Smartphone consumer and business trends in 2014

 

In this post we’ll be looking at how mobile trends are effecting customers, network operators and handset manufacturers. Last week, Analysys Mason reported “[t]he average amount of time that consumers spend using smartphones per day almost doubled between 2011 and 2013, from 98 minutes to 195 minutes”. The time spent actually communicating with other human beings has increased during this period, but only with overall growth in use. As a relative share of what other things consumers do with their smartphones, communication has actually fallen (see above image), from a 49% to 25% share. Retailers will be very happy to see that the “utilities and commerce” share seems to have grown considerably.

72% of those that Analysys Mason surveyed across the UK, US, France and Germany were said to be using OTT messaging services on their phone. These over the top services are posing a real threat to traditional operators. One particular example that caught Zeitgeist’s attention was that of FreedomPop in the US, a virtual network operator that uses Sprint’s network to piggyback off. According to GigaOm, the company has launched an iOS app, that assigns you a unique telephone number and allows you to run all your communications through a “virtual phone”, circumventing the carrier. The answer for carriers may be in bundling services, and indeed BT and Vodafone seem to leaning toward this as a tactic. But a Lex column article in the Financial Times warns that although bundling services into a quad-play offer can increase retention, it usually means offering those same services at a discount.

Cheap smartphones are nothing new in of themselves; competitors to Samsung and Apple have been scrounging away at the bottom of the market for some years now, and it was way back in 2012 at the Mobile World Congress that Mozilla announced it would make a cheap handset for developing economies. What has changed recently is the explosive growth at this end of the market. By 2018, more handsets will have been shipped that sell for under $200 than those that sell above that amount (see chart below), according to IDC and The Economist, who wrote about it recently. As the paper pointed out,

People buying their first smartphones today, perhaps to replace a basic handset, care less about the brand and more about price than the richer, keener types of a few years ago. They are likely to pay less for a nice new smartphone than they did for their shabby old device, because the cost of making smartphones has tumbled.

Part of the problem for incumbents is that they have had to do all the R&D, which new entrants can learn from and improve on without worrying about such fixed costs. For consumers though, with fragmentation at both ends of the market, the choice and price of smartphones has never been better.

PR own goals leave Germans feeling cold

As if their continued efforts to save the Euro weren’t giving them enough of a headache, recent German attempts to sell cars and excite football fans have also failed to hit the mark.

As any Englishman will tell you, the weather has a nasty habit of messing up the best laid plans. From BBQs to Wimbledon, the rain can be relied on to appear when it is least welcome. Similarly the winters of 2009 and 2010 were unusually harsh just when retailers most needed people to be able to get out and spend their money.

So while we applaud their innovative thinking we can also sympathise with German agency Sassenbach Advertising who have seen their clever weather themed idea turn into a icy nightmare.

Seeking a “wind and weatherproof idea” to support the launch of the new Mini Cooper Roadster, they took advantage of the “adopt-a-vortex” scheme run by Berlin’s Free University and named the current high pressure front sweeping across Europe ‘Cooper’.

All was going swimmingly until ‘Cooper‘ dropped to -33 Celsius, disrupted transport across the continent and claimed over 100 lives.

The campaign also involved buying a low front to be called ‘Minnie’ later in the year that one hopes will be less destructive.

A statement from BMW confirmed that while they had bought the names they didn’t have control over when they were used and that clearly, they regretted any loss of life.

While the whole episode has been highlighted as a bit of an gaffe, BMW and their agency haven’t done anything wrong and the €299 price tag for naming the weather seems cheap even though the publicity it has provoked isn’t what was planned.

The same can’t be said for German football giants Bayern Munich who upset their fans with an ill thought out launch of an app.

Last week, as the January transfer window was coming to a close, the club told their 2.7m Facebook fans that they had just signed a new striker who would be announced exclusively via a Facebook app in around an hour.

Naturally, the announcement set social networks alight. To set the scene, Bayern had recently lost to Borussia Mönchengladbach and seen target Marco Reus sign for rivals Borussia Dortmund.

As the clock ticked down, fans debated which star they’d be seeing at Allianz Arena with Manchester based duo Carlos Tevez and Dimitar Berbatov among the suggestions.

However when the announcement was made it became clear that the club had misjudged things enormously.

A live stream with Markus Hörwick (Comms Director),  Chrsitian Nerlinger (General Manager) and Philipp Lahm (Club Captain) announced that the new star player was actually the fan themselves, the 12th man of the squad.

The app then showed fake press announcements, mock interviews with star players welcoming the ‘new player’ and shirts with the users name.

What could have been a great value added experience resulted in a terrible user experience, compounded by the app crashing, with fans venting their anger on various social networks.

The press, who had also been kept in the dark showed great schadenfreude, gleefully spreading news of the failure which ended up trending worldwide on Twitter.

Within three hours the club had received over 5,000 complaints from angry fans and was forced to offer an apology.

Both brands will survive their difficult week. Mini because they didn’t do anything malicious and Bayern because disappointment is all part of being a football fan.

Let’s just hope their fiscal policies have better results.