Mobile » GfK TechTalk

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.

Connected Kids: the future generation of mobile owners

Mobile phone users under the age of 16 are extremely sophisticated, with deep brand experiences and preferences. This raises significant questions for network operators, handset manufacturers and service providers regarding how best to engage an increasingly important market segment.

You could be forgiven for a sense of déjà vu. After all, rising mobile phone use amongst children is not a new phenomenon. As long ago as 2004 the Guardian was reporting growth in ownership amongst under-10s, [1] and media coverage concerning potential health concerns can be traced back even further. However, our ever-increasing reliance on, and immersion in, mobile phones and the digital services we use them to access, justify revisiting the topic.

Recent data from GfK reinforces just how prevalent mobile ownership amongst under-16s has become (2.5 million 12-15 year olds, almost 9 in 10, now have one). Furthermore, this is the age group cementing the shift in behaviour from passive entertainment, such as television, to more active digital and online activities. [2] As such, it should come as no surprise that the value placed on their mobiles increases accordingly.

It would be easy to assume these younger consumers are neophytes, new to the category with few preconceptions. Not the case. While 12-15s may be the first to acknowledge the importance of the technology, many of them are the same children the Guardian was reporting on five or more years ago. Instead, as many as 85% of those acquiring a phone are already on (at least) their second handset, and already hold the assortment of brand perceptions that follow this prolonged involvement in the category.[3]

As established users, with a penchant for advanced features and functions (camera, music, and games usage are all high, alongside social networking, IM, and email), it comes as no surprise that entry-level handsets have limited appeal. While the majority (70%) of phones in this age group are being gifted, three-quarters (74%) of users were involved in the selection process, with medium and high-end handsets flourishing and above average spending. [3] Unsurprisingly therefore, style and functionality will be key to handset manufacturers, for whom it will be necessary to attract the end-user as much as the purchaser.

The scenario facing operators is less clear. Selection of network and tariff, nominally a decision of less outward importance to younger consumers, remain primarily the domain of the purchaser (in contrast to handset, just 49% and 45% of 12-15 year olds influenced the choice of network/tariff respectively). How then, do operators approach these consumers? Given their focus on handset, clearly an appropriate and desirable range is a prerequisite. Beyond this however, high levels of gifting and relatively low interest in network/tariff imply it’s the gifter, as much as the end-user, who needs to be won over.

Mary Robinson at GfK Telecoms Research Panels highlights the importance of the under-16 market for network operators:

“Recent GfK findings for contract phones show that 83% of adults replacing their mobile chose to remain on the same network as before. With such high levels of loyalty in the adult market, the product propositions and brand experiences of the under-16s become massively important. Ignore them at your peril.”

Ultimately, when this generation hits adulthood and consumption becomes self-sustained, they will already be sophisticated mobile users consuming a range of services and content. Harnessing their demand will be a key revenue stream in the future mobile marketplace, and the brand preferences already developing will play a significant role.

For handset manufacturers, operators and service providers, the prize is a significant one.

For more information on the under 16 telecoms market please click here

[1] http://www.guardian.co.uk/technology/2004/apr/28/mobilephones.uknews

[2] http://www.statistics.gov.uk/cci/nugget.asp?id=2199

[3] GfK Research Panels: Kids Mobile Phone Market Report Q110

PHOTO COURTESY OF:

http://www.flickr.com/photos/uberculture

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?

The Green Technology Revolution

Smartphone technology paves the way for the market to adopt greener approaches. Encouraging greater use of mobile services helps to limit the need for multiple devices, extend the product lifecycle and offer consumers more ways of being green.

“Technology companies can never be green”. A casual comment dropped into conversation when discussing the idea of ‘green technology’. Of course, ‘green technology’ already exists in the form of multi-million pound, global scale projects that help reclaim water, produce renewable energy and generally help meet global climate change targets. Green technology, as it stands, does not mean the ‘greening’ of technology.

Making technology a little greener would mean creating a shift in the way that technology products – consumer ones that is – are used and consumed. My argument is that the first steps to any greening of the consumer technology space would be lengthening the product lifecycle. Today, the very nature of the market tells a tale of rapid uptake and obsoleteness; parts break or newer, quicker, more innovative versions come along leaving many devices left for good old Mr. Landfill. Looking at the wider consumer landscape, which is successfully adopting greener behaviour, it seems like the right time for technology to adapt.

Recent data from a GfK NOP Technology survey amongst a representative sample of UK adults* which asked about attitudes towards everyday technology products like MP3s, PCs and mobile phones revealed that obsoleteness is not a desirable feature. When it comes to mobile phones specifically, more than half (56%) say that they are more interested in keeping their device for longer. This offers an opportunity for the rapidly growing mobile services industry. More on this later.

The finding is reflective of wider concerns about the environment and suggests a growing demand for a greener technology market. In particular, 41% of consumers want to know more about what their mobile phone brand or network is doing to be more green in order to help make decisions about future purchases. Consumers now have more choices than ever before to help ‘being green’ more easy, but whether technology products can add to the offering remains to be seen.

Enter the smartphone, which according to Gartner, Inc saw sales growth of 48.7% across the global market in the first quarter of 2010. Smartphones bring mobile services to the lives of consumers which Mobile Marketer estimate will be worth $1 trillion by 2013. Services available through smartphone technology are already a valuable commodity for global technology companies including Apple, Microsoft, Google and Nokia who, despite raging patent war,s are rolling apps, music, messaging, maps and other everyday ‘services’ the mass market might desire over 3G and wireless networks.

The benefits of mobile services extend beyond helping consumers rely more on their mobile phones. In particular, our research reveals that 40% of consumers are more interested in updating the services they use on their mobile phone than the device itself. This figure is not only music to the ears of software developers, network providers and mobile manufacturers who are diversifying into this services market, but also to consumers looking for more ways of being green. Services can extend the product lifecycle through satisfying a wide variety of consumer needs when it comes to technology. They can be updated and replaced regularly and help transform mobile devices into a highly personalised experience. Not only this, but due to the way that they bring a variety of functions together, e.g. camera, music player, clock, etc, they reduce the need for multiple technology devices. All of which contributes a ’greener’ technology market.

However, mobile services can not only help limit environmental impact of products, they also encourage and enable greener consumer behaviour and offer more choices for a greener lifestyle. Nokia, the world’s leading mobile manufacturer, is helping demonstrate how. Kirsi Sormunen, Vice President of Nokia Environmental Affairs, says that the company is continuously looking at “new ways in which mobile technology can contribute to sustainable development,” as well as “ inviting consumers to the journey towards sustainability.” To support this they have created a series of videos demonstrating and hinting at ways that using a mobile phone with internet access is yet another way of ‘being green’.

The videos show mobile phones helping us to help the environment through reducing travel, browsing the internet and carrying an all-in-one device. Nokia is not new to the move to making technology more green. The company came top in Greenpeace’s guide to consumer electronics earlier in the year. Their progression from making the manufacture of handsets more green to making the relationship between consumers and their devices more green, is an encouraging move for the technology market.

With the rapid uptake of smartphones, according to Gartner Inc figures, 54.3 million units globally are already helping people use their mobile phones to access the internet and services, limiting the need for multiple and separate devices. A green revolution in consumer technology has already begun, particularly where consumers want to keep their mobile devices for longer. Despite the global giants of Google and Apple being the pioneers of smartphone technology, it is companies like Nokia who have already realised the environmental benefits of mobile services who are paving the way for the greening of technology.

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

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.

NOTES

Photo courtesy of:

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

We7 and Mopay team up: Music to environmentalist’s ears

Despite the continuing efforts of manufacturers, it seems that we the consumer are still not recycling our old mobile phones. Research by GfK NOP way back in 2007 first highlighted the problem of consumer lethargy but since then recent reports suggest there has been little improvement since.

An article by Telephony online for example, bemoans that:

“when a mobile phone reaches its end of life or, more likely, a consumer opts to upgrade, the three most common places for it to end up are a landfill, an incinerator or the consumer’s desk drawer. Nokia’s own studies find that only about 3% of consumers are recycling their handsets today …there could be as many as one billion sitting in desks, consumers aren’t spending the time or effort to seek out a recycling program.”

However, a collaboration between digital music website We7 and mobile recyclers Mopay may have identified a workable solution: Namely not relying on flaky consumer consciences and providing attractive incentives instead. We7 and Mopay’s new scheme enables visitors to mopay to swap unwanted phones for high quality MP3 files from We7’s download store to transfer to computers and portable music devices. With some mobiles worth in excess of £180, users can apparently turn the value of their old mobile phone into well over 200 downloads or around 30 albums. (Also, since We7 works in a similar vein to Spotify via ad-funded streaming, you will be able to listen to the music as much as you want for free before selecting the tracks to take with you.)

Now, this certainly sounds more appealing than hanging onto the 4 defunct handsets currently sitting in my bedside cabinet, ‘just in case of an emergency’… it will be interesting to see if it works.

GfK TechTalk

Independent technology research and opinion

Mobile data allowance grows in importance among smartphone owners

Connected Kids: the future generation of mobile owners

Services drive the iPhone’s success not features

The Green Technology Revolution

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

Apple Apps Store leads for mobile but market still open

Mobile advertising continues to build

We7 and Mopay team up: Music to environmentalist’s ears

Recent Posts

Sister Sites

Links

Subjects

Archive

Tag Cloud

Users Online