Consumers are moving to the cloud, time for the music industry to follow

The shape and direction of the digital music industry can be hard to evaluate at the best of times. This week saw BSkyB give up on their Sky Songs service just a year after launching it [1], while Spotify continues to grow a paying subscriber base (albeit not yet to a level deemed profitable) [2]. Given these contrasting fortunes, it seems an appropriate time to revisit demand for streaming services, and see whether they’re any closer to establishing the mass-market audience the model relies on.

With growing smartphone and tablet ownership, and increasing connectivity of home stereo/entertainment systems, the notion of being always-on and seamlessly interacting across multiple devices is becoming a way of life for many consumers. Within this context, a service offering unlimited access to any song, artist, or label catalogue, across any internet-enabled device, can surely have never been a more enticing proposition?

A recent online study, to which we applied GfK’s truth index to help eliminate consumer overclaim, suggests that 14% of online adults in the UK would be likely to take up an unlimited service such as this. With consumers suggesting an average price of £6.22, the £4.99 (Unlimited) and £9.99 (Premium) Spotify offerings seem reasonably well positioned and, encouragingly in the face of recent hysteria about the ‘free’ generation, 16-24 year olds claim they are willing to pay the most.

Given these figures (and it’s fairly safe to assume interest will only increase as cloud computing goes mainstream) there is clearly money to be made; perhaps the more pertinent question is who will be making it? Certainly the distributors, Spotify in this case, will take a share (though the success of bundling internet and entertainment subscriptions in the current market suggests Sky and the other big players will be back, and Facebook and Google will certainly be watching on with interest), but what about the record labels?

In the past, the main contention of major labels has been that the new income from licensing catalogues to access-based services such as Spotify wouldn’t justify the threat of cannibalising their other revenue streams.

Our data suggests the extent of these fears is overblown; around two thirds (69%) of regular iTunes downloaders, for example, anticipate they would continue to buy music from Apple’s online store even if they were signed up to an unlimited streaming service (although, in all likelihood, this may stem from a more deep-rooted, habitual need to access music through offline devices; a trend we may not expect to hold up in the longer term)

Furthermore, differentiating revenue streams assures even greater protection for labels. Just 14% of physical music purchasers anticipate stopping if they signed up to a streaming service, and then there’s merchandising, licensing to television, film and video games, live, and an ever-increasing opportunity for additional ‘premium’ content (you only need to visit pledgemusic.com, a portal for musicians attempting to fund their own work, to get an idea of how many ways music can be monetised with a little creativity).

A significant level of consumer interest, willingness to pay, and a limited impact on other revenue streams should constitute a recipe for success, but if we’ve learnt anything from the evolution of the digital music industry it’s that the nut is a tough one to crack. The rates of return (to both artists and labels) from music streaming are unlikely to ever generate sufficient revenue to sustain the industry in its current shape. Successfully monetising an access model will require more than the revenue from streaming alone [4], but there will be no shortage of other opportunities to cash in on it (see @gleonhard for some ideas!)

Regardless, what we can be sure of is that the rate of change in consumer behaviour and expectation is not slowing, and finding a way to harness it, rather than hold it back, remains the best hope for an increasingly beleaguered industry.

[1] http://www.guardian.co.uk/media/2010/dec/06/bskyb-closes-sky-songs-music-service

[2] http://www.musicweek.com/story.asp?sectioncode=1&storycode=1043561&c=1

[3] Online research was conducted by GfK NOP among a sample of internet users in the UK (983). Fieldwork was conducted during November 2010.

[4] http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/

Photo credit: Matsuyuki (http://www.flickr.com/photos/matsuyuki/2097637858/)

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December 10, 2010 | Olly Robinson | Tags: , , , Mobile Services, , , , , | 2 Comments »

The smartphone market is there to be won… In 2011 the ‘mobile ecosystem’ will be critical to driving loyalty

Gone are the days consumers choose mobile phones based solely on their features and functions. New research by GfK[1] shows that smartphone owners in key global markets buy into the ‘experiences’ created by the mobile ecosystem and the majority (56%) are ‘keeping their options open’, when deciding their next smartphone purchase.

Every quarter brings new reports of rapid growth in smartphones sales but a key question left unanswered is what is actually driving purchase in the high end smartphone category? Understanding drivers of purchase is naturally a complex subject due to the sheer number of factors that influence consumer decision making. Looking back as little as 3 years ago, the primary focus for many consumers was acquiring a well designed phone packed with the latest technology such as Wi-Fi, GPS, high resolution camera and so on. In recent years, however, development in mobile hardware has slowed and is arguably becoming less important. Of course, consumers still want good looking handsets with the latest technology, but with so much choice and less differentiation the mobile handset is potentially becoming a more commoditised purchase.

The differentiating factor now, especially among buyers of smartphones, is the ‘experience’, the possibilities smartphones enable and the needs they satisfy.  As such, it is often more appropriate to talk about the attachment consumers place on their smartphones being a direct result of the experiences provided within a ‘mobile ecosystem’. An ‘ecosystem’ can be considered as a mobile operating system (OS) that is internet enabled, has integrated services, is easily customised with 3rd party applications and allows straightforward and instant access to content relevant to the end-user.

So, why is it so important to understand the intricacies behind smartphone purchase decision making?  Well, put simply, there is still huge potential for manufacturers to take market share:

  1. 37% of mobile phone owners in key global[2] markets are looking to upgrade to smartphones on their next upgrade cycle
  2. The majority of smartphone users (56% globally) are keeping their options open on their next upgrade with very few people declaring loyalty to their current smartphone ecosystem

With the rapid advances of smartphone ecosystems in 2010 it is not surprising that consumers remain open minded about which manufacturer they will opt for on their next mobile upgrade. Each mobile ecosystem continues to develop new services, announce high profile applications and broker exciting content partnerships.  Table 1 (below), shows the varying levels of purchase consideration among consumers using different smartphone ecosystems:

TABLE 1: SMARTPHONE OS AND ECOSYSTEM LOYALTY


Base: Smartphone owners in China, Germany, Brazil, UK, US and Spain (n=2653)

Only 1 in 4 global smartphone users stated they would stay loyal to their current mobile ecosystem with the majority (56%) wanting to keep their options open. Understandably, huge importance is being placed on the ecosystem of smartphones by manufacturers.

Recently, for example, Nokia have rebuilt Symbian and launched Symbian^3 on the N8, whilst Microsoft released Windows Phone 7 in a high profile campaign across a range of high-end devices. Previously, both Symbian and Windows Mobile have come under criticism (from some quarters) for providing a user experience that does not match the high standards set by competitors and for offering limited services and content. This is reflected in the relatively lower loyalty scores their respective ecosystems generate; Symbian (24%) and Windows Mobile (29%). In contrast, Apple, who have arguably led the way in the smartphone market in terms of user experience and service / content provision have very high levels (59%) of stated loyalty to the Apple Ecosystem. Nevertheless, despite this lead even Apple and Android users would consider other mobile ecosystems when it comes to upgrading their phone.

So, with so many consumers keeping their options open, which ecosystems are they currently considering? Overall and perhaps unsurprisingly, Table 2 (below) indicates that Apple (53%) and Android (51%) lead the way in consumer future purchase consideration.

TABLE 2: SMARTPHONE ECOSYSTEM PURCHASE CONSIDERATION

Base: Smartphone owners in China, Germany, Brazil, UK, US and Spain who were aware of smartphone OS listed (n=1516)

Clearly, the positive user ‘experience’ provided by Apple and Android ecosystems is having a positive impact on their current user base. 85% of Apple users would consider re-purchasing an Apple smartphone and similarly 84% of Android users would also consider an Android based Smartphone.

The story is different for other smartphone Ecosystems. Users of Nokia smartphones (running Symbian) are currently more likely to consider alternative mobile ecosystems with Apple, Android and Windows Phone 7 all strong contenders. RIM, although behind Apple and Google Android, is in a stronger position as the large majority of its current base will consider re-purchasing a Blackberry. The challenge for RIM in 2011 is to drive up purchase consideration among non-users and grow its market share.

Evidently, the multitude of options is ensuring that competition in the smartphone market is intensifying. Despite the challenges faced by Nokia and RIM in 2010, they both have some exciting developments in the pipeline which will make them increasingly attractive in 2011. For Nokia, Symbian^3 has major updates scheduled in Q1 2011 and the first iteration of MeeGo (not tested in this research) is due for release in early 2011. In addition, RIM has recently launched their new operating system, RIM OS6, and they are expanding their device portfolio with the introduction of a tablet PC.

So, what is going to influence choice of mobile ecosystem?

Table 3 (below), shows that in 2011 consumers will be looking for experiences which are interoperable across varied devices such as the smartphone, tablet PC and laptops.

TABLE 3: WHAT SMARTPHONE CONSUMERS WANT FROM THEIR ECOSYSTEM

Base: Smartphone owners in China, Germany, Brazil, UK, US and Spain (n=2653)

Tablet PCs running the same ecosystems as Apple and Android based smartphones have enabled consumers to evolve the mobile ‘experience’ and benefit from different form factors on different devices. It is this kind of cross device ‘experience’ that high-end smartphone consumers will be looking for from their mobile ecosystem in 2011.  Smartphone owners from all ecosystem providers ranked the ability to sync their smartphone ‘experience’ with other device form factors as the most important factor. RIM’s tablet PC ‘Playbook’ is due for release in the first half of 2011 and it is rumoured that Microsoft and Nokia (through MeeGo) will follow suit. If RIM, Microsoft and Nokia can create cross device integrated ‘experiences’ then consumers will sit up and take note.

The provision of apps, services and content will still play an important role in 2011. However, it is interesting to see how this has developed and that the importance of ‘cloud’ based services suggests that consumers want their favourite mobile content supported across different device form factors.

2011 will clearly be an important year for smartphone providers. As consumers continue to buy into ‘experiences’, the mobile ecosystem will be vital to attracting the next wave of smartphone users and winning the hearts and minds of existing smartphone users. With many compelling options, it will be the manufacturers whose ecosystems offer diverse services, relevant content and a simple user experience across a range of device form factors who will find themselves in the driving seat.

[1] Global online research was conducted by GfK Custom Research among a sample of mobile phone users in Brazil (1480), Germany (1001), Spain (1202), UK (1499), USA (883) and China (578). Fieldwork was conducted during October and November 2010

[2] Global in this instance includes Brazil, Germany, Spain, UK and USA but excludes China

[3] We realise that Windows Mobile has been re-built and re-branded to Windows Phone 7. During the fieldwork period of this research, Windows Phone 7 had not been released so we refer to current ownership of Windows smartphones as Windows Mobile

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November 30, 2010 | Ryan Garner | Tags: , , , , , , , , , , , Mobile Services, , , , , , | 3 Comments »

Will 2011 be the year NFC finally takes off?

Within the last week, Nokia, Google Android and RIM have announced, alongside rumours of Apple’s iPhone 5, that 2011 will see the start of NFC-enabled phones, and the beginning of widespread commercial usage of this exciting piece of technology.

Near Field Communication (NFC) is a form of wireless communication technology that allows an exchange of data from two devices if they come within 10cm of each other. It’s been around for quite a while; in fact most Londoners use it every day for travelling with Oyster cards. NFC phones first appeared in 2007, when Nokia released the first phone of this type. With all the benefits of NFC, it’s surprising that we still haven’t seen widespread commercial usage. However, this may all change early next year with the release of the Apple iPhone 5, which is rumoured to be NFC-enabled. If the excitement and buzz around new iPhones continues, this could be the start of something truly revolutionary. In an announcement only last week, Nokia pledged to activate their NFC chips in 2011, with Google and RIM keen to follow the trend, both declaring that the next version of Android and future Blackberrys will come with NFC. Clearly, it’s something not to miss out on.

With a big push from suppliers of mobile technology, how is NFC technology going to benefit the consumer? GfK NOP has been testing consumer applications of NFC since 2007, when we ran a high profile NFC trial for O2 in London. The trial reported positive feedback (in the press) for the technology, particularly the Oyster card integration on a mobile handset. People need incentives to embrace new technology, and now that the trials have shown the convenience and benefits of NFC, and users are clearly happy with it, it appears that the incentives are there.

Since the trial in 2007 the benefits and use cases have moved on. The new technology means that phones could become mobile wallets, keys, loyalty and travel cards, devices which allow vouchers, rewards and tickets to be received and stored and which transmit information from one device to another, for example, a camera or a television. NFC has been seen, through hundreds of trials and live services, to benefit the consumer. One of the main benefits is convenience. A typical customer journey might be as follows: you go into a shop and, by geo-location, receive information about that shop and/or offers available in it; you then buy items using your mobile and receive loyalty benefits, or use vouchers stored on the phone. On leaving the shop, you can get travel information by tapping an NFC code at a bus stop, and then pay for your journey by mobile. Once off the bus, you can go through ticket barriers to a concert, simply by tapping the phone on a ticket terminal.

Over the past few years merchants and handset manufacturers have, alongside banks, service providers and mobile network operators, been working out ways to capitalise on this consumer interest. As a result, several new partnerships and initiatives have been established, for example AT&T, T-mobile and Verizon announced recently a joint venture to utilise a mobile payment system, and some countries even have government backing for such schemes. Talk of NFC has increased dramatically in the last few months, as shown in Figure 1[1], and will continue to do so as more NFC services go live. An initial barrier to NFC usage growth – merchants’ unwillingness to upgrade transaction terminals (it’s expensive to do) – has now been solved with the introduction of a new Mobile Pay App. A geo-location tool identifies the merchant, the user taps to confirm the store, a PIN and payment is entered, the ‘Pay Now’ button hit, and voilà, transaction complete.

Figure 1. Google Trends image showing search volume index and news reference volume of ‘Near Field Communication’. This shows how online mentions of NFC have increased dramatically since August, and particularly in the last month, highlighting the buzz around this technology.

The interest from the various parties involved comes with the difficulty, however, of deciding where to place the NFC element, with mobile network operators, handset manufacturers and financial institutions preferring NFC in the SIM, embedded in the phone and on a microSD card, respectively. This competing interest will no doubt result in a power shift within the various parties involved, although it’s likely that NFC will benefit all three.

So will 2011 be the year NFC finally gains momentum?

Barriers to adoption

One of the biggest problems with NFC technology is one of its biggest assets… do consumers want everything on their phones? What if the battery dies? What if it gets lost or stolen? And it’s rather off-putting to have movements and purchases tracked as they can be by an NFC phone, and to be bombarded with information. Despite it being a popular concept to many, still over two-thirds of consumers have said they don’t want to pay by their mobile[2]. For the first few years anyway, NFC adoption might continue to be slow if limited to smartphone users and if people remain uninformed about the service and unconvinced that issues such as security and batteries are actually not a problem. Some speculate that only 16% of mobile subscribers will have NFC-capable mobile devices by 2014[3]. Because of these doubts, we’ll have to continue to wonder how well NFC will do, and whether these new partnerships will gain momentum in the New Year.

Positive signals

However, with companies like Apple (reportedly) driving service provision it’s hard to see how such NFC initiatives will fail to capture the imagination of the consumer smartphone market. Apple has a knack of taking technologies that have struggled to gain momentum (e.g. touchscreens and video calling) and giving them a new lease of life. In which case 2011 marks the start of a very exciting development in consumer–business relationships and how people use their phones.

[1] http://www.google.com/trends?q=Near+Field+Communication&ctab=0&geo=all&date=ytd

[2] http://www.nearfieldcommunicationsworld.com/2009/12/01/32406/59-of-consumers-want-to-use-their-phone-to-make-purchases-at-the-point-of-sale/

[3] http://voicendata.ciol.com/content/ContributoryArticles/110051003.asp

PHOTO CREDIT

http://flic.kr/p/8zJvup


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November 22, 2010 | Anna Parkinson | Tags: Apple iPhone 5, AT&T, , , Mobile payment, , , , , , , , | No Comments »

Mobile operating systems – the battle for hearts & wallets

Smartphone operating systems (OS) have become arguably ‘the’ most critical factor in the mobile device market in recent times. Whilst obviously being crucial to the functional capabilities of a mobile device, they are now also seen as the cornerstone of its revenue potential. This has brought about a fascinating battle amongst the biggest names in the mobile and Internet markets, all looking to ensure their OS is the market leader. The result of this battle is likely to have a significant influence on who will dominate these markets during the next few years.

Phones with advanced operating systems now account for approximately 70% of the contract market in the UK*. This has led to a significant market share decline for Symbian, which has for some time been the most prevalent OS in the market, and increased competition amongst the four key operating systems at the higher end of the market – RIM’s BlackBerry OS, Apple’s iOS, Microsoft’s Windows Mobile, and the newest OS to the market, Google’s Android.

Android is an open platform, free for device makers to license and use. Google don’t make a penny selling the operating system, but are expecting the resulting revenue from their app store and their ability to control Internet search through these mobile devices to more than cover the outlay they have made in development.

The signs are that this is likely to be a successful strategy for Google. In May 2010 GfK Marketing Services reported that UK sales of Android phones had risen by more than 300% from the beginning of the year, with one in ten contract handsets sold in the UK running this operating system. As a result of this the Android share of the UK mobile contract market grew by 10.2 percentage points from 3% to 13.2%.*

Unsurprisingly, the evolution of the market and the rise of the Android OS have changed the competitive landscape. There are challenges both for those who have been leading the market, and those who are looking to make inroads.

Apple remains in a strong position. They have a major hold on the market, with their devices, app store, and consumer experience seen by many as second to none. The loyalty that this creates will carry them forward in the foreseeable future, but they must continue to innovate on hardware and software in order to retain their market position.

Similarly, RIM are also in a strong position with their penetration of the business market. However this is tempered by the growth in the number of devices that are able to offer a consumer friendly experience in conjunction with the tools needed for business communications. RIM realised this and announced the release of their BlackBerry 6 OS, which will be highly significant to the continued progress of RIM in the market.

Symbian should certainly not be forgotten, despite recent trends and a shrinking market share they remain the worldwide market leader. They face some significant barriers if they are to maintain this position, however the Symbian4 OS which is to be released in 2011 promises to be a simpler platform which will attract developers, and could ensure Symbian become a major presence in smart phones.

One current unknown is the impact Microsoft’s Windows Phone 7 will have on the market when it is released. Microsoft are widely perceived to have fallen behind their three key competitors in the market, and it’s possible that this release is coming a bit late; however they retain significant influence amongst consumers.

So who is likely to come out on top?

The early signs are that Apple is holding up well in response to the Android challenge. They are continuing to grow share in the mobile device market, no doubt bolstered by the recent release of the iPad. Data from GfK NOP indicates strong loyalty amongst Apple customers in the UK, with 59% saying they intend to stick with Apple for their next upgrade, and only 3% saying that they would be likely to switch to an Android phone the next time around. This was in contrast to Android users, of whom 49% are thinking about switching to a phone with a competing OS.**

For the time being, it is likely that the iOS and Android will grow share at the expense of their competitors rather than each other. Unless devices containing the Blackberry 6 OS, the launch of the Windows Phone 7, or the Symbian^3 OS, are particularly well received, this threatens to become a two-horse race.

* GfK Marketing Services May 2010
** Global online research was conducted by GfK Custom Research among a sample of mobile phone users in Brazil (1480), Germany (1001), Spain (1202), UK (1499), USA (883) and China (578). Fieldwork was conducted during October and November 2010

PHOTO CREDIT

http://goo.gl/6D3RV

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November 1, 2010 | Andrew Stillwell | Tags: , , , , , , , , , , Mobile Services, , , , , | No Comments »

Why Windows Phone 7 demands high levels of consumer interest

In the PC market, Microsoft’s Windows OS is as common as the mobile phone in your pocket. However, Windows Mobile has struggled to capture the imagination of both consumers and businesses. In fact, with a rapidly declining 5% [1] of the global smartphone market it’s fair to say that relatively speaking Windows Mobile has been a horrible failure. But that’s all about to change.

Recent research by GfK NOP [2] shows that interest in Windows Phone 7 (the catchy name given to the successor of Windows Mobile 6.5) is strong. Almost one in five (18%) of UK mobile phone owners say they would consider a Windows Phone 7 (let’s go with WP7 from here on in) handset (available on HTC and Samsung devices among others) when they next come to renew, upgrade or buy their next mobile phone. Of course current smartphone owners display much higher levels of interest (32%). What’s more, Microsoft will be pleased to hear that of all smartphone owners, those using Google’s Android will be most interested (41%) in WP7. So what’s changed?

One smartphone for all needs

New entrants into the smartphone business, such as Apple and Google (Android), have been quickly gaining market share from older incumbents such as Nokia, Microsoft and Palm. There are many reasons for this but one of the underlying factors is that smartphones developed by Apple and Google satisfy a broad array of consumer needs, including needs consumers didn’t even know they had.

This is a big sea change to the range of smartphone offerings available as recently as four to five years ago. Microsoft, Palm and RIM targeted their phones squarely at the business user while in the consumer market there was a portfolio of highly targeted phones; one for music lovers, one for mobile gamers and so on. The iPhone and the numerous Android based smartphones are designed to not only satisfy the broad range of consumer needs (music, gaming, email, maps, productivity etc.), they are also becoming attractive solutions in the enterprise market. Importantly, the content available on their respective app stores creates a sense that anything is possible.

The key to Apple and Google Android’s success is that they do a lot of things really well and don’t just rely on certain core services. Microsoft has recognised the success of this formula and WP7 has a plethora of pre-installed services and marketplaces from which to download apps and media content. This makes their smartphones an attractive solution to a broader market of consumers and enterprises.

Stephen Fry [3] summed this up perfectly at the launch event of WP7:

“[people are not] one thing when they’re outside work, and another when they’ve gone through the swipe barrier” … he went on to say … “Now, they get it [Microsoft]: that all human beings are human beings first. You don’t judge the machines you use, or the houses you live in, by listing their functions. The first thing you do is say how you feel about your office; when you buy a house, you do it essentially on the feeling.”

Why Windows Phone 7 will be a success

This sentiment is reflected in the drivers of interest for Microsoft’s new WP7 platform. We presented and described the new features of WP7 to those who were interested in the new smartphone platform. Very few respondents selected just one feature and the results show a fairly even spread across many of the announced features. Despite email and Outlook integration being the most popular (52%), search and maps (43%), the Office hub (41%) and all the multimedia features take a significant share of the appeal of the new platform.

With the smartphone market becoming ever more competitive, providers will be looking for new ways to differentiate. Of course, different app stores have varying levels of content, there are ease of use drivers and brand effects but there are other ways. Each smartphone provider has a portfolio of digital properties that they can use to differentiate. Apple has iTunes, Android has Google Maps Navigation and a wide array of Google services, and Nokia has Ovi. WP7 also has an incredibly strong offering when it integrates many of Microsoft’s digital services on a smartphone device. Microsoft Office, used by the vast majority of consumers, is seamlessly integrated into the new platform. There is obviously full support for Microsoft Exchange with Outlook integration, XBOX 360 gaming arena, Bing search and maps, and Zune marketplace for music and videos.

All this makes Windows Phone 7 an attractive solution before the consumer has even browsed the app store. This is what makes WP7 so compelling; Microsoft has finally taken its strength in the PC/online market to the smartphone!

[1] Mobile operating system market share http://www.gartner.com/it/page.jsp?id=1421013

[2] 881 online interviews were conducted by GfK NOP among a UK representative sample of internet users. The fieldwork was conducted between 22nd – 25th October 2010

[3] Stephen Fry’s comments http://www.guardian.co.uk/technology/2010/oct/12/stephen-fry-windows-phone-7

IMAGE SOURCE:

http://www.microsoft.com/presspass/presskits/windowsphone/images/wp7logo_web.jpg

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October 28, 2010 | Ryan Garner | Tags: , , , , , , , , , , , , , Mobile Services, , , , , , , , , | 1 Comment »

Smartphone Navigation and Mapping applications still doesn’t meet all consumer needs

With the rapid growth of smartphone ownership over the last couple of years, it was inevitable that people in the UK would increasingly turn to their mobiles to access local travel information and journey planning applications. More than ever, consumers expect to source information quickly, spontaneously and with minimal effort – which begs the question, why would you ever need to use a paper map when you have your phone to hand?

Over the last 2 years, GfK have run online qualitative discussions with smartphone owners, asking them exactly that. Over the course of a 3 day online discussion in 2009, which was repeated in 2010, we discovered that the various map formats that exist (both physical and digital) are still widely used, with each format offering unique functional and emotional benefits. There is clearly not one maps service that ticks all boxes for consumers as yet.

The following embedded video, produced by GfK Film Works, provides an overview of the findings:

To view the full online discussions, which were conducted using GfK’s Revelation partner software or for more information on the research, please contact Anna Lancaster by clicking here

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October 27, 2010 | Richard Preedy | Tags: , , , , , , | 1 Comment »

Considering the mobile phone as a research tool

Technology cycles tend to last about ten years, from the personal computing era of the ‘80s, through the desktop computing era of the ‘90s to the mobile computing era of the early 21st century. Each has brought more computing power, better user experiences, lower prices and expanded services to more people. And with every new technology comes new opportunities for the research industry. None more so than the saturation of mobile phone ownership and the increasing power and capabilities of the modern smartphones.

GfK has been investigating various ways that mobile technology can be leveraged for research purposes, and this is a brief introduction to a few of our recent initiatives.

Taking mobile-based surveys mainstream: a Nokia case study

Nokia challenged GfK to monitor their whole portfolio of digital channels, including both standard and mobile websites or online shops. This posed a number of challenges in developing an online survey that would work on both the mobile phone as well as the PC, across all possible brands and models of mobile phone, on the various different mobile operating systems, as well as in all the languages for the countries in which Nokia operates.

We achieved this by linking from a banner on the Nokia mobile sites to a mobile-web survey hosted by GfK, which adapted the content and layout depending on the country, language and phone model – information which was pulled from the Nokia server. While this survey needed to be focussed on key metrics only to manage interview length, we were able to develop a solution in-house that solved all of these challenges and we’ve now achieved over 100,000 completed interviews in less than a year.

A picture’s worth a thousand words: a GfK case study

With the proliferation of channels communicating brand messages to consumers in today’s world, there is a growing need to help businesses understand which are the most effective and how they interact. ‘Mobile Moments of Truth’ is a research tool being developed by GfK that uses the mobile phone to capture and collect the full range of brand experiences. Rather than waiting to ask consumers to recall all brand exposures during a given time frame, panellists are able to take an image using their mobile phone every time they see or experience a brand and give a short report on where, why and how they felt.

This is all achieved through a simple online survey tool which not only gives time sensitive, granular feedback, but also consumer-created images that give a real-life context for each experience.

If phone’s can be smart, why not research: a GFK and Revelation case study

As well as using the mobile phone for online quantitative research, GfK has been investigating its potential for qualitative approaches. In a recent project in conjunction with Revelation (a GfK partner for online qualitative research) a sample of iPhone and Google Android users in the US and UK were invited to take part in a five day online qualitative session about their phone and how they use it in their daily lives; using both their PC and their smartphone to participate in the study.

While most respondents would usually default to their PC when convenient or available, they were more than happy to complete tasks using their smartphone, and when doing so the length and quality of their responses were comparable across the two methods. And when you include the added benefits of response frequency and image uploads of where they are and what they are doing from their phone, the smartphone offers a whole new dimension to the research.

Ian Ralph (GfK) and Steve August (Revelation) at GfK Client Summit 2010

WANT TO READ MORE?

GfK Research Summit 2010: The Digital Connected Consumer

PHOTO COURTESY OF:

Xjs-Khaos

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September 6, 2010 | Ian Ralph | Tags: GfK, , , , , | 1 Comment »

Mobile data allowance grows in importance among smartphone owners

Recent research conducted by GfK NOP shows that, among smartphone owners, mobile data allowance is more important than the network operator and the handset type.

From previous posts on TechTalk we’ve shown how the use of mobile apps shows no sign of abating and that the tight integration of services on the iPhone drives Apple’s smartphone success. This thirst for apps and services is the reason why smartphone owners are placing greater importance on their mobile data allowance. Smartphone owners now rely on the services their phone provides and taking these away is not an option.

With many UK operators having recently capped their data allowances, smartphone owners will think carefully about their next mobile tariff. GfK NOP estimates that 24 per cent of contract customers using smartphones would actually switch operators if they could get a better mobile data allowance elsewhere.

The decision to cap mobile data usage is a sensible one as the major UK network operators have millions of customers who depend on a reliable mobile network. However, in doing so, network operators need to consider the mindset of the consumer. The average mobile phone user including many smartphone users simply don’t know how much data they use. Those who require a data allowance will always prefer an ‘unlimited’ package for peace of mind. Now that ‘unlimited’ data is coming to an end, consumers will look for the safest option; in other words the operator offering the most generous package.

It is easy to see why smartphone owners react this way when you look at the level of importance they place on using services on their mobile phone. Table 1 (below), shows the level of importance consumers place on mobile services in their day-to-day routine:

Table 1: Importance of mobile service usage

There is clearly a stark contrast between the UK average mobile consumer and smartphone users. Given this huge difference in attitudes it is little wonder the extra emphasis smartphone users are placing on mobile data tariffs. The biggest challenge for network operators over the next few years is how they cope with the increasing demand for smartphones and the increase in data usage this will inevitably bring.

This research was conducted in association with Reuters who have published a thorough market analysis here

If you have any questions or comments regarding the research please click here to email us or leave your opinion in the comments section below

RESEARCH NOTES

  • Research was conducted by GfK NOP in association with Reuters between 16 – 19 July 2010
  • 978 interviews were conducted online among UK adults aged 16 and over. The sample is representative of UK adults with internet access.
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August 12, 2010 | Ryan Garner | Tags: , , , , , , , Mobile Services, , | No Comments »

Exciting Opportunities for Mobile 3D?

3D stereo anaglyph picture, use red blue glasses to view anaglyphic photo

3D stereo anaglyph picture, use red blue glasses to view anaglyphic photo

For the last year or so, 3D has been one of technology’s hottest topics, with the success of 3D movies paving the way for TV manufacturers, to the extent that two in five UK adults now express an interest in buying a 3D screen for their home. But what is the opportunity for mobile device manufacturers?

There has certainly been a lot of market activity (e.g. Sharp’s unveiling of a 3D mobile phone display) in anticipation of consumer demand, but will public enthusiasm migrate to mobile phone devices?

A recent GfK Technology survey, found that 12% of mobile phone users were interested in 3D photos and 8% were interested in 3D gaming. It is likely that the latter and any apps that embrace Augmented Reality or which offer the opportunity to enhance user generated content are going to drive most interest.

However, right now it’s a difficult call as to whether 3D on mobile will really drive the market. It’s up to the handset manufacturers to ensure the execution of the technology lives up to the hype.

To read a fuller article on this topic by Colin Strong, managing director of GfK Business & Technology, click here.

RESEARCH NOTES:

GfK NOP Technology conducted a survey among 996 UK adults in June 2010. The interviews were conducted online and are representative on UK adults who have access to the internet.

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3dstereopics
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July 31, 2010 | Richard Preedy | Tags: 3D| No Comments »

Connected Kids: the future generation of mobile owners

Mobile phone users under the age of 16 are extremely sophisticated, with deep brand experiences and preferences. This raises significant questions for network operators, handset manufacturers and service providers regarding how best to engage an increasingly important market segment. 

You could be forgiven for a sense of déjà vu. After all, rising mobile phone use amongst children is not a new phenomenon. As long ago as 2004 the Guardian was reporting growth in ownership amongst under-10s, [1] and media coverage concerning potential health concerns can be traced back even further. However, our ever-increasing reliance on, and immersion in, mobile phones and the digital services we use them to access, justify revisiting the topic. 

Recent data from GfK reinforces just how prevalent mobile ownership amongst under-16s has become (2.5 million 12-15 year olds, almost 9 in 10, now have one). Furthermore, this is the age group cementing the shift in behaviour from passive entertainment, such as television, to more active digital and online activities. [2] As such, it should come as no surprise that the value placed on their mobiles increases accordingly. 

It would be easy to assume these younger consumers are neophytes, new to the category with few preconceptions. Not the case. While 12-15s may be the first to acknowledge the importance of the technology, many of them are the same children the Guardian was reporting on five or more years ago. Instead, as many as 85% of those acquiring a phone are already on (at least) their second handset, and already hold the assortment of brand perceptions that follow this prolonged involvement in the category.[3] 

As established users, with a penchant for advanced features and functions (camera, music, and games usage are all high, alongside social networking, IM, and email), it comes as no surprise that entry-level handsets have limited appeal. While the majority (70%) of phones in this age group are being gifted, three-quarters (74%) of users were involved in the selection process, with medium and high-end handsets flourishing and above average spending. [3] Unsurprisingly therefore, style and functionality will be key to handset manufacturers, for whom it will be necessary to attract the end-user as much as the purchaser. 

The scenario facing operators is less clear. Selection of network and tariff, nominally a decision of less outward importance to younger consumers, remain primarily the domain of the purchaser (in contrast to handset, just 49% and 45% of 12-15 year olds influenced the choice of network/tariff respectively). How then, do operators approach these consumers? Given their focus on handset, clearly an appropriate and desirable range is a prerequisite. Beyond this however, high levels of gifting and relatively low interest in network/tariff imply it’s the gifter, as much as the end-user, who needs to be won over. 

Mary Robinson at GfK Telecoms Research Panels highlights the importance of the under-16 market for network operators: 

“Recent GfK findings for contract phones show that 83% of adults replacing their mobile chose to remain on the same network as before. With such high levels of loyalty in the adult market, the product propositions and brand experiences of the under-16s become massively important. Ignore them at your peril.” 

Ultimately, when this generation hits adulthood and consumption becomes self-sustained, they will already be sophisticated mobile users consuming a range of services and content. Harnessing their demand will be a key revenue stream in the future mobile marketplace, and the brand preferences already developing will play a significant role.

For handset manufacturers, operators and service providers, the prize is a significant one.

 For more information on the under 16 telecoms market please click here

[1] http://www.guardian.co.uk/technology/2004/apr/28/mobilephones.uknews

[2] http://www.statistics.gov.uk/cci/nugget.asp?id=2199

[3] GfK Research Panels: Kids Mobile Phone Market Report Q110

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July 20, 2010 | Olly Robinson | Tags: , , , , Mobile Services, | No Comments »
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