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    This is the personal blog of Simon Kendrick and covers my interests in media, technology and popular culture. All opinions expressed are my own and may not be representative of past or present employers
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The perception of disruption

Network effects hasten the rate of innovation. Therefore, the rate of technological change is faster now than it has ever been (at least if my memory of Solow-style exogenous growth models is correct.

This tends to be iterative. Small, continual improvements that improve the efficiency of processes and provide new opportunities for people to achieve their desires.

But, over time, this can be problematic.

Particularly with user perceptions.

The core proposition (and branding) of a product or service will try to remain fairly constant. But feature creep will bloat and complicate.

It is even possible that some innovations will supersede the original benefit in terms of usefulness and relevance, but it gets lost in the perceptions of users since it is only additive to the core proposition.

In order to focus upon the most useful innovations, a disruption is necessary. A break with the past.

Mobile is a good example of this.

Mobiles have evolved at a rapid rate. They got smaller as technological processes improved but then bigger as new features emerged. Cameras, music players and internet connectivity all augmented the core proposition – a device to make calls on, wherever you are.

But the internet has superseded the phone network. Email and social networks (and Skype) sit alongside voice and text, along with the numerous other benefits the mobile internet offers.

And a disruption was needed to make these innovations apparent. Because ownership doesn’t equate to usage.

This disruption was led by the iPhone.

Nokia has tended to lead technological innovations, but Apple repackaged the device. It brought back usability and simplicity, with the mobile internet at the core of the offering.

Nokia, Sony Ericsson and Samsung (NSS) may offer “smartphones” or internet enabled phones. But they are perceived fundamentally differently to the disruptors – Apple, BlackBerry and HTC/Google (ABH).

NSS represents an easy choice – a safe upgrade on something familiar with. The bells and whistles may be a bit shinier, but the phone is basically the same. And behaviour remains similar.

ABH are disruptive. They represent a new type of phone. People will think more carefully about switching. The benefits are framed in what is different or better to their current phone. Once they have invested, this behaviour needs to be justified and so they utilise the functionality. Behaviour changes.

The data from Essential Research’s Brandheld study illustrates this.

Looking purely at those claiming to own a smartphone (we gave them a consumer friendly definition outlining benefits; many wouldn’t know whether their phone allowed third party apps to be developed), there was no real difference in claimed internet use via a computer. ABH owners spend 25 hours a week online; NSS owners spend 24 hours.

But when the data for mobile internet usage is explored, a different story emerges.

  • 65% of ABH smartphone owners access the mobile internet every day; 29% of NSS smartphone owners do so
  • 78% of ABH smartphone owners access the mobile internet at all; 63% of NSS smartphone owners do so

The ABH figures are actually skewed by BlackBerry. 87% of iPhone owners say they use the internet on their phone on a daily basis. They are also far likelier to use services such as games, maps and commerce based services.

Is there hope for the incumbent? I’m not so sure. Clay Shirky noted, with regard to media companies, that there is no incentive to disrupt the core business model. Executives are used to things working successfully in one way, that they will seek to protect this for as long as possible rather than embrace the risk of the new.

Can this be combated? Maybe, but maybe not. It seems to be cyclical. Eventually the disruptor becomes the incumbent, and the process repeats itself.

On a sidenote, as previously mentioned I don’t think the iPad will disrupt the computing space. It is disrupting a market that is nascent; the mobile market was well established before it was disrupted. If anything, I think the iPad will just precipitate touchscreen laptops.

The data I used above was from Brandheld. More information about the project can be found here, and I’ve included a Slideshare presentation below that indicates some of the key findings (Although I worked heavily on the project and analysis, I didn’t write this document. As you can tell. I don’t possess Keynote and I would never include the word “insight” in a presentation)

sk

Image credit: http://www.flickr.com/photos/jesse_sneed/2383953694/

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A new era for mobile?

Mobile phones on a train in Japan

I’ve been speaking to a lot of people about mobile recently – partially because I have finally got an iPhone, but primarily because I am working on a project around how mobile phones fit into the media landscape.

Mobile phones as a technology are unquestionably mainstream, and have been so for about a decade. There are currently more mobile phones than people in Europe, and a recent study suggested that children get their first mobile when they are eight years old.

However, mobile as a media has taken a lot longer to infiltrate mainstream behaviour. There have been numerous false dawns in the past – notably around mobile TV – but the time for mobile does finally seem to have arrived.

And the driver for that is the mobile internet.

SIDENOTE: The mobile phone has found some exceptionally important uses in the developing world – Mo Ibrahim‘s work is a good place to start in this respect – but my research is focusing upon the West, and primarily the UK.

The four factors that have been influencing take-up of the mobile internet (in the UK at least) are

  • Faster network/connection speeds
  • Emphasis on unlimited data packages (even on pay as you go tariffs)
  • Greater choice of content
  • Better (in functionality and usability) handsets

In my opinion, the third and fourth points are a result of the iPhone. Relative penetration of the iPhone may still be low, and few of its functions may actually be “new”, but both the iPhone and the App store have changed the public’s conception of what a phone is and what it is used for.

To indicate how revolutionary it is, consider how many other phones are referred to by their brand name? Only BlackBerry, and that is arguably because it the initial emphasis was on email rather than telephony. The iPhone managed to set itself far apart from all other handsets on the market. It is aspirational and has caused other manufacturers to fundamentally change the way they design and market their handsets.

Furthermore, the iPhone has disrupted the mobile market. I believe iterative upgrading of handsets is still the most prevalent form of changing phones, but a significant minority are abandoning the previously well-formed “upgrade curve” and converging around high-end smartphones.

By changing the perception of what a phone is, a new coalition of users can be persuaded to change their willingness to pay. A person may have been willing to pay £20 per month for their mobile subscription to make calls and texts. However, that person may be willing to pay £35 per month for a smartphone subscription that gives them email, games, maps, videos and so on in addition to calls and texts.

These people may still have different levels of comfort with technology, and thus usage of the different features will vary, but the capability is there for all to engage in this new behaviour.

And that is quite exciting.

Not just in itself, but also in the effect this behaviour has on consumption of other media channels. The mobile extends the PC behaviour in complementary and competing ways, and it is important to understand the relationship that the two platforms have with one another (in addition to the other media channels – this remote record tool from Sky is a great example on how mobile can feed into the core business).

The environment is fast-moving and volatile, but it does appear that mobile is finally emerging as a media channel to be reckoned with.

I anticipate this a topic I’ll be returning to on numerous occasions – both here and on the Essential Research blog where I hope to update on the progress we are making on this project. In the meantime, I’m bookmarking all relevant articles and blogs here.

sk

Image credit: http://www.flickr.com/photos/cocoarmani/

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