To overcome these challenging economic times, mobile handset manufacturers might invest and focus on improving the customer experience as their key differentiator and ticket to more revenues and profits. To achieve this objective, they could begin by customizing products to serve discrete demographic and geographic groups, port popular Web. 2.0 applications and design and implement “green” features and standards-based technologies into their products.
Improve the User Experience
As mobile handsets become more commoditized, improving the customer experience has emerged as a key differentiator. Such improvement offers lucrative revenue and profit-generating opportunities and can accelerate handset companies toward high performance.
But differentiating the customer experience remains a complicated challenge. Demand for higher-end applications that tend to enable differentiation is not overwhelming. In December 2008, Accenture conducted research examining consumer electronics usage habits of 3,000 consumers in the United States. Seventy-nine percent said they still use the mobile handset primarily as a means of communications. Communications applications, such as making a simple voice phone call, offer fewer opportunities to offer differentiating customer experiences compared with enhanced applications.
Among the reasons for the limited use: 54 percent do not need or want entertainment or multimedia capabilities; 14 percent said the additional services remain too expensive; and 9 percent said the cost of a mobile handset that can support these services remains too high. Only 8 percent currently use multimedia connectivity services on their mobile handsets. When participants were asked “to what extent availability of mobile content drives them to upgrade their mobile plan?,” 70 percent said “to a very little extent.”
Even so, the research provided clear evidence that mobile handset service ranks as the most widely used consumer electronics service at 82 percent. This is followed by home Internet access (78 percent); local phone service (not voice over Internet protocol (VoIP) (65 percent); cable or satellite TV – not high definition (62 percent); and long-distance phone service (45 percent). Ninety percent of respondents indicated that in a prolonged recession, they would not stop using their mobile handsets.
Tailor Mobile Handset Products
Accenture’s U.S.-focused research also compared 2007 and 2008 handset usage by different age groups in five major consumer electronics categories. The research revealed that baby boomers (45-years-old and higher) outpaced generation “Y” users (18-to-24-year-olds) in all five categories. Boomers, for example, increased playing video games on-the-go via a mobile device by 49 percent – nearly a 20 times faster growth rate than the younger generation. So even though entertainment applications on mobile handsets remain relatively unpopular overall, they are becoming used at a faster rate among the older generation.
The new Accenture research also found that half (51 percent) of generation Y users prefer mobile handset service over all home services combined, including their home Internet access, cable TV, local phone service and high definition cable or satellite TV. By contrast, half (50 percent) of boomers mostly prefer their computers – 27 percentage points more than boomers who prefer mobile handsets most. As such, handset manufacturers might consider this mobile handset versus PC usage generational disparity in their efforts to improve the customer experience.
Localize Products, Sales and Marketing
Accenture also has done market analysis far beyond the U.S. mobile handset market. We have found that although most U.S. consumers don’t use their mobile handsets for Internet access, in Japan, the handset is the primary device for this application. Also, the Japanese widely use their handsets for making payments and GPS services. One popular GPS application in Japan triggers an alarm on the parents’ mobile handsets when children carrying a mobile phone exit a predefined safety area. In Korea, using the mobile handset for TV viewing is widespread, such as while riding public transportation. In China, a growing number of users access the Internet for the first time using a mobile handset.
Given these global trends, marketing of Internet and other enhanced applications for handsets should be more aggressively tailored to specific needs and interests of consumers in those different countries. Such emerging countries in this multi-polar world are becoming more competitive, financially relevant and innovative in the global mobile handset arena.
Port Web 2.0 Experiences to Handsets
Web 2.0 applications now emerging on personal computers need to be made widely available on mobile handsets. These include social networking, video sharing and blogging. Also, improving Web 2.0 experiences on mobile handsets requires further development and use of widgets. Self-contained, portable chunks of software, widgets can be installed and accessed quickly and easily on users’ handsets. This software extracts only that piece of information that a mobile handset user is looking for at a specific time, thereby making for more time-honored and effective use of the handset.
Design Standardized “Green” Features
Mobile handsets should be designed with “green” features so they can become recyclable and use less power. Furthermore, a standards-based approach to developing and commercializing more “green” mobile handsets should begin now in a coordinated and aggressive fashion. Standardizing green technologies can deliver cost advantages to handset manufacturers, simplify product development and accelerate product deliveries.
During this global economic crisis, companies also need to strategically cut costs, sharpen customer focus, drive operational excellence and acquire key capabilities and assets. Now is definitely not the time to wait the recession out. Rather, now is the time to take advantage of this unprecedented situation by executing on several different fronts described above. Being proactive now with a focused approach is the recipe – in fact an imperative – for meeting these economic and market challenges head-on and delivering high performance now and after the market reverses course.
Poitou is the global managing director with Accenture’s Electronics & High-Tech Industry Group. He can be reached at firstname.lastname@example.org.