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Mobile data allowance grows in importance among smartphone owners

Recent research conducted by GfK NOP shows that, among smartphone owners, mobile data allowance is more important than the network operator and the handset type.

From previous posts on TechTalk we’ve shown how the use of mobile apps shows no sign of abating and that the tight integration services on the iPhone drives Apple’s smartphone success. This thirst for apps and services is the reason why smartphone owners are placing greater importance on their mobile data allowance. Smartphone owners now rely on the services their phone provides and taking these away is not an option.

With many UK operators having recently capped their data allowances smartphone owners will think carefully about their next mobile tariff. GfK NOP estimates that 24 per cent of contract customers using smartphones would actually switch operators if they could get a better mobile data allowance elsewhere.

The decision to cap mobile data usage is a sensible one as the major UK network operators have millions of customers who depend on a reliable mobile network. However, in doing so, network operators need to consider the mindset of the consumer. The average mobile phone user including many smartphone users simply don’t know how much data they use. Those who require a data allowance will always prefer an ‘unlimited’ package for peace of mind. Now that ‘unlimited’ data is coming to an end, consumers will look for the safest option; in other words the operator offering the most generous package.

It is easy to see why smartphone owners react this way when you look at the level of importance they place on using services on their mobile phone. Table 1 (below), shows the level of importance consumers place on mobile services in their day-to-day routine:

Table 1: Importance of mobile service usage

There is clearly a stark contrast between the UK average mobile consumer and smartphone users. Given this huge difference in attitudes it is little wonder the extra emphasis smartphone users are placing on mobile data tariffs. The biggest challenge for network operators over the next few years is how they cope with the increasing demand for smartphones and the increase in data usage this will inevitably bring.

This research was conducted in association with Reuters who have published a thorough market analysis here

If you have any questions or comments regarding the research please click here to email us or leave your opinion in the comments section below

RESEARCH NOTES

Research was conducted by GfK NOP in association with Reuters between 16 – 19 July 2010
978 interviews were conducted online among UK adults aged 16 and over. The sample is representative of UK adults with internet access.

Exciting Opportunities for Mobile 3D?

3D stereo anaglyph picture, use red blue glasses to view anaglyphic photo

For the last year or so, 3D has been one of technology’s hottest topics, with the success of 3D movies paving the way for TV manufacturers, to the extent that two in five UK adults now express an interest in buying a 3D screen for their home. But what is the opportunity for mobile device manufacturers?

There has certainly been a lot of market activity (e.g. Sharp’s unveiling of a 3D mobile phone display) in anticipation of consumer demand, but will public enthusiasm migrate to mobile phone devices?

A recent GfK Technology survey, found that 12% of mobile phone users were interested in 3D photos and 8% were interested in 3D gaming. It is likely that the latter and any apps that embrace Augmented Reality or which offer the opportunity to enhance user generated content are going to drive most interest.

However, right now it’s a difficult call as to whether 3D on mobile will really drive the market. It’s up to the handset manufacturers to ensure the execution of the technology lives up to the hype.

To read a fuller article on this topic by Colin Strong, managing director of GfK Business & Technology, click here.

RESEARCH NOTES:

GfK NOP Technology conducted a survey among 996 UK adults in June 2010. The interviews were conducted online and are representative on UK adults who have access to the internet.

PHOTO COURTESY OF:
3dstereopics
http://www.flickr.com/photos/48057488@N06/4746599698/

UK mobile app culture shows no sign of abating

A recent GfK NOP Technology report shows consumers’ love affair with mobile phone applications has turned from a dalliance into a settled and dependable relationship. With a fifth of smartphone users downloading more apps than six months ago, mobile applications may soon replace browsers as the main gateway to the web for mobile phone users.

To read the full GfK NOP Technology report click here

Services drive the iPhone’s success not features

Apple is a leading force in the smartphone market because they simplify services and enable people to fit their world in their pocket.

Yesterday, Steve Jobs announced the latest iPhone 4 at WWDC but what struck me was the way he structured his presentation. Jobs focused early on about the success of the App Store for both consumers and developers. There is now 225,000 apps available, 5 billion downloads and Apple has paid out $1 billion dollars to developers. Apple has created a vibrant market place for mobile apps and services with more big brands to launch later this year. That is success unrivalled by anyone.

To cover all this first was smart because Jobs was focusing on the services and the benefits of owning (or developing content for) an iPhone. After all the device features are becoming less important over time whereas services and content is increasingly driving consumer demand in the smartphone (as opposed to the feature phone) market.

Apple have understood this for years because nothing about the iPhone 4 is particularly new, multitasking, video calling, high resolution screens and cameras have been around for a while. Whilst other smartphone makers have focused on handset features Apple have focused on what the consumer can do with their phone. These are very different strategies and Apple has clearly chosen the right path.

The really clever thing that Apple does is the way they take old features, like multitasking, simplify them and re-package them as if they have just been invented for the first time. By making features like these easy to use, those who aren’t particularly tech savvy believe that Apple invented them. Apple did exactly this with Apps, they made them easily accessible, streamlined the purchase and installation process and most importantly made the content exciting and relevant. A recent tweet from Steve Jobs exemplifies this perfectly:

“No one used computers until Macintosh. No one listened to MP3 players until iPod. No one made video calls until iPhone 4″

However, unlike a few years ago, there are now many strong competitors to the iPhone. There are many Android based alternatives that offer tightly integrated services, varied apps and some argue better features. Nokia will be launching their revamped version of Symbian OS on the N8 and Microsoft will also be introducing Windows Phone 7 towards the end of 2010. Most importantly, however, the services are improving quickly and whilst they haven’t achieved the success of Apple’s App Store they are quickly gaining ground.

Despite all the buzz around the iPhone 4 not everyone can afford one. With many compelling alternatives at cheaper price points, Apple faces much stiffer competition than they have faced upon the launch of previous iPhones.

What do you think of the new iPhone 4? Will you be buying one?

Apple sell 2 million iPads but competition will be fierce in 2010

Expect to see a vibrant and competitive tablet PC market over the next 12 months as Apple sell 2 million iPads globally in less than 60 days.

Apple certainly knows how to get the media and public excited about their latest creation, the iPad. Everyone is talking about the iPad and tablet PCs and this is not just tech press but also mainstream news bulletins. Apple is extremely proficient at sparking people’s imagination around all the creative ways their products, iPhone and iPad, can be used. Apple’s famous strapline for the iPhone was “there’s an app for that” which creates a powerful perception that anything is possible, and the same applies on the iPad.

Whilst Apple have created an enormous buzz around tablet PCs and educated the market as to all the potential uses, competitors will be launching rival products to compete with Apple’s iPad. In the next 12 months we’ll see a plethora of tablet PCs launched from a number of different manufacturers, running a number of different operating systems, from Microsoft Windows to various open source based platforms such as Android and MeeGo (Intel and Nokia joint venture).

The tablet PC market will be a place where laptop manufacturers and smartphone providers really start to compete head to head. At the smartphone end of the market expect to see Nokia, Blackberry and HP (running newly acquired Palm OS) launch alternatives to the iPad. At the PC end of the market the first entrant will be the Dell Streak which will quickly follow the iPad launch in mid June. Asus and Lenovo also have tablet PCs in the pipeline, which will most likely be based on Windows 7. Google won’t be left behind and will launch either an Android or even a Chrome OS based tablet during the course of the year.

With all the different tablet PCs, consumers will be spoilt for choice. Looking at the main three operating systems, Apple mobile OS, Windows 7 and Android/Chrome OS, each company will take a slightly different approach which will add great variety for consumers. For example, Google will be pushing for more of a cloud-based solution, Apple will be heavily app and services based while Microsoft will be evolving their traditional Windows based platform that everyone is familiar with.

As tablet PCs become more popular the netbook market will take a further nosedive. In July 2009 the netbook market grew an astonishing 641% but in April 2010 it grew only 5%, a remarkable fall from grace.

So if netbooks fall victim to tablet PCs, who will benefit?

Well, the iPad was launched in the UK last Friday and today Apple announced that they have sold more than 2 million units globally. According to GfK NOP Technology research Apple are expected to sell up to 2 million 1^st generation iPads in the UK if they can meet high levels of early demand. The pricing of the iPad varies and is available as Wi-Fi only models as well as 3G devices from the major UK operators. Apple will almost certainly occupy the more premium end of the market, with competitor tablets likely to be more cost effective. However, price is not the only determining factor for success. The provider who can package up content and services that make tablets easy to use and relevant to the consumer will be the ones who come out on top.

Apple has proven credentials when it comes to delivering multi-media services and apps to their users. They’re not standing still either as Apple launched the iBookstore on the iPad which has already sold 1.5 million ebooks in the US. But even in the services market, competition is strong. Expect to see compelling service offerings from Google, Nokia, RIM (Blackberry) and HP Palm, all of which produce excellent hardware and are quickly improving their services and access to vibrant market places for 3^rd party apps.

If competitor tablets can get their service offerings right we can expect to see a very competitive and exciting tablet market in the next 12 months.

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.

NOTES

Photo courtesy of:

http://www.flickr.com/photos/johanl/ / CC BY 2.0

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

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.

Photo courtesy of:

http://www.flickr.com/photos/ousby/ / CC BY-NC 2.0

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.

NOTES

Photo courtesy of:
http://www.flickr.com/photos/spierisf/4344920695

The iPhone paves the way for a successful ‘tablet PC’ market

GfK NOP research shows that consumers familiar with the iPhone are much more interested in tablet PCs than the average UK consumer and, what’s more, they know exactly what they would use it for.

One of the hot topics at this year’s CES (Consumer Electronics Show) was tablet PCs. Microsoft showed off Windows 7 (multi-touch version) on an HP tablet and, despite Apple’s non-attendance, there was much hype around a potential ‘iPad’ (iSlate, iTablet?). Many believe that the hype will become a reality on 27 January when Apple hosts an event entitled ‘Come see our latest creation’.

What interests me most about tablet PCs is who would buy one and what they would do with it. Recent research*conducted by GfK NOP shows that interest levels in ‘tablet PCs’ for the average UK internet user are at moderate levels with 45% being somewhat or extremely interested. That may sound high, but with all research like this, sales never match intent. However, the most striking finding from this research is that levels of interest are significantly higher among iPhone users – at 75%.

Those Interested in Tablet PCs

Why such a big difference? Well, iPhone users will be familiar with features such as multi-touch screens, integrated multimedia services and, of course, the App Store. This, in itself, begins to reveal what consumers will use a tablet PC for. In a way it is obvious for an iPhone user that an iPad (let’s go with that name for now) would be a larger, more powerful iPhone, which would be a natural choice for web browsing and multimedia as well as being extremely customisable with apps. The research supports this view because of those interested in tablet PCs, 58% of iPhone users (41% UK average) said they would use it for an ‘enhanced’ web browsing experience and 75% of iPhone users (41% UK average) said they would use it as a portable multimedia player, two of the top answers.

However, web browsing and multimedia are standard features for PC, laptop or even netbook users, so will the introduction of the tablet PC enable new and different uses? Reading between the lines, Apple’s invite (pictured below), with the splashes of paint used in the imagery, might suggest that a future iPad will be a more effective platform for creative tasks. Over half of iPhone users interested in tablet PCs (51%) said they would use it for ‘mainly creative tasks like editing photos or drawing images’ compared to just 27% as a UK average. Although tasks like these are becoming more mainstream, the tablet PC, especially an Apple one, could accelerate that trend.

Potential effect of tablet PCs

For some time now, people have been calling for Apple to release a netbook, mainly because many wanted a portable Apple experience with web browsing and multimedia capabilities. In a way the iPhone has filled this void but a future iPad could take the experience one step further and, as we’ve seen, iPhone users agree. The obvious difference is that a netbook and a tablet PC will sit at different ends of the affordability scale. Apple’s products are always at the premium end of the market and are about delivering a simple and high performance user experience. A tablet PC has the potential to meet all of those criteria without devaluing their product pricing or risking customer satisfaction as they may have done with a netbook. With this is mind, I can now see why they resisted netbooks and waited for tablet PCs despite the prolific sales netbooks received over the past few years.

Whether tablet PCs will have an effect on netbook sales is hard to tell, especially as they will (almost definitely) be at least twice the price of a netbook. One risk Apple and other PC manufacturers might face is the cannibalisation of home laptop sales. Of those interested in tablet PCs, 60% of iPhone users (48% UK average) said they would use it to replace all the tasks of their home PC or laptop. This is not as unbelievable as it first sounds given that the majority of home internet users (58%) only use their PC for basic tasks like browsing the internet.**

It’s no wonder so many people are excited about the potential of a future iPad being announced later this week. Apple have an incredible knack at educating consumers about their new products before anyone has even seen what they look like. They did the same with the iPhone; Apple let the market speculate about what it would look like and what it would do before it was even announced. The success of the iPhone has sparked consumer interest in the iPad and the same seems to be happening again. For iPhone users in particular an iPad is simply a complimentary and natural evolution of the iPhone.

So, will the tablet become as common an item on the coffee table as a magazine or a book?… We’ll have to wait and see! Roll on 27 January!

NOTES ON THE RESEARCH

*1000 online interviews were conducted by GfK NOP among a UK representative sample of internet users.

** Ofcom report, UK broadband speeds 2009, Annex 6; GfK NOP Broadband Speeds, Full Report

Spotify fast gaining ground; Google dominates mapping; Facebook streets ahead in social networking

GfK NOP research reveals most popular online brands in communication, entertainment and information services

The ‘Connected Life’ study, which asked 2,000 UK internet users about their favourite services, found 60% of music users stream music directly from the internet. While iTunes still leads the direct-streaming arena (17%), Spotify is coming up at a close second, with 12%. Looking at all digital music users (not just direct streamers), 11% of these have used Spotify, making this fourth most popular digital music service, behind the more established Real Player (13%), Amazon (24%) and ITunes (50%). Another newcomer, Last.FM, also fares well with seven per cent having used the service; ahead of two of the pioneers of digital music mp3.com (5%) and Napster (4%).

Babita Earle, Divisional Director at GfK Technology comments:

“We’re finding that, while a few big, well-established brands tend to dominate, there are several newer services fast gaining ground and gaining market share. In all these online markets, where take-up of competitors’ services can rocket up exponentially through positive word of mouth on blogs and social networks, the big players will be keeping careful watch on these fast-moving, smaller challengers.”

Mapping and navigation is dominated by Google Maps, with 72% of those questioned having used the service. The AA follows with 40%, shortly ahead of Multimap (35%). No other brand scores in double digits – with Mapquest (7%), MSN Maps (4%), Yahoo Maps (4%) and Streetmap (3%) making up the rest of the top eight respectively.

While the dominance of Facebook in social networking is of little surprise, the extent of its popularity perhaps is. Almost three quarters (74%) of those questioned use Facebook as their main provider; with next in the list Myspace and Twitter scoring just 4% each. Bebo follows, with 2%, while a scattering of less popular networks each score 1% usage, or less, as the main provider.

Popularity in the Instant Messaging sector makes interesting reading – with the second favourite being via a social media network (16%); pointing to an increase in usage of IM as a result of the rise in social networking. MSN dominates the sector with 50% using them as their main provider, with Yahoo (8%) in third; followed by Skype (6%), AIM (5%) and Google Talk (2%).

MSN Hotmail’s long established lead in email remains strong – scoring 33% usage amongst those questioned. Yahoo (14%) follows in popularity; ahead of via media provider (10%) and via social network (6%). Google’s Gmail service records just 6% usage.

The Voice Over IP sector is topped by Skype – recording 60% usage – significantly ahead of its nearest rival Google Talk (13%). Just two other providers score more than 1% – VoIP.com and Gizmo, both with 3%.

Finally, pioneer Miniclip.com shares top spot in gaming with MSN Games – both recording 17% usage. Yahoo Games and Amazon follow (both with 15%); ahead of Addicting Games (10%) and ITunes (9%).

For more information about the Connected Life study please click here.

GfK TechTalk

Independent technology research and opinion

Mobile data allowance grows in importance among smartphone owners

Exciting Opportunities for Mobile 3D?

UK mobile app culture shows no sign of abating

Services drive the iPhone’s success not features

Apple sell 2 million iPads but competition will be fierce in 2010

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

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

Apple Apps Store leads for mobile but market still open

The iPhone paves the way for a successful ‘tablet PC’ market

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