: 2.51)
Q4 – neutral satisfaction (average score: 2.51)
Q5 – Neutral (average score: 2.52)
Q6 – Likely (average score: 3.70)
Therefore the result can be summarized in a following way. Customers would like to
recommend others to purchase the products as they are convinced by the product service.
Meanwhile, the product quality has also registered an average score.
1.8 Quality Procedures
The accounts department of Eco-Fone sends out approximately 10,000 invoices per
month and two out of 10,000 is returned due to error on monthly basis. Quality assurance
department wants to assure that monthly more than three invoices will be allowed to get returned
with less than probability of 15%. This statement can be justified by the application of the
Poisson distribution to find out the importance of quality assurance (Bagheri et al. 2014).
Poisson distribution will be applicable as n (10000) ≥ 100. The number of observations is 10000
and np≤ 10 , as np=μ=2 ≤10

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μ 2
P(X>3) =1-P(X=0)-P(X=1)-P(x=2)
0.323323584
Source: (as created by the author)
From the table it can be said that there is approximately 33% chances of more than three
invoices can be returned in a month. In this way, Poisson distribution finds out the probability of
a certain number of events occurring within a certain time interval.
1.9 Conclusions and Import Findings
On a concluding note, the paper asserts that the management of the Eco-Fone should
examine the condition of the local economy with respect to the consumer choice and preferences.
The company has registered different amount in net takings from two different shops situated
two different cities, Richmond and Putney. In this regard, the study observes that difference in
the establishment cost and average income of the local people are the significant monetary
parameters for the smartphone manufacture. The report illustrates that both adult and old
customers are exhibiting strong demand for the smartphone. In this regard, the management
should overhaul the possible net takings about the new shops. The company should analyze the
cost and revenue before initiating a process for a new shop. It is a corrective measurement as a
part of enhancing the customer satisfaction towards the manufacturer company. Finally, the
paper concludes that more than 90% of adults in the UK will own smartphone within 2020. This
signifies the strongest strength of the consumer demand in the smartphone market. Therefore, the
company’s net takings will be increasing following the expansion of smartphone business driven
by the augmented cumulative market demand in the UK.

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Reference list
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comparison of estimations in the generalized exponential-Poisson distribution. Journal of
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behavior analysis toolkit. In 2016 IEEE Winter Conference on Applications of Computer Vision
(WACV) (pp. 1-10). IEEE.
BBC News. (2020). Smartphone sales boom with over-55s.
https://www.bbc.com/news/technology-41319684
BBC News. (2020). UK is 'addicted to smartphones'. https://www.bbc.com/news/business-
37468560
Chiyangwa, T.B. and Alexander, P.T., 2016. Rapidly co-evolving technology adoption and
diffusion models. Telematics and Informatics, 33(1), pp.56-76.
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mobile-consumer-survey-2017_uk-cut.pdf
Gelay, G., Hussey, R.M. and Thakkar, B., Hand Held Products Inc, 2015. Mobile device having
an improved user interface for reading code symbols. U.S. Patent 8,985,461.
Ijoart.org. (2020). http://www.ijoart.org/docs/STRATEGIES-ADOPTED-BY-MOBILEPHONE-
MANUFACTURERS.pdf
Jeong, S.H., Kim, H., Yum, J.Y. and Hwang, Y., 2016. What type of content are smartphone
users addicted to?: SNS vs. games. Computers in Human Behavior, 54, pp.10-17.

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Lam, N.M., 2016. Business-government relationship in economic development. Asian Education
and Development Studies.
Ofcom. (2019). A decade of digital dependency.
https://www.ofcom.org.uk/about-ofcom/latest/features-and-news/decade-of-digital-dependency
Öztaş, Y. (2015). The Increasing Importance of Mobile Marketing in the Light of the
Improvement of Mobile Phones, Confronted Problems Encountered in Practice, Solution Offers
and Expectations. Procedia - Social and Behavioral Sciences, 195, pp.1066-1073.
Shao, Y.H., Gu, G.F., Jiang, Z.Q. and Zhou, W.X., 2015. Effects of polynomial trends on
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telecommunications/deloitte-uk-plateauing-at-the-peak-the-state-of-the-smartphone.pdf
Zhu, W., Ng, S.C., Wang, Z. and Zhao, X., 2017. The role of outsourcing management process
in improving the effectiveness of logistics outsourcing. International Journal of Production
Economics, 188, pp.29-40.

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Appendix
Figure: % of UK adults using laptop, smartphone and tablet
Figure: Predicted adult users of smartphone

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