Continuing with a great success, let me welcome here again a dear friend of mine. Please welcome Savka Andic, Research Associate at the Wireless World Forum, who is also the co-author of the mobileYouth 2006 report. Savka has agreed to share some insights from the upcoming mobileYouth 2007 report!
Savka, the stage is yours!
What can you say about the differences in mobile usage among youth worldwide?
Differences in mobile usage among youth worldwide are due more to differences in mobile industry structure than they are to any underlying cultural differences between today’s youth. In fact, youth are remarkably similar and share the same basic needs the world over; what’s different is how the mobile industry recognizes and responds to these needs. We often hear arguments about how Japanese and Korean youth are more “gadget-crazy” and more likely to be early adopters than American or European youth, or how the culture is simply different in East Asia and youth there are naturally drawn to strange new technologies. This is like arguing that people living in the tropics spend more time outdoors than those living in snowy climates because they are innately drawn to nature, completely ignoring the fact that it’s much warmer near the equator and therefore more pleasant to spend time outside than in the freezing cold! It’s flawed logic which overlooks the generative conditions of youth mobile use.
For example, people used to argue that texting would never take off in the US like it did in Europe or Asia because more people had access to email and wouldn’t be interested in using the phone for sending messages. However, in 2006 texting grew fivefold in the US and is now nearly on a par with texting in Europe after the dismantling of major industry-related barriers such as SMS interoperability and charging models where customers paid to receive text messages.
Youth in Northeast Asia continue to lead the world in high levels of data usage, where on average youth data ARPU comprises 40% of total ARPU. In Europe, America and the Middle East data ARPU still lags significantly behind, comprising about 10-20% of total ARPU. I predict a move towards significantly heavier data use among youth in the coming few years, particularly with the increasing uptake of mobile music.
Where are the emerging youth markets for mobile products and services?
Geographically speaking, China, India and Brazil will continue to be key markets for the next five years, all three of them ripe for growth. In the more mature markets, mobile content is still very much an emerging market for youth with a lot of potential. Operators and content providers are not yet finding the best ways to satisfy youth desire for mobile content, with the notable exceptions of youth MVNOs such as Amp’d Mobile in the US and the East Asian operators. Amp’d Mobile’s success shows the considerable appetite which youth have for mobile content: an ARPU four times higher than the US/European average and content revenues nearly ten times higher than the US/European average.
What are the economic implications of mobileYouth purchasing?
Displacement, displacement, displacement! Mobile’s intrusion into the traditional areas of youth consumption has created displacement in both the financial and the social arenas. The more conventional youth symbols of social status and maturity, such as cigarettes and special clothing, have been displaced to a considerable degree by mobile. In fact, the decline in smoking among UK 15-16 year olds during the late 1990s and early 2000s was attributed in part to the rise of the mobile phone, which not only left youth with less disposable income to spend on cigarettes but also functioned as a tool to define status and signify maturity much in the manner of the cigarette.
Financially speaking, mobile has displaced a remarkable $500 billion worth of youth spending since 1996. In 2006 alone, youth worldwide spent $130 billion of their disposable income on mobile, and by 2010 that figure will rise to $350 billion. Today youth on average spend 10% of their disposable income on mobile, but in certain regions such as Japan, Korea and the Middle East, that figure is as high as 15-20%.
You claim there is a lack of consumer focus in mobile industry. What are the reasons for it?
We identify two basic reasons for this lack: the residual effect of uncompetitive market conditions in early markets and the general attitude of the technology industry towards consumers. Decades ago, the divide between technology and the average consumer was very great. Technology did not make up the fabric of everyday life like it does today and average people had less knowledge and lower expectations of technological products. In turn, the industry did not feel obliged to take consumer needs into account and this fostered an industry push model of technology. The industry assumed that consumers (or “end users” as it still calls them) would eagerly lap up all of the products pushed upon them, a mentality which continues today with concept such as “killer apps” and the like.
Telephony was traditionally seen as a utility, much like gas and water. Gas, water and landlines are commodities, and you really don’t care who provides them for you as long as it’s reasonably cheap and good quality. This telephony-as-utility approach had a residual effect on the mobile industry. However, mobile networks cannot behave towards consumers as if they are providing a mass-produced generic utility - mobile phones are crucial social tools and people are anything but indifferent to them like towards gas or water.
What are the “mobile myths” according to mobileYouth?
The lack of consumer focus in the mobile industry addressed above has spawned a series of myths regarding how consumers use their phones and what they want on mobile. One of the main myths which I touched on above is that consumers want “killer apps” – fun and “cool” new technologies and “feature-rich” phones. The principal message of mobile youth is that “killer apps” and “features” mean nothing unless they are underpinned by a social benefit for the consumer, especially for young consumers, whose universe is tightly defined by the type of social interaction they have. This is why complicated services with no clear social benefit such as MMS have not taken off, despite the industry pitch. Why should kids send expensive and convoluted MMS when they can upload their mobile photos to Flickr using services like Shozu and share them with friends?
This is where Comverse has done a great job with mobile avatars. Mobile avatars recognize youth’s need to extend their self-expression beyond their phone, making the avatar a form of social currency among youth.
Another myth is the myth of mobility – the idea that simply being able to take something with you on your phone is a social benefit. Mobilizing existing services such as TV and social networks is not necessarily compelling for youth – there must be some added benefit beyond mobility which reinforces youth’s existing peer group or helps them interact more effectively with their environment. It is for this reason that PC and mobile social networks are actually quite different, and simply sticking a PC MySpace page on mobile phones is not really compelling or a big deal for youth. This is also why technologies like QR codes can be very beneficial, because the leverage the unique flexibility of the mobile phone to the consumer’s benefit.
Kids use their mobile phones a lot at home where they can easily access PC and landlines, so obviously the appeal of the mobile phone goes deeper than just “mobility” otherwise they would only use their phones when “on the go”
Thank you Savka for these great insights :)
Savka will be here next Thursday, so don't forget tune in!