The third device: Can the early success of eBook readers continue when faced with the introduction of multifunctional competitor devices?

The mainstream consumer generally opts for a device that integrates lots of functionality. If the ‘third device’ with greater functionality does take off, eBook readers will, more than likely, become a niche product.


I love the idea of an eBook reader especially one with an ‘always on’ 3G connection. The battery life is superb, lasting in many cases well over a week and the e-ink screens are almost essential for prolonged spells of reading. I like the idea of receiving my favourite newspaper and other magazine subscriptions directly to a device all ready for my morning commute.

However, my desire to own an eBook reader is not driven by a personal urge to carry around a library of novels.  It is actually for business purposes. I could make better use of my commute by catching up on the news and reviewing work documents. Indeed, having access to meeting documents or presentations on an eBook reader whilst travelling to a meeting would be highly convenient.

It’s encouraging for eBook readers that sales of them in the USA are supposedly strong. Barnes and Noble’s Nook quickly sold out and Amazon’s Kindle is their “number one best-selling” product on Amazon.com. However, no one is sure how many eBook readers have been sold due to the secrecy of the sales figures, particularly from Amazon. Now with the arrival of tablet PCs, especially Apple’s iPad, eBook readers face stiff competition.

As a result, I fear that interest in eBook readers will be limited to two types of users; business people and extreme reading enthusiasts. If there is a big uptake in consumer demand for a ‘third device’ (i.e. something that sits inbetween a smartphone and a laptop) then I believe that the large majority of people will opt for a device that has multiple uses.

We have already seen that those who have experienced the benefits of an iPhone (and its  seemingly unlimited uses) are highly interested in tablet PCs. Now that the dust has settled on the announcement of Apple’s iPad, many commentators believe its success will rely on the consumer being able to tailor the device to their own specific needs. Further to this, others are already excited at the new applications the iPad will enable.  One of my favourites is to use it as a board game.

The specialist nature of eBook readers seem to be reflected in interest levels among UK consumers. Prior to Apple’s announcement of their iPad, GfK Technology research showed that interest levels in eBook readers (23%) was half that of tablet PCs (45%). Perhaps not surprisingly, interest levels for eBook readers are higher among those who had recently bought either a physical newspaper or a book.

It is my view that the success of a product is highly dependent on the problem it solves or the demand it satisfies. History has shown that those devices that satisfy numerous need states naturally succeed, limiting specialist devices to a niche audience.

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Research Info

*1000 online interviews were conducted by GfK NOP among a UK representative sample of internet users. The fieldwork was conducted between 15th – 19th January 2010

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February 26, 2010 | Ryan Garner | Tags: , , , , , , , | No Comments »

Will consumers rise to operators’ high hopes of a Apple App Store challenge?

The launch of the Wholesale Applications Community is potentially a substantial challenge from network operators to the dominance of Apple. Managing consumer demand and the consumer experience are likely to be key.

Recent news that 24 leading network operators are launching The Wholesale Applications Community, a mobile apps store which aims to make it easier for developers to build and sell apps “irrespective of device or technology”, begs the question of how consumers will respond.

It’s certainly a tough market for network operators with recent research by GfK Technology showing handset manufacturers dominating the apps market and indeed, a recent report by Gartner gives the somewhat startling statistic that Apple is responsible for 99.4% of mobile apps sales in 2009.

The four key factors that GfK Technology consider to be critical in driving the potential success of this sort of store are:

  • High awareness: Significant investment is needed to promote the site so consumers know of its existence and where to go to access it
  • ‘Must-have’ apps: Apple has been instrumental in building the market for mobile apps, any store needs to be able to offer apps that tap into consumer needs across a wide range of different demographics and lifestyles
  • Excellent user interface: Possibly a challenging area for operators as the user interface for the store and the apps will need to work across a wide range of devices. Furthermore, finding a common and easy to use purchase mechanism is essential if operators want to eat into Apple’s 99.4% share of app sales.
  • Getting commercials right: So that developers are incentivised to create new applications and they are attractively priced for consumers to purchase.


The prize for getting this right is huge, the global market for mobile apps is in the billions and whereas Apple are constrained to only selling to iPhone or iTouch users there appears to be no such constraint for this initiative. Network operators have one big advantage over some other player – their proximity to the consumer which they will need to leverage in order to make this a success.

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February 25, 2010 | Colin Strong | Tags: , , , , | No Comments »

Apple Apps Store leads for mobile but market still open

We often seem to think that the Apple App Store has a dominant market position for mobile devices helped in no small part by the extensive press coverage it seems to attract. Recent research by GfK Technology (1,000 online interviews conducted in Jan 2010) suggests, however, that the apps store market is in reality more varied with a wide range of stores competing for business.

The Apple Apps Store does indeed lead the market but with 39% of consumers (that downloaded an application for their mobile device in the last 3 months) using it rather than a convincing majority. That’s not to say that they are better than other stores at extracting money from consumers or encouraging repeat visits but in terms of where individuals do their mobile apps shopping, they still have some way to go before taking the majority of the market.

Of course, this is in no small part a reflection of the Apple iPhone’s market share as it still represents a very small proportion of the overall number of handsets in the market so unless you have one, the Apple Apps Store is not much use to you. Given this, it certainly seems to be punching above its weight with a vastly higher proportion of iPhone users visiting the store than is the case for other handset makes

Following the Apple apps store (in the research) is Ovi and BlackBerry, both with 20% share of the market and then Samsung with 13% share. It’s also worth a noting that Android currently have a 10% share of the market (among those accessing a mobile apps store in the last three months) which is a pretty impressive place to be after such a short space of time.

It’s interesting that the top 4 mobile apps stores are handset manufacturers rather than network operators. Nick Clarey, founder of Airsource, a mobile apps consultancy based in Cambridge (UK), thinks that operators have a greater challenge to make headway in this space ‘ The difficulty that operators face is that their apps stores need to cover the full range of handsets across different manufacturers. For a manufacturer they can always just focus on their models which means they are better able to have a better interface for their customers.’

Our research certainly shows Orange (11%) Vodafone (10%) and O2 (9%) share of the mobile apps store market trailing handset manufacturers. The benefit they have, of course, is their proximity to the customer with a very intimate knowledge of their mobile phone behaviours so what they might lack in terms of being able to maximise the customer experience across devices they need to compensate for through leveraging their customer closeness.

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February 15, 2010 | Colin Strong | Tags: , , , , , , , , | 2 Comments »

Mobile advertising continues to build

Mobile devices continue to be a significant advertising channel according to recent research GfK Technology recently undertook in the UK.  The proportion of consumers who had received some form of mobile advertising stood at 47%, fairly consistent with the findings from Q2 ’09.  The big shift is perhaps the growth of iPhone as a staggering 84% of iPhone users say they have seen mobile advertising in the last 3 months vs. 45% of all other mobile phone users.

SMS continues to be the dominant form of mobile advertising with 38% of UK consumers receiving at least one in the last quarter.  It’s therefore not surprising that network operators are putting significant investment into this area with O2 launching their SMS marketing service, More, in December and Orange partnering a trial with Blyk mid ’09.

Work that GfK has undertaken in this area identifies a number of criteria that brands need to consider in order for this form of marketing to be most effective.  GfK recruited a number of consumers to an opt-in ‘panel’ to trial mobile advertising.  Although this took place some time ago, the findings are just as relevant today.  The key findings included:

  • Positive consumer response:  The trial prompted a favourable reaction from participants with a staggering 84% saying they were likely to recommend the service; explicit permission to receive text messages was considered to be critical
  • Relevance:  Appropriate targeting of offers to participants was important and was felt to have driven the positive response
  • Creative execution:  Triallists looked for snappy, entertaining or informative text adverts with a strong emphasis on humour


The trail was able to show a positive impact of advertising on raising awareness and on building brand perceptions but there was a striking 63% of people claiming to have replied or taken action as a result of receiving a text advert.  In fact a significant number of responses were generated to text adverts that had not specifically requested a response.  For example, Carlsberg lager ran a campaign involving humour and timely use of the medium, such as ‘PINT! It’s your round.  Probably…Carlsberg.’  This went out at 10.30pm on a Friday and a range of responses came back including ‘It was and I got 6 in’!

In this context, the fact that SMS advertising has held up so well is no surprise and bodes well for other forms of mobile advertising, and in principle, the mobile device is the ultimate medium for one-to-one interactive marketing.  However, it is our view that brands must not ignore the need for the advertising to be opt-in, relevant and for the copy to be creatively executed, otherwise we will see the promise of this medium quickly evaporate.

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February 4, 2010 | Colin Strong | Tags: , , , , , , , , , , , | 2 Comments »

2010 Tech developments: keep it simple

In recent weeks, so much has been said about what 2010 will bring to the tech landscape that one can’t help but reading with a pinch of salt. For someone that works with customer opinions and observes their behaviour for a living, it becomes apparent that some of the predicted products and services, if they do make it to market, are destined to remain within that niche group of technology enthusiasts that created them in the first place.

Many of course have potential, and if implemented and marketed correctly have high chances of making it to the wider masses. That is, if they were ever intended to do so.

So – what is going to really work?

The answer is, well.. simple. Or, rather: simplicity. If given a choice, customers will always choose and glorify products and services that will offer them “more” in less time and with fewer headaches, the tools that empower them to reach a given goal with the minimum of disruption.

Luckily, optimization and simplification are recurrent themes in some of the predictions we stumbled upon:

  • “Third-party authentications will become the norm” (RWW). Trying to remember your password and login for the multitude of sites that request it will be a thing of the past – unless of course, you choose to be among the 46% of British internet users, 15.6 million that have the same password for most web-based accounts
  • Google will launch an inexpensive netbook powered by their new Chrome OS, with one goal in mind: accessing the web (IB-Times). Chrome OS is not meant to replace any of the existing operating systems (Google), and neither is it trying to do too many things; quite simply it is aimed at accessing the web, easily, and fast;
  • Others browsers will copy Google Chrome’s features the simplified interface, the rapid development model, the lightweight extensions, sandboxing, compiling JavaScript code;
  • “There are too many worthless apps and no adequate ways to find the good ones” (RWW) – this is certainly true of the i-Phone in particular, but also of the Android market. The count of apps is going up, but how do we spot the good ones?
  • More consumers than ever will demand the ability to easily interact fully with the mobile web on their phones;
  • Optimisation and stability, rather than raw speed, will acquire a position of relevance in computing. Examples have been set by Snow Leopard already. It will be a tough one as consumers will keep looking at the “higher number” (i.e. processor speed);
  • There will be more attempts at groundbreaking interfaces, possibly still involving touch screen technology;


Innovation extends the number and type of goals that are possible; success is then dependent on these goals being relevant and simple to achieve.

Though functionality is of paramount importance, a non-intuitive user interface will by definition reduce the number of people that will go through the trouble of learning it and using the tool in the first place.

As technology progresses, the number of options increase. The difficulty lies in how companies use those new solutions and advancements. One may choose to allocate the additional processing power available via a faster processor to run more complex operating systems, more demanding applications and fancy transition graphics in their next generation product.  Another may instead choose to re-think, improve, un-clutter, optimise, speed-up.

One thing is certain: the customer will always win in the end, and they’ll win by choosing the “naturally best” fit with their way of thinking. So those innovators in the industry that really think like their customers are likely to be most successful.

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February 3, 2010 | Paolo Lucchi | Tags: , , , , , , , , , , , , | 1 Comment »