Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry. In the coming weeks look for columns from NPD Group’s Ross Rubin, Enderle Group’s Rob Enderle and more.
The good people at Sprint Nextel have an expression they use when talking about their Nextel Direct Connect service: the button. In this context, “the button” is shorthand for the value of push. Push to Talk. Push to Voicemail. Push to Email. Push to Explode (I made that one up, but wouldn’t it be fun?). The term works because core iDEN users fully understand the value and Sprint has done a remarkably good job in messaging it – especially as it attempts to shore up its user base.
A few years ago, the entire wireless industry seemed to go gaga for Push to Talk. Every network vendor had a solution or partnership. Major handset vendors were promising clients on a majority of their devices within a few years. Everyone was busy salivating over a future where we’d all be pushing, talking, exploding and taking the profits to the bank. Now that we’re here, it seems that future never arrived; no matter how much they tried, nobody could match Sprint’s success. In part, you can blame technology. In part, you can blame it on the fact that core Nextel users relied on, “the button” for their livelihood but your average person simply doesn’t know why it would be important to them.
This got me thinking, then, about the general proposition of wireless data.
The data push
In case you hadn’t noticed, data is the driving force behind most major mobile operator strategies and initiatives. Clearwire and its WiMAX plans. AT&T and its HSPA plans. Verizon and its LTE plans. The market’s slavish attention to wireless operator data revenues. Net Neutrality. Open Access. Femtocells as a way to offload data traffic. All of this – it’s all about mobile data and the expectation of a future in which mobile data is embraced by consumer and enterprise users alike, driving revenues in the process.
If it sounds like a veritable, “field of dreams,” that’s no coincidence. It’s all based on one common principle: build it and they will come.
Just like the gadget hounds who obsess over the value of resistive vs. conductive touchscreens (sorry Avi), anyone reading this understands the value of mobile data. or as some people have put it, “having the Internet in your pocket” (but that just sounds creepy). But, does the average person understand the value? Does your average small business accept the value? I’m not so sure.
Think about the average mobile-phone user over 18 (people actually paying their own bills). Is e-mail the primary data application they use? Are they surfing the Web with their feature phone or are they simply contributing to operator data revenues thanks to texting and ringtones? Now, think about yourself. When was the last time you used mobile video or cool data applications? Has your company offered to buy you a mobile data card or looked into biz uses for texting or access to your CRM database? Are you checking your Facebook page or Ebay account via your phone? Do you even have a Facebook page? Questions aside, recent data from the folks over at M:Metrics suggests that only 6% of American smartphone users watched mobile video in March. Use of social networking sites was a whopping 4.8%. Beyond consumers, as a colleague puts it, the overall volume of mobile data access among businesses is so much smaller than the consumer side that it “gets lost in the noise.” Granted, all of these numbers are on the rise. Still, would this meager usage from a small minority of users drive you to launch a brand new 3G or 4G network?
You can argue that it’s all a function of the available mobile devices and applications. This is why the iPhone has been such a big deal and every mobile-phone vendor whose name doesn’t start with “A” is working on an iPhone killer. None of it matters, however, if your Average Joe or ACME Corp. doesn’t understand why they’d want it in the first place or how to turn it into a way to improve their profits.
This isn’t just fodder for analytical musing. These questions are, ultimately, important to service providers, device makers and infrastructure vendors. After all, unless data traffic usage can be driven, the hopes for 3G upgrades (in the RAN, core and anywhere else) and 4G buildouts will go unfulfilled. And, unless 3G and 4G proliferate, the promise of all those fancy IMS applications we’ve heard about for years – much less basic Internet access – will be a moot point.
What’s the solution?
Time is one. It’s a slightly tired truism, but just as dial-up users move to broadband, 2G users will move to 3G. Again, mobile data usage (outside of so-called data services like texting) is still slim, but it is growing. It should continue to grow as people come to learn the value of data from friends with iPhones, HTC Diamonds, Samsung Instincts, RIM Bolds and Nokia N95s – not that I have any friends rich enough to buy their own N95s. The same holds true as innovative enterprises implementing mobile CRM and field force automation plans pave the way for others; ROI analyses conducted by these early adopters really do point to significant productivity enhancements. Of course, the fact that these new consumer and enterprise-grade devices promise user interfaces designed for improved data usage doesn’t hurt. Open access should help, too, if operators live up to their promises and smart kids in garages or dorms take them up on the opportunity to build cool new wireless apps. Innovative (meaning, cheaper – $60 a month for a laptop card is still too much to justify) pricing models, perhaps supported by 4G efficiency enhancements, count as a step in the right direction. Some new messaging wouldn’t hurt either. Every day, I’m bombarded by commercials about voice coverage and cheap calling plans and vague promises with creepy midgets. None of it makes me think of mobile data.
In any case, this is going to be a group effort requiring support, promotion and cool use cases from every corner of the wireless ecosystem. Judging by the success of “the button” outside of Sprint Nextel, it’s got to be a real effort, not just something we can assume will take place on its own.
Questions or comments about this column? Please e-mail Peter at pjarich@currentanalysis.com or RCR Wireless News at rcrwebhelp@crain.com.
