Mobility Redefined (circa 2008)
The following was published in January 2008:
Throughout the history of the consumer technology industry, the home has remained the hub for content. Today, households consume 75 percent of their total video content while at home. Even portable devices aren’t straying far. With 66 percent of consumers using their portable MP3 players and digital media players in the home, more consumers are using their portable players there than anywhere else.
But consumer interests are changing. Consumers are becoming increasingly comfortable with the portable and mobile environment and they are mixing more content into their mobile experience. For example, while few consumers are currently watching television content on their portable devices, 38 percent indicate an interest to do so in the future.
Mobility is at an important crossroads of transition. A confluence of innovation and change is framing tomorrow’s opportunities. Fueling these opportunities is strong growth and consumer demand. For example, CEA expects smartphone sales to consumers to grow over 30 percent in 2008.
Service providers and network operators are also incentivized to create new opportunities for the consumer. Year-over-year growth of consumer spending on fixed telephony has declined on average four percent per year since 2000 – after growing on average five percent year-on-year prior to 2000. Consumer spending on mobile telephony is now slowing and services providers will increasingly look for new revenue streams and ways to strengthen this important segment. There is certainly opportunity. Estimates suggest data makes up only ten to 15 percent of average revenue per user.
Service providers are opening up their networks to new devices, which can lead to retail opportunities. While today’s mobile experience is largely driven by always-on connectivity to the network, the consumer experience of tomorrow could be quite different. As content becomes more important in the mobile context, always-on connectivity is less meaningful as long as the content is up-to-date or easily updatable.
Location-based services and Hyper Local offerings are emerging to give the consumer a completely new and unique mobile experience. Most importantly, consumers appear interested in these new offerings.
Thirty-three percent of consumers are interested in a mobile phone with GPS capabilities. A growing interest in integrated GPS functionality will drive a range of services and offerings. For example, 47 percent of consumers are interested in being able to use a GPS device to find services that are near them, such as restaurants or gas stations.
Content becomes king when consumers can readily access information on the go. Consumers recognize that this access empowers them. One in four consumers are interesting in being able to use their mobile web-enabled devices to research shopping options while they are in brick-and-mortar store locations.
This empowerment can strengthen the in-store experience for consumers, but it also means multi-channel becomes ever important for retailers, service providers and manufacturers. Retailers, service providers, and manufacturers must ensure information is consistent across channels to take advantage of increased web-enabled devices while shopping in physical stores.
How service providers, network operators, and content owners monetize these new opportunities remains uncertain. Will consumers pay more for increased access and content on the go? Consumer willingness to acquire mobile content like television or movies through subscription services is still uncertain. But to what extent will they endure commercials and advertisements?
Access to on-the-go information is valuable: consumers will increasingly be able to make reservations moments before they enter the restaurant, buy concert tickets as they approach the venue and find restrooms in foreign cities. But are consumers willing to pay for this increased flexibility and, if so, how much?
While some of the specifics surrounding the opportunities in the mobile environment are uncertain, it is clear the mobile experience will continue to transform and be redefined.