Accenture has been conducting global market research on consumer usage and spending of mobile handsets /services. They wanted to determine how consumer electronics companies might better differentiate their products and services to grow their businesses. Mobile handsets have a high return rate, text/email are the top usages, web/video are the top apps and there are major differences in mobile behavior in India, Japan, China and emerging countries. The analyst who wrote the report is Jean-Laurent Poitou.
Accenture analyzed thousands of online surveys from Internet-enabled consumers in eight countries: China, France, Germany, India, Japan, Malaysia, Singapore and the United States. They selected these countries to compare the preferences of consumers in emerging countries (China, India, Malaysia and Singapore) to those of their mature country counterparts (France, Germany, Japan and the United States).
Highlights of the research follows.
A higher percent of mobile handsets get returned than any of the other 17 technologies in the study.
A higher percentage of respondents indicated they return mobile
handsets than any of the other 17 technologies. The most frequent
reasons cited for these returns are that they don't work properly and
are too expensive. In fact, return rates by India's consumers for mobile
phones amounted to 11 percent, twice the global industry average.
Analysis reveals that mobile handsets have a comparatively high
return rate because they are, arguably, more complex, less standardized,
more challenging to operate, and more prone to functional flaws (such
as dropped calls) than the other technologies consumers were asked to
rate. With increased complexity comes more consumer confusion and
difficulties figuring out how to use the devices, and hence more product
returns. Compounding the problem could be that survey respondents are
not getting the help they need during the handset purchasing process.
The most popular mobile handset applications are texting and emailing.
The top ranked applications used on mobile handsets (besides making
phone calls) for all eight countries, ranked in order, were texting,
emailing and taking photos. In general, these are the most popular
applications because they are relatively inexpensive compared with
downloading and watching videos on a mobile handset, yet enhance the
user experience considerably. And texting ranked far ahead of the other
applications in popularity. Mobile handsets are increasingly being used
as multi-function devices, though of mobile video continues to lag other
applications.
Among the least popular applications on mobile handsets are watching videos and browsing the Internet.*
Watching videos and browsing the Internet on mobile handsets remain
relatively low in usage by respondents compared with texting, emailing,
and listening to music. An overall average of only 35 percent of
respondents indicated they watch videos on mobile handsets, and only 34
percent browse the web. By contrast, 65 percent send texts and 47
percent send email. Why such differences? This disparity stems from the
challenges making watching videos and browsing the Internet easier to
use compared with the relative ease in texting, emailing and listening
to music. In addition, consumers are still attracted to watching videos
on other screens such as TVs and PCs, and connecting to the Internet via
a PC, rather than a mobile handset. Despite these formidable
challenges, the percentages of mobile handset users now watching videos
and browsing the Internet is likely to increase during the next several
years.
U.S. respondents' use of web-enabled mobile devices has nearly
quadrupled in the past two years, but trails Chinese and Malaysian use.
Fifty-nine percent of Chinese surveyed--more than any other country
surveyed--use web-enabled mobile devices. Singaporeans also ranked high
at 46 percent, followed by Malaysians at 33 percent. U.S. respondents
landed in the mid-range at 27 percent but nearly quadrupled from 7
percent usage in 2007. The explanation for the lower U.S. percentage is
probably that PC penetration is so high in the U.S. that it continues to
be the main device used to access the Internet, whereas in China and
Malaysia the handset has become, in relative terms compared with the PC,
more of the main device to connect to the Internet.
Users in India discontinue mobile service more often than home
Internet access.
In India and Germany, mobile service is more often discontinued by users
than home Internet access. Nineteen percent of India's respondents
discontinued mobile phone service compared with 13 percent who stopped
home Internet access. Among German respondents, 17 percent stopped
mobile service versus 14 percent who halted home Internet. But among
United States respondents, 8 percent ended mobile phone service, the
same percentage that ceased home Internet.
These findings could be explained by the competitive shopping, package
and wireless carrier hopping people do when service contracts expire.
Another possible reason is the inherent complicated nature of mobile
service compared with home Internet service. Mobile service costs
relatively more and is less predictable on a monthly basis, which would
explain the higher rates.
Eight: Among Indian respondents, there will be heavy investment in
mobile phone service during the next year.
Next year in India, 45 percent of respondents indicated they will
purchase mobile phone service, well above the 25 percent global average.
This finding underscores the massive telecom infrastructure upgrades
taking place in this country. There are few countries in the world more
aggressively deploying wireless services than India.
Emerging country respondents are more than two and half times as
likely to buy a smartphone during the next year than respondents in
mature countries.
Fifty-two percent of emerging country respondents are likely to buy a
smartphone next year. By contrast, only 20 percent of mature country
respondents are likely to do so. One reason is the rapid expansion of
the middle class in emerging countries, which has a growing amount of
disposable income. Additionally, the increased demand in emerging
countries for smart connected devices such as smartphones is being
driven by social networking applications, which are survey found to be
especially popular in emerging countries such as Malaysia. Part of the
reason for this disparity could be the higher penetration and use of
smartphones already in mature countries.
Ten: Mobile devices are more widely used than computers to access
Internet applications among emerging country consumers.
Emerging-country consumers use mobile devices more than they do
computers to access Internet-enabled applications and services, and
consumers in mature countries are also headed in that direction.
Japanese respondents are trailing other country respondents in multiple categories.
Japanese consumers have historically been early adopters of wireless technologies for texting, emailing, music and games. But with the overall economy stagnating, and the nation's popu¬lation already heavily equipped with consumer electronics, the country's consumers rank low among those countries surveyed in the percentage who have bought and plan to buy mobile handsets in the next year. During the past year, only one in five (19 percent) Japanese respondents bought a mobile handset, compared with 49 percent of all respondents. An average of only 16 percent plan to buy a mobile handset next year, compared with a 36 percent global average. And just 4 percent plan to purchase a smartphone. That's more than five times below the 21 percent global average. In Japan, it could be that their mobile handset upgrade cycle rate has slowed compared with the other countries surveyed, not necessarily that they trail in usage. This slowing of the upgrade cycle may be an eventual actuality in the other countries.
Chinese respondents usage of mobile handsets and mobile service applications is above average.
Chinese respondents tend to take more advantage of the technology purchased than respondents from the other countries. For example, 63 percent occasionally watch videos on mobile devices, which is nearly twice the 35 percent global average. Services in which the largest percentage of Chinese respondents will invest during the next year include mobile data service for laptops (44 percent vs. 21 percent global average), mobile data services for mobile phones (41 percent vs. 22 percent), and mobile phone service (36 percent vs. 35 percent).
A big reason for this heavy use of mobile handsets in China is that the country has rapidly embraced wireless technology. In many cases the nation has skipped the process of building out the wireline telecom infrastructure and widely embraced wireless technologies instead.
Final Thoughts from Accenture:
To achieve high performance in the mobile handset market, it's
crucial to focus on the emerging countries. A disproportionately high
percentage of usage and spending will take place in these countries
during the next several years. Another key focus area is social
networking applications, which are driving the growth in mobile handset
use, applications, and spending. The two are propelling each other. And,
finally, innovation is a big industry driver. The mobile handset market
is in many ways an innovation haven. The more innovative companies are
in this market, the more they invest in research and development to
build more feature rich handsets to improve the customer experience, the
more differentiated they are going to be. This is not a market that's
all about reducing costs. Investments are also key.
Jean-Laurent Poitou is the global managing director of Accenture's Electronics and High-Tech group.
A very interesting article - thank you! 🙂