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Saturday, September 15, 2007

Multiplicity in action - 1.6 phones per person in the UK

One of my current research & consulting themes is around what I call 'multiplicity' - the notion that future mobile users will have multiple devices and/or numbers, service providers, messaging inboxes, broadband connections, bills, social networks and so on.

I still regularly see presentation slides titled "The Power of One" or something similar - dispensing the 'obvious' wisdom that the future involves one device, one number and so forth.

This is marketing wishful-thinking that flies in the face of human nature, Moore's Law, competition & differentiation and assorted other factors. For every two things that converge, another three will diverge. If phones are both cheap & highly differentiated, why would you just want one? It doesn't mean you have to carry all of them, all the time.

Same with operator services - if they're commoditised, then sure, one is enough. But the paradox of competition is that if there is real differentiation in coverage, pricing plans, available devices, content/application partnerships.... then it's not surprising that customers will be promiscuous and want multiple suppliers, dividing their spending between them.

Sure, some people will be both loyal and adamant they want such a degree of simplicity that they'll happily confine themselves to a single 'thing'. But others - especially today's multitasking/multichannel youth - don't have a problem with managing complexity. If you're already happily juggling multiple groups of friends on MSN, Yahoo, ICQ, Facebook, MySpace & Bebo... adding another phone number ain't exactly difficult.

Some great evidence of this trend comes from this survey, apparently conducted by ICM for bank HSBC (I have no idea why & can't find the original press release). 45m adults, 70m SIMs, 71m phones - and 9% have 4 or more devices. My only question is whether the data assumes that only 'adults' have phones - I see plenty of 10-year olds with handsets, which might skew the analysis.

This correlates somewhat with other estimates I'd seen before, but if accurate seems to indicate an acceleration - previous estimates seemed to be in the range 1.2 - 1.4 per person, if memory serves me right.

The continued evolution of multiplicity is inevitable, in my view. Vendors and operators should take their heads out of the sand. As well as selling convergence products & services (which will certainly continue), they should also look to exploit and support divergence in parallel. Multi-SIM, Multi-Handset, Multi-Number services - and maybe even work with their peers to do cross-operator phonebook syncs and other services.

People evidently want lots of phones, numbers, operators, email addresses, whatever.... so make it easier, not harder.

8 comments:

A Mitchell said...

Dean,

Interesting concept on divergence, when do you think a manufacturer will produce a phone that can be used on multiple networks and address your "degree of simplicity theory". This would give users complete flexibility without having to invest in multiple devices and all the hassles related to multiple choice. Maybe people want lots of phones because currently one handset cannot address all their needs. The computer industry addressed this issue by allowing one device handle multiple applications, take the new Apple Mac's which also hybrid as a pc, it satisfies the die hard Mac user, and also enables them to run programs that the majority of other users have adopted i.e The PC.

Dean Bubley said...

I assume by "multiple networks" you mean multiple cellular carriers' networks?

Most phones outside of CDMA markets already work on any network (eg when roaming). However, when bought from a carrier (which around 50% of phones worldwide are), they are often SIM-locked to one operator's frequency in their domestic country. "Vanilla" handsets and unlocked operator-sold phones can be used with any operator's SIM card already. That said, switching networks involves switching SIM cards - not something you'd want to do multiple times a day.

However, if you meant working on multiple networks *simultaneously*, that's a different story. That would be problematic in terms of RF, authentication and user interface.

I don't think it's worth the bother. I know that for some reason US mobile users seem to think that "one device is enough", but the rest of the world appears to disagree. There are many reasons you'd want 2+ devices. The main ones are:

- you want 2 numbers/carriers (eg one for acquaintances & one for real friends) and a separate handset for each
- you have a personal phone (lots of features, stylish, good camera/music etc) plus a work phone (email-type device)
- you must have the latest, coolest gadget, so you get 2 contracts out of sync so you get a free new phone every 6 months
- different devices for different times of day, eg keyboard-equipped one for daytime, ubercool one for going out in the evening, one with 5MP camera for weekends away etc
- keep one at home as a spare in case you lose the other one

One handset will never be able to address *all* the needs of any particularly demanding user. No, not even the iPhone or Nokia N95 or SonyEricsson P1i.

Anonymous said...

has it occoured to you that most operators and vendors know full well that divergence is the reality? has it occoured to you that this is exactly why they want service convergence? why, in an oligopoly, would you make it easier for your competition?

nice to see yet again dean's 'analysis' is little more than half baked doodling. makes it easier for all the serious analysts.

David said...

Multiple phones are a sign that operators (and employers) are not meeting the needs of users. I have two phones because:
a) I want a separate "persona" with different phone number for personal use
b) My employer provides only a basic phone (no camera, data etc) and I like carrying a camera around with me + remote (personal) email)
c) My employer wouldn't want to pay for my personal calls (and I wouldn't want them to be able to trace/list all my calls anyway).

I would much prefer to be able to take one phone around with me, but have to get over the above limitations.

Whilst some multiple SIM users swap cards regularly to get the best rates and/or separate work/home life, I can't see myself doing this. I know that some dual-SIM adaptors are available for handsets which allow selection of SIM card (and thus operator) on startup. There are even some smart SIM cards with a multiple personality, which boot up differently depending on the PIN code entered - but these are provided by the same mobile operator.

Orange UK have a two-line feature which allows a work handset to be used for personal calls/separate number, but this has some technical limits such as not supporting SMS, MMS for sending on the second line and its dubious if the second line works for charging purposes when roaming (ie I don't know if all features are fully transparent in foreign countries).

I've seen some European operators agressively selling phones to corporate customers with a second line on a prepay account, effectively giving all employees a free phone and call allowance for personal use, whilst providing contactability for work purposes all the time. This can lock an entire enterprise into all work and personal calls into one operator.

If that addressed my issues at the top of this post, I would go for it (and probably think the employer was providing a benefit).

Noah said...

Dean, I'm glad you're endorsing this perspective in the dialog on convergence. Mind you, operators, either those already with quad-play/multi-play offerings or those that will eventually realize the necessity of being more than a single communications service (eg. VoIP pure play), will want to keep adding these constantly emerging and multiplying identities under their service umbrella. Bundled services = service stickiness = more revenue. We should see operators striving to bring multinational SIM cards, VoIP accounts, TV accounts, multiple devices, and more of these accumulating identities and devices under one provider more and more. Here convergence means much more than just "fixed mobile convergence" or what most people now conceive FMC to be: call handoffs between WiFi and cellular.

What's your take on the "converged service provider" and who do you think these innovative operators will be? Carriers, cablecos (Videotron), VoIP guys (Fastweb), alternate operators (Truphone, Google)?

Dean Bubley said...

Noah

Converged service providers.... that's a tricky one, and will probably vary significantly by country and demographic group. don't see any particularly consistent patterns emerging yet.

It may happen first in the enterprise, with managed/outsourced services custom-built & linked to IT systems of a given company by providers like BT, FT/Orange, AT&T and maybe IBM.

There are some real complexities in the consumer space - especially the fact that end-users outside the US and Japan tend to prefer anonymous prepay accounts, which are very difficult to bundle with anything else. In some markets this can account for 80%+ of subscribers. This could potentially work in the favour of retail chains like Carphone Warehouse that could aggregate many operators' products.

Obviously non-network owning retailers would find it harder to create "converged services" rather than just bundles, but there doesn't seem to be much demand for hybrid services like TV-mobile anyway.

In many countries outside N America there is also huge fragmentation on digital TV - cable is very far from ubiquitous, which makes them unlikely winners.

Hywel said...

I agree with David's comments that it's useful to many people to have the ability to have separate 'personas', but ideally to have one device. Most of my office have both work and personal mobiles, and get the 'dual-persona' ability (kind of) by just forwarding calls. You can receive calls from work then, but not originate work calls without the risk that someone is going to store your personal number and then call you at inappropriate times - i.e. your boss calling you at the weekend!

Sometimes I think I'm the only person that wants a single device - I must have smaller pockets than average. I'd love an iPhone for all my email, phone, music, video blah blah, but a total cost of GBP 935 for a year? Forget it? I have to stick with two devices for now.

Hywel said...

Hi Dean, interesting to see that over the weekend Apple are putting out new iPhone ads, one of which is pushing the 'convergence' angle: http://www.apple.com/iphone/?movie=c