The importance of trust: Online privacy issues and the consumer’s relationship with free products and services

With the ability to connect with friends and strangers via the internet (through free social networks, forums and blogs, and free mobile applications), the dissemination of personal information online is on the increase. But this online freedom can result in ‘real life’ problems – the spread of personal information beyond the owner’s wishes, or even greater vulnerability to criminal activity. With online privacy hitting the headlines recently[1]and the Mobile Entertainment Forum launching their Privacy in Mobile Applications Initiative[2], issues of privacy and trust have come to the forefront of consumer consciousness.

Website owners and application developers who offer free products and services, such as Google, Facebook, and Twitter, are currently struggling to strike a balance between maximising the utility of the personal data they receive whilst meeting the needs of their consumers for a trusted, non-invasive service. There are two ways businesses can proceed: minimising consumer concerns about trust, or maximising the advantage of using the service, website or application. These approaches can be used simultaneously and are theoretically most effective when combined.

Personal Navigation Devices (PNDs) will still compete with smartphones for market share in the short-term. However, in the long-term, the increasingly comprehensive functionality of the smartphone, together with its ability to cater to consumers’ needs beyond simply mapping and navigation, is set to overtake PNDs.

In November 2010, GfK carried out some research which revealed that 70% of smartphone owners in the UK, Germany and France preferred to use a dedicated PND for in-car navigation rather than their smartphone. Despite this, smartphones continue to offer increasingly sophisticated mapping, navigation and location-based services – so how has this affected the PND market?

Certainly, the navigation market is not yet saturated. GfK surveyed over 1,800 respondents in the UK and the US in September 2011 and results showed that 37% owned neither a smartphone nor any kind of PND. At the other end of the spectrum, just under a fifth of respondents owned both a portable PND and a smartphone. Interestingly, owning a PND does not reduce the usage of location-based services on smartphones  - of those who own both, 91% use their smartphone for some form of mapping, navigation or location-based service.