Scott Ellison on Driving Mobile Data
Monday, August 24th, 2009As part of our ongoing guest perspective Q&A series, we recently spoke with Scott Ellison, vice president of Mobile & Wireless at IDC, to get his thoughts on the current mobile data trends that are shaping the telecommunications market.
It’s the “Apple effect” - a focus on providing a great - not just an okay - mobile experience, for both users and application developers. Apple has set the gold standard for both and gives competitors something that they need to come close to matching. I started in mobile 20 years ago almost right out of college, and I can tell you there is very little original thinking in anything Apple has done in mobile. What Jobs and company have done is put the right ideas together in exceptionally compelling ways for both users and developers. The role of Apple’s marketing can never be under-estimated with its simple “how to” TV spots that double as tutorials. The mobile industry has been different from the day Steve Jobs first held up an iPhone at MacWorld in January 2007 and Apple has been forcing the entire industry to up its game when it comes to mobile ever since. 2) With over 1 billion mobile apps downloaded over the past year, it’s clear that the mobile applications market has transformed the way consumers access and consume data. How has this changed the mobile industry from a consumer perspective?
From a consumer perspective, mobile can now literally do anything - if you have an iPhone. That is why sales remain so strong for a device that is, in mobile terms, kind of old, frankly. Mobile devices are kind of like dogs in that they “age” at least 7 times faster, so the iPhone is heading to college already. Apple has repeatedly shown that mobile can change in the blink of an eye and that consumers are open to doing new things - but not with just any device. Success in mobile consumer data is dependent on offering sophisticated devices that are exceptionally easy to use, are supported by vibrant application developer communities that churn out interesting apps with strong mobile-PC integration, and have stellar marketing support. No company in any part of the mobile value chain other than Apple has been able to simultaneously hit all criteria, and if I was grading on a curve, I would give most companies no more than a “B-” on any two and probably “Cs” on the rest. I believe this is why so much of consumers’ excitement with mobile is still largely associated with the iPhone. 3) You recently wrote a report on the impact Apple’s iPhone 3G S has made in the mobile applications market. What do you believe is the most significant impact the iPhone has made in this market, and what lessons can operators learn from Apple’s success?
Apple has shown that customers respond to brands that provide great experiences with their hearts, minds and wallets - even during a brutal recession. People have less disposable income but are choosing to spend even more of it with Apple, and that is what a great brand experience can do. At Apple, even the engineers talk about the importance of the customer experience with the Apple brand. The mobile customer experience is about how the average user experiences the product and not how those steeped in mobile operations think the experience should be. Mobile operators have always had the ability to offer a better, more relevant experience to their users - they have server farms of customer behavior information literally sitting there which are used for little more than generating bills. Operators are afraid of being dumb pipes - so my message to them is: stop being one. Smart pipes are a completely different story, and that is where mobile operators need to head. Smart pipes offering customized and more deeply relevant experiences for their end users are the future for mobile operators. And if that sounds “creepy”, I have a six letter response: G-O-O-G-L-E — and who wouldn’t want their market cap?
4) With data revenues from text messaging flattening out and average voice revenues on the decline, increasing mobile data consumption has become a critical requirement for filling the gap and fueling new growth. What can operators do today to drive new revenue streams through the mobile applications market?
They can start by building better networks with more bandwidth and better coverage - and I’ll call out Verizon Wireless as the poster child for building what is, on the whole, a great network. As for new revenue streams, I remain convinced that the single biggest opportunity is still mobile TV - which is on-demand and integrated with contextual advertising and social networking, among other functions. TV that is more than just mobilized TV but “mobile TV” - where you can watch any show, any time, any place. Where you can watch the same show with other people in different geographies and share comments. Where you can find out where to buy the clothing a character wore and have a map offered immediately that will get you there. In the 1990s, we used to wonder whether we might get mobile users to use their phones more than 200 minutes a month, and these days it is closer to 1,000. In 2002, we wondered if Americans would ever use text messaging, and now we send over 100 billion text messages in a single month. In 2006, we wondered if consumers other than youth and young adults would ever use mobile applications, much less pay for them, and now millions of iPhones are bought every year with some eye-popping price plans. And now we have seen Apple’s app store go from zero to over a billion downloads in just 12 months, resetting the competitive landscape in only a couple of quarters. Mobile behavior and spending can change in the blink of an eye - the challenge is building an experience worthy of consumers’ time and money.
What would you like us to ask next? Feel free to leave a comment or send an email to sinfantino@bytemobile.com.
-Stacey Infantino
