According to a little piece of research, we might all have been wrong: it is not that owners of feature phones (the embellishing term for the “not so smart” phones) do not want content, they do, or at least “over” 90% of them do.
The report said they found “strong interest” in apps with VoIP, IM and navigation leading the pack. Now, is this Apple’s ads (“there’s an app for that”) having an impact? Or did these people want that stuff all along and just could not get it? To be clear: there have been VoIP solutions for a while (depending on the carrier of course: Vodafone and T-Mobile Germany weren’t too keen but 3 UK has a specific Skype phone out), there are dozens of mobile IM clients. And when it comes to maps, well, GPS beats triangulation any day and a lot of carriers have traditionally been, erm, cautious with allowing application providers to access network data.
It is striking that the most sought after apps are those that – anecdotally – a lot of smartphone owners use regularly, and also that most of these come for free (to the user). So is it the aspirational look at the guy with the posher phone who gets stuff for free? I wonder…
Nokia’s “Comes With Music” service (unlimited downloads of 4m+ music tracks), which you get when you buy a phone, had been announced with much fanfare but it went a bit quiet after that. Now “early results” from the service show that it is mothers appear to be amongst the leading adopters, according to a Nokia executive. Unfortunately, that seems to be amongst the few bits of information they would let out into the public, the only other one being fairly obvious: recommendation is a driver (did they consult Amazon?) and chart coverage matters (Popularity matters? What?).
It must be truly bleak: even the best friend of every young telecoms entrepreneur on the fundraising trail whose reports rarely failed to feature as a footnote in an investment memorandum for the next big digital thing now sounds a word of caution. Juniper (whose reports I still cannot afford) issued its latest report on mobile gaming and it actually reduces (for the first time, I’m sure, even if I haven’t checked) its prior predictions on the growth and size of the sector in the next, erm, 20 years…
We will all remember that ad-supported content was the flavour of the month a short while ago. There were successful trials and a lot of hype all around, hell, there are even MVNO based on this model. Now, however, there is a survey that suggests that people will pay to avoid ads (if you are a true believer, look at the end of this post though…). Who’s right then?
While the vast majority (56%) believes that content downloads to mobile phones should be free of charge, there is a growing number of consumers that are so averse to advertising that they are now willing to pay a premium in order to avoid it, signifying a shift in how operators need to be tailoring their offering. A substantial 25% of respondents said that they would rather pay for a download if it guarantees them immunity from advertising.Now, what then? Free content? And who is paying us poor sods who produce it? Hmm. Now, it gets even more confusing: according to the study, in particular the younger demographic shuns ads. 35% of the 16-24 year-olds would rather pay than get ads vs. only 17% of the (presumably battle-hardened and more cynical) 35-44 year-olds; one would have thought so that the elders with their higher spending power were more likely to pay… Hmm, hmm.
One symptom of this trend is the increased resistance to targeted advertising on mobile phones. Whilst 47% of people feel that adverts tailored to their individual tastes and interests are a good idea overall, half of those who were willing to receive targeted ads on the internet were not happy to receive them on their mobiles.
Follo
wing the iTunes success story, we could see it coming, I guess, and indeed after a mere 3 months of going live the mother of all black turtlenecks informs us that the Apple App Store rocketed past 100m downloads for iPhone and iPod. Impressive numbers! And another example how simplicity and a good eye for ease of use wins the day: put applications (games are apparently leading the pack, too, with no less than 700 of them [that's nearly 25% of the total available]!) into one place where a) people can find them and b) it is easy to download, install and run them, and you are on to a winner (operators, listen to this!).
- There are 3,000 apps on the App Store, 600 of which are for free. Now, for what percentage of downloads these 20% are responsible for, we are not being told though…
- 90% of the apps are priced at less than $10 (this will include the 20% free ones, I guess). However nothing is said if it is $9.99 that is the prevalent price point or perhaps $0.99 a pop.
The App Store certainly is a success for Apple (in particular considering the relatively low number of devices that access the store, and this deserves our unreserved applause! The only thing is: it might just be that 90% of the downloads were of the unpaid kind and another 8% of the less-than-$3.00 kind, and that would mean that it is actually not such a great success for the developers hoping to make a buck from it (rather than only showing off the funky logo on investor presentations).
According to a report, mobile content is moving off-deck. The consumer survey (presumably for the US market only) found out that today’s consumers use a mix of sources for their mobile content, namely the web, side-loading (called “their own collections”) and the carriers.
When it comes to watching video on their phone, 35% of the consumers would choose YouTube vs 31% who would go for the carrier’s own offering and 28% who side-load.
For music, side-loading leads overall with 48% of the total followed by 35% who bought off the carrier deck.
With games, the situation is yet different: 60% of consumers would only play the games that are pre-installed on their phones.
The report expects this diversification of content sources for mobile phones to increase, which sounds reasonable: just look at what Thumbplay does in the US or Jamba and Zed in Europe! Check out Nokia‘s Ovi initiative (including “Comes with Music“) or Sony Ericsson‘s PlayNow Arena. Falling walled gardens and a general move to flat-rate data will contribute to consumers looking for alternative shop fronts, in particular as carriers have not always shown to be the best retailers out there – at least not for content… No big surprises then.
Following their relatively recent announcement of a multimedia initiative, Nokia reports a big win with Vodafone having agreed to carry their Ovi platform on Nokia devices that are distributed through the operator. Ovi, which is Finnish for door, was to be Nokia’s next big push towards becoming a multimedia company. One of its flagships under that umbrella, the Nokia Music Store, will now run alongside Vodafone’s own music service.
Nokia’s risk with the introduction of Ovi was that operators would reject having the Ovi links on the phones that they were distributing (not uncommon for them to do), so to have the “world’s largest operator by revenue” amongst their ranks is no small feat. Otherwise, Nokia would have seen limited distribution in markets where handset prices are subsidised by carriers, which is true in most!
With Nokia having bolstered its portfolio of offerings in recent months even more (the acquisition of Navteq being the biggest one), this opens the pipeline to a much richer content experience, and this is what might have pursuaded the good folks at Vodafone: with carriers struggling to come to terms on the “right” treatment of content to maximise sales and user experience, a door to a fully-packed store of content and applications must sound tempting.
It might actually mark a turn in the market: could it become the handset manufacturers who will take the lead in the content space and become the funnel through which content providers feed their wares to the consumer? It would make sense in that it is arguably easier for an OEM to ensure that there is optimal performance for a product on a device (after all, they manufacture the device). Such a model would bring relief to the operators who would continue to control the billing relationship with the consumer and hence alleviate fears of removing that bond but they would be a big step closer to becoming the dreaded bit pipe as had happened to ISP on the Internet. I have argued before that this process would – in any event – take longer, so that might alleviate fears.
It is breaking into the control-driven model of operators, and that is a significant development in itself. Nothing will of course change for the content providers, at least not in the short term: it is just that they need to ring a different doorbell now (or rather an additional one…).
