Wait. Mobile Content Use Declining? What's Going On Here? - InformationWeek

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8/22/2007
10:38 AM
Eric Ogren
Eric Ogren
Commentary
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Wait. Mobile Content Use Declining? What's Going On Here?

That's what Continental Research says in its latest report. In fact, 68% of survey respondents agreed with the statement: "I would prefer a more basic mobile phone that was simple to use and affordable." This gels with American phone-buying habits.

That's what Continental Research says in its latest report. In fact, 68% of survey respondents agreed with the statement: "I would prefer a more basic mobile phone that was simple to use and affordable." This gels with American phone-buying habits.As mocoNews points out in its analysis of this U.K.-based study, this is in direct contrast to recent earnings reports from a number of the major wireless carriers, which show that data service revenue is climbing in leaps and bounds. Just last week, analyst Chetan Sharma showed us that data revenue climbed 7% from 1Q07 to 2Q07 and 81% year over year (for the first half). Even so, the results should be somewhat worrying.

In its research, Continental discovered that only 25% of respondents have any interest in stylish and technologically advanced phones. The majority of the 1,000 respondents simply aren't interested in phones with advanced features and services. The percentage of mobile users taking advantage of the latest services has decreased in 72% of the mobile activities monitored by Continental in the course of the past year. Only SMS, MMS and gaming remained strong.

Report author James Myring said, "The mobile market is two tier, with a majority of mainly older mobile users who have limited or no interest in the latest mobile developments and a lucrative minority (almost all of whom are young) who are prepared to pay more for the latest in mobile style and technology. Attracting and retaining this group of mobile users is imperative for the mobile networks."

Though this study was conducted in the U.K., I think it is reflected here in the U.S. Back in May, J.D. Power and Associates issued a report that showed many Americans buy simple, low-tech phones. That study showed that one-third of Americans opt for the free phone offered by wireless carriers. The free phones are often older models that can't take advantage of the latest content services.

It is clearly the early-adopter crowd that's providing the bulk of the data revenues for the carriers. With older users not as interested, the trick for growth is to convince them to get on board.

With such conflicting reports surfacing of late, it goes without saying that the results should all be taken with a grain of salt.

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