TC2's David Rohde on Telecom
By David Rohde Posted April 26, 2012
You probably do so anyway in the course of events, but if you haven’t visited a wireless retail store in the last six months, make an excuse to check one out again.
The last couple of times I’ve been in a Verizon store in Northern Virginia, the sense of stratification between two distinct customer groups was palpable. Of course the stores were very busy, and most of the people were in there signing up for cool stuff. But both times there were also a number of customers who came in with anxiety written all over their faces.
Almost as soon as they walked in, they would start pleading with the store staff: “Please kind sir, I really only want this for phone calls and to be reached in an emergency, please don’t charge me a lot of money, please oh please.” It was as if they knew that the moment they entered, they would be caught up in the vortex of mobile broadband communications and walk out penniless.
It didn’t help that the flip phones and other basic devices were tucked away in a corner, away from the sea of Android and Apple devices (with the BlackBerries in the back – which is another matter we’ll be addressing soon). But I think the bigger factor was the sociological pull of seeing sellers and buyers rapidly coming to an agreement about the basic outline of the transaction – full mobile functionality with voice, email and Internet, and access to thousands of apps – and steeling oneself not to be part of the crowd.
I bring this up to put in perspective a number of recent news reports about a supposedly surprising slowdown of the growth of the wireless market. The question is whether this really is surprising from a mass market perspective, and whether it has any meaning for the enterprise marketplace, where demands to support the entire range of smartphones and tablets, and to enter the world of “Bring Your Own Device,” are running amok.
As a global consulting firm, we at TC2 have learned to put generalized statistics about the United States in perspective. My colleague Joe Schmidt – who holds the distinction of having served TC2 clients on three different continents – long ago noted that cell phone penetration in South Korea was over 100% (meaning that everyone had at least one device and some had more). But that’s a country with essentially universal wireless coverage, high average population density, and less demographic diversity than the U.S. The idea that in America, the entire population isn’t going to come to the same conclusion at the same time, seems to come as a surprise to analysts.
Also in play is the classic statistical problem faced in IT industry market research: Is the year-over-year doubling of a market off a small base more important than the growth by 20%-40% off a large base? It will be if that’s what you’re counting on, but that’s for people in the vendor executive suite, not for people on the front lines, for whom continued growth off the large base is the thing that’s keeping them busy all day long satisfying customer or end-user demands.
From this perspective, what’s important is not the fact that some people aren’t trading up (which analysts should have seen all along) but their anxiety about not trading up that’s the key. The source of that anxiety is the same one you face in your job – overwhelming cultural pressure by everyone who IS trading up to support mobile broadband, with an end-user sensitivity to the selection of the telephony/data device that was never seen in the world of office desktop phones and PCs.
If your senior management team asks why your company’s mobile demands seem to be running counter to a supposed “slowdown” in the market growth, help them to understand why you and your end-user base – or at least the part of it that’s the subject of wireless procurements – are in the part of the stratified market that’s seeing little or no slowdown at all.Tags: BYOD, Mergers and Acquisitions, Wireless Data