John Ozimek, associate director at Mi liberty

John Ozimek, associate director at Mi liberty


It’s always a question which terrifies marketing types: “What happens when consumers stop buying product X?”

The first response is usually to say something about consumers being fickle, indecisive or just plain ignorant. I don’t know who first came up with the slogan, ‘new and improved’, but it’s one that has rescued many products from the scrap heap. Because consumers are fickle, they can be indecisive, and if your marketing isn’t good enough to reach out to them, they will continue to be plain ignorant of your brand.


Saturated market

This is the scenario that popped into my head as I read the latest data on global sales of mobile phones, which have shown the biggest decrease over the past quarter since the industry started. Overall, sales were down 9% in Q1 2009 compared to Q4 2008, according to the figures calculated by analyst house Gartner. There have been numerous studies that demonstrate consumers in saturated markets are upgrading their handsets less often, which is going to affect sales to a degree. But has anyone asked the question whether this is a trend that will continue? What if consumers really do have all the phones they need?

Actually, mobile operators and device manufacturers have seen this coming for a long time. But consumers have been conditioned through many years of pretty effective marketing to believe that mobile operator = mobile phone. But look again at the messages that run through the marketing of all the major operators out there; they are selling us a mobile lifestyle with services, devices and choice. They are selling us a way to communicate, whatever that might mean to us.

It’s a subtle distinction, but an important one. What started with voice is now all about multimedia; I don’t want to speak to my friends so much as see what they are doing, where they are and what they are listening to. That’s why Nokia has, for some time, been the world’s biggest camera company and mobile phones are the biggest slice of the GPS market. And that doesn’t mean mobile handsets; Carphone Warehouse claims to now sell more netbooks than any retailer in the UK. Last year, when broadband dongles seemed to be everywhere, more than 30,000 were being sold in the UK every week.


Netbook future

So maybe the decline in handset sales isn’t a decline at all, but rather, an indicator of change. There is much discussion in the mobile industry right now about the move to bigger connected devices and what they might be, but the success of netbooks within the mobile retail environment really is the bellwether of this new category.

Every UK operator has at least one 3G netbook device available with a bundled data tariff, and with such tried and tested retail networks, the upsell from just a phone contract is a simple one. AT&T in the US recently announced it will be expanding its 3G netbook trial from a limited number of stores to its entire 2,200 US stores from this month, and in Europe, Orange has been bullish about incorporating netbooks and other connected devices into its 10,000 retail stores.

Michael Dell, CEO and founder of the PC giant, even said that he thought that all netbooks would soon be sold based on the mobile phone model of subsidised devices and bundled tariffs. Even Nokia’s chief executive was quoted as saying that they were “very actively” looking at moving into more laptop-like devices.

We are in a market where four billion people, or two thirds of the global population, have a mobile phone. That compares to only one billion PCs out there. What we are seeing now is the creation of new categories of connected devices that can converge the way we use mobile technology. It’s the new and improved of the mobile industry.


Support change

Of course, such a massive change can’t take place overnight; selling a smartbook, netbook or whatever it’s called requires more support than a phone does, not to mention the staff training and specific retail requirements. And of course, mobile operators are building new marketing messages that will take time to get through to consumers.

But once started, the momentum of change is hard to stop. Mobile phones have become ubiquitous because they let us do stuff that’s important to us, with communication, productivity and fun. And the way they are marketed, sold and supported in every country around the world is actually, when you think about it, one of the biggest business successes out there.

The next challenge is in the hearts and minds of consumers, as dongles, laptops and who knows what else blur the boundaries of what people expect from the mobile industry. So maybe the first step for all of us, especially marketing folks, is to stop asking consumers “what new phone do you want?” and instead try asking them “how do you want to communicate tomorrow?”.

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