A few weeks back, I was at an awards dinner, listening to a speech given by a venture capitalist from Sequoia Capital. He was describing to us the unexpected success, if you can call it that, of their now famous “RIP” presentation, and joked that we’re entering a perfect storm.
Only this time, he said that we’d wish that we were in the water. If I am caught up in that storm, I only hope that I’ll have my BlackBerry to keep me company (and to check on the winds and waves).
We sometimes think of mobility as immune to the current state of the global economy. Sure, some analyst will write that folks will continue to send text messages, that 30-somethings won’t be putting off their next iPhone or G1 purchase, or that AT&T and Verizon Wireless are still growing the business, but this perspective, taking single datapoints, is misleading.
Globally, the credit crunch is very much alive, and operators will be tightening their belts into the foreseeable future by putting off capital purchases and looking for ways to optimize. The watchword is now on reducing operational expenses, with a realization that average revenue per user (ARPU) growth is shifted out. Subscriber growth, services growth and handset growth will slow, with the magnitude of the problem increased with every passing quarter that things don’t turn around.
The CFOs have the upper hand and are battening down the hatches. Anything not essential is cast overboard (to use the storm analogy). But they can’t go too far by casting their customers overboard as well. They need to maintain customer satisfaction, as the worst thing that can happen today is to do anything would increase churn. You only need to look at Sprint to see the results.
However, these challenges – the preservation of capital and the need to cut expense – are sometimes at odds with the reality of explosive smartphone growth. Between BlackBerry, Android, Windows Mobile, Symbian, and of course the iPhone, 30% of all phones globally shipped in 2009 will be smartphones. By 2014, overall penetration will approach 75%. This, even in the face of macroeconomic headwinds.
Outside of subsidies, as AT&T would relate, these smartphones cost more to support, sometimes generating calls that last upward of 30 minutes. In fact, 30% of all calls are configuration related, and the cost of frontline support costs operators more than $25 billion annually.
It’s easy to see how a single call can wipe out an operator’s profit for the month. This is compounded by usability issues, with the average user ignoring many features that the operator has spent time and money to productize. Also, the operator’s support organization requires additional training to handle these platforms. And, forwarding support calls to the handset vendor is just a partial solution.
But, these smartphones are the future. They do generate more revenue when they work, and subscribers are less likely to churn if they are happy with their handset and service.
The real problem is, when a user calls in to his or her operator complaining of an e-mail or media problem, the frontline customer service representative (CSR) has no way to look into the device. It could be as simple as one mis-configured server setting, or a data coverage problem, but what usually follows is a long, drawn-out dialog of menu and setting descriptions. Push here, click there, and enter that. The dentist is usually more fun.
There has to be a way that the operator can reach out and touch the device remotely, a way that is deployable in the near-term to help placate the CFO-types. This is where mobile device management (MDM) comes into play.
It’s technology that creates an over-the-air link between the Helpdesk and the user’s phone. The CSR can quickly pull up the live configuration, compare it against the “gold” baseline, and push out the changes. No more messy menus. Lose your phone? Call in, and it will be remotely locked or wiped. Is an application misbehaving? Maybe the device maker has released an update that can now be effortlessly pushed to the phone.
MDM is not going to solve all of the operator’s problems, and surely won’t cure the global economy, but it can begin to make a dent into smartphone support costs, building satisfaction and loyalty at the same time. For those of you who are into “Who Wants To Be a Millionaire?” think of it as a lifeline in the storm.
Ginsburg is vice president of marketing for Innopath.