Feature phones dropped from gov’s inflation basket

Feature phones dropped from gov’s inflation basket

The Government’s method for calculating inflation is a crucial tool for the Bank of England, businesses and governments alike, now it’s a tool that will no longer feature the humble feature phone.

 

The Government’s Office for National Statistics measures the prices of a ‘basket’ of common items in stores and websites up and down the country to monitor this vital economic indicator.

 

A spokesperson from the ONS told Mobile that, ‘Standard mobile phones are being removed from the inflation basket as their decline in popularity has been making it difficult to collect consistent prices for them.’

 

O2 had previously announced in mid-2016 that they would not be stocking non 3G/4G phones in both their consumer and enterprise channels.

 

The ONS’ comments come despite many players in the feature phone market telling Mobile that the decline had bottomed out or at least slowed, with Doro UK MD Chris Millington stating, 'This is a surprising move as measuring an inflationary trend on just the smartphone category will prove difficult, as smartphones are generally getting cheaper by nature and models change fast. Although the feature phone market has declined over previous years it has now levelled out and at Doro we have seen growth due to our focus on seniors, with 2016 being our best ever year. As feature phones have a longer life cycle, the price trend in such a category will, in my view, add more insight and relevant data to the inflationary measure, far more than smartphones which could paint an inaccurate picture. It will be interesting to see how the figures change as a result.'

 
Alcatel’s UK Director William Paterson previously told Mobile, ‘The market is getting smaller but we have continued to grow within it, there’s still a market for it, both in the consumer and enterprise channels.’

 

Smartphones were added to the ONS’ inflation basket in 2011 while mobile phones were added back in 2005, with the rapid rate of technological advancement in the field forcing the ONS to bring in ‘quality adjustment methods’ which are now used in other technological fields.

 

The ONS’ decision comes in the same month that a feature phone became the most talked about device of Mobile World Congress. Referencing the resurgent popularity of HMD’s rebooted Nokia 3310, an ONS spokesperson told Mobile, ‘ONS will keep this item under review and reconsider their inclusion, should their popularity and availability increase in the future.’

 

It includes hundreds of items as diverse as doughnuts, vegetarian burgers, cigars, replica football shirts, acoustic guitars, caravans, door handles and dog kennel fees. More accurately titled, the inflation basket of goods and services would be called ‘the inflation truck load of everything but the kitchen sink’, for those curious; the kitchen sink was only removed from the ONS basket this year.

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