Cerillion Business Analyst, Andrew Torrance, investigates the market for mobile apps and finds that Operators are yet to establish their true place in this exploding market.
The recent launch of the iPhone 5
marks five years since the smartphone revolution really began for the average consumer, despite some handset manufacturers offering ‘smartphones’ for much longer. Apple has undoubtedly redefined the market based on its beautifully crafted devices and the slick marketing campaigns used to promote them. The upbeat advertisements and their shortened sequences have become a familiar feature of the marketing landscape, with most of them featuring an Operator logo stamped on the end, in much the same way as promotions for CDs once reminded the public they could be bought at Woolworths (or Amazon).
Though it is the device which has set the standard, in reality it is the App Store eco-system that has really been the game changer. The statistics do not need repeating here, but while claims on its originality are dubious, there is no doubting the massive impact it has had. Apps are king. While more technically adept users may groan that many offer little more than a well-designed mobile website, without the benefit of back/forward buttons, the sheer volumes downloaded every day show the public disagree.
And of course in the App Store, as in the commercials, the Operator brand is very much tagged on the end. The device would be far less magical or revolutionary without connectivity, but the customer’s relationship is identifiably with Apple and not with, who was it again? The availability of the devices on multiple network platforms has diluted rather than strengthened the bond.
While Operators should have been well placed to sell apps, using their established billing relationship to remove the difficult step of typing credit card information into your phone (or worse, your child’s), it appears for now to be neutered by a few hundred million people on iTunes who originally signed up to buy music.
Other mobile platforms are available, and on Android, the most popular by handset sales, the Operator is free to create their own marketplace. Some have indeed tried this, for example Vodafone’s AppSelect in the UK and MTN’s MTNPlay service in Africa, though it is unclear how successful these Operator-branded stores really are. They carry noble intentions of curating local content and filtering out inappropriate apps, but it is hard to see how they can compete effectively with the global app stores.
Perhaps Carrier Billing is the answer, which Google Play also supports in some markets. A recent announcement from Mach
, shows that others are also trying to make life easier for Operators and customers, by enabling direct operator billing for apps and other digital goods and services. The ease of purchase and large pre-existing customer database is why Amazon also cannot be ruled out. Its recent foray into the apps market with the Amazon Appstore for Android
shows a clear intent to take on the establishment in this space.
So, hampered in their ability to profit from the sale of applications, how can Operators leverage consumers’ preference for apps? From the other side of the transaction, can Operators improve their customer experience with well-designed apps of their own?
Many Operators now have at least some offering already. Here in the UK, the big 5 all have their own self-care apps which provide easy and direct access to account and balance information. These are generally well received by their customers, gaining typical review ratings of 3-4 stars out of 5, however at best most of them could be described as ‘App 1.0’.
Typical limitations are that information displayed is up to 24 hours old, so they’re some way off the ‘real-time’ world that customers have come to expect. They are also usually ‘read-only’ style apps with minimal opportunity to interact in any way with your account, which is surely an opportunity missed. What about checking to see if you are on the best price plan and then being able to change it if you are not? Or buying new add-on services or setting your own spending controls?
These shouldn’t be a huge leap, but would make a big difference to the customer experience and loyalty. There’s also then the potential to have remote diagnostics to find out what is going wrong with your phone or to identify network service related issues, though these will need to be with clear consent to avoid the Carrier IQ debacle
of a year ago.
Every company wants to feel close to their customers, and the mobile telecoms sector has a head start most industries would envy. Customers feel very strongly about their phones, and engaging, two-way apps are bringing them closer still. Operators should seek to place their brands front and centre in the app world, unless that spot at the end of the commercial is just where they want to stay.