What exactly do customers want from a phone?

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Not long ago, mobile customers had simple needs, because the phones themselves were simple. With the rise of complex smartphones, Mobile News asks the industry what influences purchases these days

Ten years ago, buying a mobile phone was a simple process. On deciding which form factor the customer preferred, there followed a few simple questions: Can it text? How many games and ringtones does it have? Can you change the facia? That was about it.

While handsets varied greatly in style, from something as simple as the colour to a flip or candy-bar form, in terms of actual functionality, they were all much the same.

But as the industry has evolved, so have the complexities of handsets. Devices at both ends of the market increasingly include cameras, video capture, and access to internet and email as standard.

And it is the latter that has changed the entire landscape for the mobile phone device. Since the days of WAP, the adoption of and desire by customers to access the internet from their mobile device has rocketed in the past few years.

Demand explosion
The explosion of consumer demand for data services arguably came from the launch of the Apple iPhone in 2007.

The iPhone effectively transformed the way in which customers use and interact with their device, and brought with it a new level of expectation.

Applications become a major selling-point, enabling customers to download content such as games and more business-focussed tools, directly from the device and grabbing customers’ attention.

More than a billion applications from Apple’s App Store were downloaded by 2009.

Speedy access to the web, to view the full internet on a large screen, was also something of a breakthrough at the time.

But perhaps the iPhone’s greatest achievement was prompting the rest of the industry to respond. For years customers had merely upgraded devices based on small updates such as new games, improved camera quality and minimal design changes.

Manufacturers, including LG, Samsung, Sony Ericsson and Nokia, responded promptly by launching similar, slate-looking devices, in a bid to compete in terms of overall look, with Apple. It
created a wave of slick slate-style handsets, which at face-value were virtually identical – making decision-making for customers more difficult.

Rise of data
The emergence of Android, which was first announced several months after the original iPhone was launched, extended the market further and allowed the above-mentioned manufacturers to remain competitive in this smartphone segment.

The knock-on effect saw sales for smartphones rocket, changing the focus by operators, which looked to gain from data consumption.

O2 showed in its Q1 results this year 82 per cent of new phones or upgrades were smartphones – an increase of 40 per cent compared with Q4.

Vodafone’s quarterly results during the same period, announced in June, showed similar findings, with 90 per cent of all handsets taken with a contract being smartphones – up from 70 per cent in the previous quarter.

And demand for such handsets shows no signs of slowing. A recent report from UK analyst Juniper Research predicts that total global smartphone shipments will top one billion units in 2016 – a 230 per cent rise from the 302 million devices shipped in 2010.

Analysts have suggested that as the market develops, the operating system will become the most important aspect of the decision-making process when buying a new device.

This in itself increases the need for manufacturers to add their own innovative offering to provide a level of differentiation – especially when considering new players such as Huawei and ZTE entering the market.

LG has already looked to provide some much-needed interest in its products by becoming the first manufacturer to offer 3D technology, with HTC following suit. Motorola, now owned by Google, has already launched its innovative converged products, the Lapdock and Atrix handset combo.

Feature priorities
Of course, innovation and differentiation are good for a manufacturer. But at the same time, it creates a level of uncertainty and confusion in the customer.

And while smartphone sales make impressive reading, it’s important to remember the majority of those are from customers upgrading their contract. Dealers claim customers instinctively seek the best and often most expensive phone available to them as part of a free upgrade – thus having such available features at their disposal, but rarely using them.

This is backed-up by a recent survey from Nokia, which revealed battery life is still the most important feature on its handsets, with 38 per cent stating they would prefer a basic phone with a good battery than a high-spec one with a poor battery. The same survey revealed 25 per cent chose internet access as the most important feature.

So what exactly do customers want? Mobile News asks the industry just what are the key features customers look for when buying a new handset.

Full article in Mobile News issue 497 (September 12, 2011).

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