I am a passionate believer the mobile telecoms industry should be working towards a world in which every user feels as if their mobile experience has been designed for them as an individual.
That is the primary objective which should define our horizon, the long-term goal to keep in mind as we develop today’s products and look ahead to the strategies of tomorrow.
Every mature industry – and we must now start to think of mobile telecoms as a mature business – eventually moves to a model in which the most personalised products command the largest premiums.
Think about some of the things which really matter to customers when they first pick up a new mobile device:
- The colour of the shell.
- The texture of the materials.
- The quality of the buttons.
- The styling of the form factor.
- Is it easy enough to use immediately?
- How quickly can they personalise the device with their contacts, content and services?
It is easy to lose sight of what’s important to end users when you work day-to-day in an industry dominated by technical innovation, but we need to wake up to the fact there is a significant disconnect between the reality of customer behaviour and the imagined differentiation strategies of the mobile business.
We are speaking a different language to our customers. When we talk about differentiation, it is typically a conversation dominated by technical specifications and acronyms. When customers talk about differentiation, they talk about personal expression.
The root of the problem lies in the very structure of the mobile industry. Unfortunately, the economics of our business are currently set directly against achieving this vision of individual mobile experience.
While few would argue with the logic of better targeting products to user needs, manufacturers and operators struggle to do so because they need to invest such vast resources in integration work every time they launch a new product variant.
Challenges like tying chipset components to the OS, supporting different regional wireless standards and managing build versions across competing operators currently account for the majority of the ‘differentiation’ costs in a typical handset portfolio.
However, few of these items make any meaningful difference to the actual customers. They are costs which result directly from structural inefficiencies in the mobile industry and they are preventing companies from investing in the features which actually make a difference to the user experience.
If you talk to people involved in the time consuming and expensive businesses of integration, testing and quality assurance, you get a frightening insight into just how inefficient the mobile business is.
You hear stories of chipset companies which have spent years developing proprietary products on their own, but have actually ended up using the same technology as their competitors in 60 – 70 percent of the platform. Not only does this waste significant resources for the chipset companies, it also means handset manufacturers and operating system developers must invest time and money to integrate the resulting mess into working products, repeating this procedure every time they want to use new components.
We work in a business where a handset manufacturer will be supporting 1000 separate variants of a single product to meet the requirements of different operators and geographies.
Put simply, we are spending too much money on things which mean nothing to end users. As industry insiders, we know the cost of supporting multiple spectrum bands and the complexity of porting an operating system to a new chipset, but these are issues of our own making. The customers just expect these things to work: offering a multi-band device which works in both the US and Europe isn’t a differentiator, it is an example of how we are papering over cracks in a broken business model.
Worringly, there is a growing trend to treat the symptoms rather the cause of this problem. Prompted by the success of the iPhone, competing manufacturers are focusing their resources on trying to develop single, blockbuster handsets which can cover the huge development costs involved in bringing products like this to market. The likes of Motorola and Sony Ericsson are reducing their ranges and trying instead to hit on a single winning formula to transform their fortunes.
It seems the mobile industry believes itself unique in being able to expand by producing fewer, less targeted products. This would be a truly remarkable feat, bucking a universal trend across every other field of commercial endeavour.
As the number of unit shipments required to amortise the cost of product development rises, so too does the pressure to create devices with sufficiently impressive feature lists that they will be bought by multiple millions of customers.
While this may result in a few hit products to compare with the extraordinary popularity of the iPhone, it goes against the most fundamental principles of customer experience. Long-term, the only way the industry will convince people to buy more devices and services is to provide them with a wider range of products, tailored to provide an individual experience.
If the industry is serious about providing better, more personalised products to its customers, we need to make a concerted effort to change the economics of development. There are large parts of the product stack which could be standardised and abstracted, allowing companies to focus on the differentiation which genuinely excites users.
I had some interesting conversations at Mobile World Congress with leaders at chipset companies, operating system providers and handset manufacturers on this issue. There was universal agreement on the scale of the problem.
Thankfully, an inflexion point may be in sight.
The growth of smartphones built on standard platforms like Windows Mobile, Symbian, LiMo and Android is starting to turn the economics of handset development on its head.
The Symbian Foundation in particular is working with chipset manufacturers to pre-integrate significantly more of the handset stack than has previously been possible, thereby eliminating considerable cost in the handset development process.
If successful, we may soon get to a situation where the most capable smartphones running open platforms actually have lower integration costs than feature phones running manufacturers’ legacy OS.
Every dollar saved in integration costs is a dollar which can be spent on adding to the customer experience: offering a greater range of product colours and form factors, expanding input options and building personalised services.
This is a genuine game changer. It is already prompting forward-thinking handset manufacturers like Nokia to recognise the next stage of competitive differentiation will be all about which companies can best understand users as individuals and then build integrated products and services.
Tomorrow’s handset vendors will be in the business of manufacturing experiences rather than boxes.
This subject will be one of our key Manifesto themes at the 2009 MEX Conference on 19th – 20th May. John Forsyth, Director of Strategy at Nokia and part of the Symbian Foundation leadership team, will be responding directly to this challenge and inspiring the MEX debate with a provocative presentation.
The 100 mobile pioneers attending MEX will then have an opportunity to work collaboratively at solving this problem through a series of workshops centred on customer experience principles.
I hope you’ll be able to join us at the event. MEX sells out in advance each year, so register today to guarantee your place.
I’d be interested to hear your thoughts on this issue of changing the economics of mobile user experience. What do you think are the factors which matter to most to the end customer? Which layers of the product stack can be most easily abstracted? Add your comments below…