Trends in Cell Phones and Usage

Trends in Wireless Phones and Usage in Canada. The wireless business has been driven by technological advances in phones so far. In 2001, no wireless phones incorporated digital cameras or camcorder, could receive email, play music or video, or surf the Internet. Some telecom companies offered Push-To-Talk with its Direct Connect service and there were a few rudimentary games on some higher end phones. Otherwise, wireless phones were very basic by current standards. Today most wireless phones sold worldwide incorporate at least one advanced feature. Competition among phone manufacturers is primarily based upon a race to add additional features within accepted price ranges. But that is about to change. Packing more features into a smaller phone as its limits. The transition to content as a differential for telecom companies is likely to accelerate over the next five years. The addition of content as a significant revenue stream for telecom companies, in addition to subscriber fees and sales of phones is likely to drive innovation in cell phone features.

 

Trends in Cell Phones and Usage.

The big trends over the next five years include the following:

1. Advanced features are standard in phones

 

In a recent Arcus survey of over 1,200 individuals to get a sense of where consumer sentiment is today, over 95% of wireless phone users said they use at least three of the technological innovations introduced in the past five years.

 

Increasingly, cell phone users consider these features to be integral to the phone and not an extra feature. These innovations have become part of a “basic phone.” This trend will increase the emphasis on other differentiators to engage cell phone customers. Cell phones of the future will incorporate features in a combination of what the value chain needs to support its business, what end-users want, and what the different players need as the environment changes. The value chain, which consists of the manufacturer, a distributor, the wireless carrier, and, in about 25% of the respondents, the employer of the end-user, need an ongoing stream of innovation and consumers open to new features. This appears to be the case in spite of some warnings that the wireless phone market will soon be “saturated.”

 

2. The future is flexible and wearable

 

This year’s Flexible Displays and Electronics Conference confirms that the future is with flexible, folding, and rolleable displays. Almost everything at the show is still a few years off, but there are actually two products with flexible displays for sale right now, Gyricon’s electronic ink display and a wristwatch from Nike with a curved LCD screen (which has actually been out for years). A brilliant example is the Nokia 888 communicator concept phone. You’re not going to see this in stores any time soon. But if you’d like to get an idea of what Nokia thinks the future of communications will look like, take a look at the Nokia 888 communicator, a concept design that recently won Nokia’s Benelux design contest.
The bracelet-like 888 is envisioned to use a liquid battery, feature speech recognition, a flexible touch screen, and a touch sensitive body cover. A video showing off the device’s potential features shows off close to a dozen functions, including an alarm clock, PDA, GPS, phone, push email receiver, digital wallet and, of course, jewelry. And, other than the “liquid battery,” we can actually see this in the not-too-distant future.
The end-users wants are more ambiguous. The figure below shows that there is little interest in multimedia capabilities while there is significant interest in location services.

 

3. Software is the phone

 

High functionality SmartPhone will grow rapidly as consumers expect phones to integrate deeper into their lives. In addition, manufacturers will shift to platforms with user interfaces that deliver unique experiences from software upgrades rather than hardware changes. These will be stealthily incorporate a phone Operating System to easily morph new combinations of capabilities into the market quickly and economically. Nokia has an amazing video on the future applications of the mobile phone.
4. Business applications will penetrate deeper into Corporate wireless

 

Wireless service continues to be treated as a corporate benefit. As data access becomes more integrated into mobile applications, there is likely to be a cultural shift of wireless phones from being “yuppie toys” to its recognition as productivity tools. As value-added data service will overtake the revenues from voice services, the industry will recognize that believing that one phone per person equates to market saturation. When society looks back on 2006 when it is 2011, it will be parallel to looking back to society looking at the days of Microsoft DOS. An example is the growing use of mobile phones to monitor customer purchasing patterns. Mobile phones look and feel like mini-PCs, improving the mobile internet experience and increasing the use of data services.
5. My Mobile Wallet

 

Cell phones are likely to become the new Interac. As consumers concerns about wireless security abate and the technology in North America catches up with Japan and South Korea where mobile commerce practicality of using a wireless phone in monetary transactions will overcome whatever consumer resistance exists to this application. While mass market purchase is focussed on services like tickets and entertainment, longer and more frequent online surfing is likely to broaden the goods and services purchased online. QR codes will drive the integration of product information with mobile commerce. South Korea has seen a dramatic increase in ARPU (average revenue per user) in the mobile sector as operators promote value-added services and customers respond enthusiastically driving mobile market blended ARPU by 13% to US$49.3 per month in the Asian market in the past year. Compared to Canada where the percentage of ARPU spent on data services increased by 4.5 % points to 12.1% last year, fuelled primarily by strong growth in the messaging sector. Canada has one of the highest postpay/prepay ratios in the world at 4:1. ARPU for postpay services is typically over 4 times that of prepay services in Canada and growth in postpay subscribers plays an important part in raising blended ARPU. Interestingly, Canada has a higher ARPU than South Korea even with an under developed mobile services market. ARPUs of Bell Mobility and Telus are $51 and $63 respectively. The recent CRTC wireless spectrum auction will hopefully open up the market for mobile content and services.
6. Local search now in your neighbourhood

 

Widespread adoption of Internet surfing from wireless phones will come with the use of more intelligent entry options. Android will dramatically change wireless search. The Open Handset Alliance, a group of more than 30 technology and mobile companies, is developing Android: the first complete, open, and free mobile platform. Take an early look at the Android Software Development Kit. It will combine information from the web with data on the phone — such as contacts or geographic location — to create new user experiences. Android does not differentiate between the phone’s basic and third-party applications — even the dialer or home screen can be replaced. Check out introduction from Sergey Brin on Android.
7. Biometric Security is here

 

Security will be a concern of the past just as online banking has become acceptable, mobile commerce will change dramatically after biometric security becomes standard on phones. The interaction between a cell phone and user is highly personal and interactive. So seamless, convenient and intuitive integration of security will speed up acceptance of mobile commerce adoption.

 

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