Research Notes

Customers with the latest mobile phones are hungering for advanced services

The latest research Strand Consult has done, including interviews with both leading content providers and WASP’s (Wireless Application Service Providers) shows that mobile customers who have already invested in the latest multimedia mobile handsets are now starting to demand more advanced services.

This demand seems to be deriving from a number of factors:

-There are very few services available today that actually utilise all the features in the latest mobile handsets.

-Many content providers are still focusing on ringtones and logos – instead of moving forward

-Even before having tried an advanced service, customers are aware that their new handsets have more potential and want to try more advanced services.

-Customers have seen advertisements and read articles describing services already available elsewhere and are starting to wonder when they will be available in their country.

While these seem to be some of the main reasons, we believe some other factors are also playing a more subliminal role in this emerging push for new mobile services.

It is a fact today that there is literally no technology available on the market today that is not constantly undergoing some sort of evolution. Therefore consumers expect that when they purchase a new piece of e.g. electronics – that there will have been some sort of development and new features compared to the one they are replacing. If it is a digital camera it would boast more Megapixels, improved features, smaller size and so on. For many years, the primary evolution in mobile phones has been the size of the mobile phone and customers simply expected a new mobile phone to be somewhat smaller than the last one.

Today customers are aware that mobile phones are undergoing a paradigm shift and moving towards being multimedia terminals with many and varied capabilities depending on what type of user one is. The customers do not have to be engineers to see that the large colour screens, cameras and memory cards that many new mobile phones feature today – mean that the mobile phone is not just a phone anymore. But also Java games and polyphonic ring tones ring a bell (pardon the pun) with many consumers, that there are things happening in the mobile area at the moment – and it is not just about size anymore..

There is however a natural learning curve involved with these new mobile phones. Because they have so many new features, the natural place for customers to start is to learn the basic functions of their new phone – voice and SMS. Getting their phone book migrated on is for most people extremely important, as many people nowadays do not remember most phone numbers off by heart any more – but simply rely on their phone book in their mobile phone when they need to call.

But once the basics have been learnt, users start looking at what else they can do with their phones. Just like the early days with PC’s, where one had a friend round one evening to help set up a modem and Internet connection, because one was unsure of how to do it oneself, getting together with other users who have the same new model mobile phone is a great way of exchanging experiences and asking questions like “Have you tried this or that”.

The learning curve is a factor that the mobile operators have not properly taken into account up to now. There are two important factors that effect how long an average learning curve will be for a new owner of an advanced mobile phone:

·How good is the mobile operators support of the terminal?

·How many new advanced mobile services are available?

The general feedback we have received from products like UK operator 02’s XDA support is that there is actually little support. One user we talked said she had probably called 02 around 50 times in 8 weeks for help on configuration of her XDA – and still had unsolved issues. Good online help and a good manual can sometimes help, but as we all know, creating a good manual – and getting users to read and understand it is not always as simple as it sounds.

New advanced mobile services will often be the easiest way of accelerating the learning curve – simply because the content providers offering these services will often combine the services with extensive help to get the services running, as no content provider would want to invest money in creating new advanced services unless users started using them.

In Denmark the Danish Broadcasting Corporation are setting the standard for educating mobile users on how to use mobile services – both through their TV shows and on their Internet site – with extremely good results indeed across all customer age groups and not just young users. In fact, the Danish Broadcasting Corporation see it as part of their public service duty to help mobile users understand and be able to access and use mobile services.

As this learning curve will be exactly the same moving towards 3G services, there is absolutely no reason at all to stall the development and launch of new services to accelerate the learning curve.

In 2003, premium mobile services will generate revenue of over 6 billion Euros, of which 2.8 billion Euros will go directly to the content owners and mobile services creators. Over 1 billion of the 2.8 billion revenue that the content providers are looking at this year, will come from the more advanced technologies like MMS, Java and new WAP services. These figures have been based on the actual sales figures for mobile services in Europe for 2002, as published in Strand Consults latest report “How to make money on Mobile Services” and have been projected – country by country and service by service – across Europe up to the year 2005.

“How to make money on mobile services” is a comprehensive report about the development and value of all types of mobile services in 16 mobile markets in Europe from 2002 to 2005. The mobile services are split into type of service, network technology, service technology, country and each figure is also split up into the operators perspective and content providers perspective – not only giving a very clear picture country by country as to which types of services will have the most success on the different platforms and when it will happen – but also how big a share of the revenues from any given service in any country the content providers can expect.
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