Research Notes

Nokia, Ericsson, Motorola and Siemens must tread warily when planning new marketing campaigns

The major mobile terminal manufactures are in a bit of a dilemma.
On the one hand they must satisfy their own stockholders by making their businesses profitable but at the same time, it is very important that they do not raise the hopes of mobile consumers by e.g. fancy advertising containing peeks in to a mobile future that is not actually available today.

While the mobile operators are working out how to change the behaviour patterns of mobile consumers, so that they will be spending more and more money in the coming years on mobile services – on top of their voice traffic, the marketing departments of the terminal manufactures are facing multiple challenges:

·They must market their new mobile terminals to achieve maximum sales
·They must differentiate their products to the competitors
·They must sell off old 2G terminals to lower stock
·They ought to also take into consideration the status and strategies of the mobile operators

It is the last point – the status and strategies of the operators – that is not always on top of the list – in fact one wonders whether it has been on the list at all! In fact, it should be at the top of the list, simply because it is no use selling mobile phones packed with features, if the mobile operators are not ready to offer services and support for those features to their customers.

This – and many other challenges and prerequisites for achieving a smooth transition into the 2.5G and 3G market in the coming years are explained in detail in Strand Consults new report “How to make money on mobile services” a picture of the current & future Market for Mobile Services in Europe and as the report points out, there is little room for mistakes like the disastrous launch of WAP in the late 90’s, as many mobile operators simply do not have enough financial reserves today to survive to many setbacks.

Unfortunately, the manufactures are still pushing mobile phone features, rather than working with the operators as to what those features can be used for – thereby creating a demand for the new terminals.

This is already the case with MMS. MMS is already getting quite a lot of hype and is being advertised for with new mobile phones, some sporting cameras so you can attach a photo to your MMS message. But there are still so many unsolved issues with MMS – DRM (digital rights management systems) MMSC (interconnection so that MMS messages can be sent between different mobile operators) Pricing (still vast differences in pricing policies from different operators) and so on – that the mobile consumers who currently have an MMS enabled phone will have to hope that the person receiving their message can find an Internet browser nearby – as that will be the only way the receiver can view the message – which is not exactly “Instant messaging”!

In other words the major manufactures like Nokia and Ericsson ought to be working even more closely with the mobile operators – differentiating their marketing efforts in different territories to ensure that they are being consistent with how far the operators have got with their rollout of new technologies. Together, the operators and manufactures should be looking at a marketing strategy based on a “what’s in it for me – the consumer?” rather than a “this phone has GPRS, MMS, EMS Bluetooth, Java and 5 Mb of memory” – when most mobile users have absolutely no idea what they can use all that technology for and therefore reason that they have no need to change mobile phones now!

Another good example is Nokia’s television/cinema advertisement with a girl riding in a bus watching what appears to be a streaming movie on her Nokia mobile phone! While it is actually possible on a smartphone to watch a video clip that you have downloaded, it does not look like a smartphone featured in the advertisement and streaming video available to the mass market is a 3G scenario and still around 3 – 5 years off! So Nokia are advertising a “peek into the future” – another thing that the advertisement doesn’t actually mention – while the operators are still figuring out how to market GPRS and are struggling to find a pricing structure and content that will help mobile consumers work out why they should want a GPRS terminal in the first place. What if mobile consumers rush into the shops and want to buy the mobile phone from the Nokia ad – that would beat WAP hands down in disappointing customers!

Nokia has recently announced a new department that will focus on helping
operators locally by adapting Nokia’s marketing to the local conditions – instead
of just pushing old 2G terminals in vast quantities into the market – to get rid of old stock – absolutely a move in the right direction.

As is explained in detail in Strand Consult’s report “How to make money on mobile services” a picture of the current & future Market for Mobile Services in Europe, how well the transition to 2.5G and 3G actually goes in Europe is not really up to the mobile consumers, but amongst other things, up to how well the mobile operators and handset manufactures can coordinate their marketing strategies and understand, adapt to and ultimately influence the mobile consumers behaviour.
More information on the report

Contact us to get a copy of the report

Request the report