COMMENT
Brisk smart phone sales don't automatically mean big data revenues for the mobile operators, says Jo Best. Here's what they'll have to do to start raking in the dough...
Happy New Year! Maybe you got a new mobile for Christmas? Chances are it may well have been a smart phone. There's some nice ones out there.According to a recent report from NPD, smart phone sales in the US are going up. So far, so predictable. Depending on who you listen to and by what criteria you judge a smart phone, there were nearly 19 million shipped in the second quarter of last year, according to market watchers Canalys.
Granted, it's not much compared to the 229 million phones sold overall across the globe during the same period (stats courtesy of analysts Gartner) but such figures always lead to discussion of wireless data. And they will here too.
Voice revenues are falling. Operators are hoping data could come in to pick up some of the slack. So will the boom in smart phones mean a parallel boost to wireless data revenues, as consumers and enterprises alike start picking up devices with all sorts of new functionality?
It's a possibility.
A report from market studiers NPD found Americans with smart phones tended to spend more on data services than those with 'normal' phones - $6.31 per month for wireless data, on average, in the period the analysts looked at, compared to just $0.89 for those with non-smart (dumb?) phones. While NPD only tracks US figures, Blighty is likely to be following the same trend.
The bottom line then is: more smart phones, more data revenue. Cue chink of champagne glasses at the operator. But hold on a second. It may be time to turn the telescope around and take a look at the type of smart phones people are buying.
They're not the usual models by any means. Historically, US smart phone buyers are very keen on their Treos but according to NPD, the top selling smart device for the latter half of the year was the Motorola Q.
You might remember (or you might not, given Motorola hasn't seen fit to launch the Q over here yet) that Motorola has not pitched the device as a business tool - rather it's a sort of top-end device for 'prosumers' (please excuse the clunky neologism). The rest of the devices in NPD's top five are very much solid business staples however - Treos, BlackBerrys and so on.
Does that mean the Q marks the advent of a non-enterprise audience for this type of enterprise-centric device? I'd be very surprised if Motorola's marketing has convinced that many average Joe smart phone shoppers to abandon traditional allegiances and go business.
Rather I'd imagine the Q's more for those one-man band businesses, looking for a work device, or for traditional corporate users who fancy something a bit more showy to leave on a pub table when they're having a beer with colleagues.
Despite the prevalence of so many business-focused devices, it seems the rise in smart phone sales is attributed to consumers rather than enterprises buying the devices. If that's the case, then the operators and phone makers are missing a trick. Devices such as BlackBerrys and Qs are designed for mobile emailers, while consumers are apparently more interested in upcoming applications such as location-based services (LBS) rather than email.
Smart phone makers may be shifting units but they still need to smarten up the way devices are designed to boost data usage. They must focus more on optimising them for emerging consumer and prosumer trends, making LBS an integral and easy to use part of the device, for example.
Usability, simplicity and publicity of both services and the smart phones themselves will be key in winning over consumers. If the industry continues plodding down the Qwerty keyboard/mobile email route, it won't be long before the data bonanza dries up.
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1. Simon
The networks need to take a long hard look at their tariffs. Waaay back when you got charged 50p/min, and were charged the whole minute as soon as the callee answered, people would use their mobile when they had to. The idea of using a mobile when there's a landline to hand would have been laughable !
As things have become cheaper, the market has taken off. Now kids (of all ages !) will use a mobile to chat with someone in the next room, text has become a staple of kids lives, and few even think about the cost. Overall, the networks will be getting much larger revenues, though at a lower margin. What won't have gone up in line with subscriber numbers is the cost of running a network - yes some things will cost more, but large parts of the country are serviced by underused cells that have to be there whether you have 10 or 10 million customers.
Data COULD be the same. Yes the networks will have to spend on the infrastructure - but lets face it, much of it is already there anyway and the costs don't actually scale up all that much as useage increases.
I use GPRS, but I certainly don't use it if I don't have to. Whenever I am about to fire up a mobile data session I stop and think it it's neccessary. That's what happens when you rip off your customers for umpteen quid/megabyte !
Make a sensibly priced data addon and I'll sign up for it - so increased monthly consistent revenue for the operator. Yes I'll use more data, and it will cost the network a bit more to carry it - but overall they'll make more profit.
Unfortunately, at present the only sensibly priced data addons are available on overpriced base tariffs. So put that down as one shot fired, one hole in foot !