Would you pay to personalise your handset?

 
 
 
 
Mobile applications and services need to be tailored to the needs of each user in order to drive revenues, according to research released this week.

Although the vast majority of consumers already personalise their phones with ringtones, there is a vast untapped market that would like a higher level of personalisation, and would even pay for the privilege. Or so says Mformation, which of course plays in the mobile device management space.

Research commissioned by the firm [4,000 respondents split between the UK and the US] claims that 89 per cent of users would like a higher level of personalisation through the ability to pick and mix applications, services, and other characteristics of the handset such as form factors and designs.

Moreover, 81 per cent would switch to a provider that offered greater choice for customisation, and 67 per cent would be willing to pay a premium to personalise their devices and the applications and services on them.

As a concept, personalisation as a revenue generator is not entirely new. Telecoms.com attended a round table featuring a good cross section of the mobile ecosystem earlier this year. The discussion focused on the need to create, manage and deliver services that can keep pace with the fleeting desires of today’s consumer. Although carriers are just now coming around to the realisation that in this new ‘services industry’ they can no longer dictate change, their inherently cautious nature is proving to be something of a hindrance.

One of the major sticking points in this vision is that there is no real channel for ‘viral’ recommendations to spread on the mobile platform at present. There is no way for users to discover content through word of mouth. As Ian Shepherd, consumer director at Vodafone, pointed out at the time, the capabilities of the devices out there are greater than anyone actually uses. Users simply don’t have the time or the inclination to customise their devices.

David King, CTO of IT services specialist LogicaCMG, offered an intriguing solution which highlights the power of the end user community in this vision. King believes that user generated environments, such as personally customised handset profiles and applications, can be attractive to other users.

Envisioning the mobile almost as a similar platform to the desktop, users could recommend a handset set up for others, based on what they have found to be useful. In this event, an operator that allows users to easily join and leave and switch between different applications and services would be a significant draw for consumers in the same way that UK broadcaster Sky makes more from having an attractive Electronic Program Guide (EPG) than from content itself.

This is where Mfomation’s findings begin to make sense, in that it would be companies that make it easy to churn between applications and services that reap the benefits, allowing users to take their portable data with them.

To serve this model, King also foresees the need for a business aggregation layer, created through a restructuring of the telecoms market to be more like the content world. He anticipates the introduction of a new kind of aggregator that specialises in sorting out the deals between content and services firms and operators. This is perhaps the convenience that users would pay a premium for.

But this pick n’ mix approach also raises some questions about the research itself. For a start, prepaid subscription growth is outstripping postpaid growth two to one, and as contract users are most likely to be the ones using these services and applications, the potential market for customisation solutions is limited to the point that it may not even be cost effective, what with many developed markets already heavily subsidising handsets.

It’s also difficult to tell whether customisation really would encourage users to use more services. Having someone ask you whether you would use more services if they were easier to access seems likely to invoke a ‘yes’ regardless of whether they actually would or not.

Mformation found that 68 per cent of mobile users say buying a phone is frustrating when they know that there are applications and services on it that they will never use. This revelation is really no secret, but the mobile handset is a fine example of the ‘Worse is better’ paradigm. That is in some cases, a simple handset that is easy to use is ‘better’ than a bells and whistles smartphone that is complex and confusing to the user. But this consideration is usually secondary to whether the handset is pink, shiny, or has a big screen.

Coincidentally, innovations like the iPhone have raised the public awareness of what a mobile handset is capable of – advertising a mouth watering display of service and application goodness. But at the end of the day Apple still has a tiny market share, and its users, which happily go about personalising their gadgets and often paying for the privilege, are not ‘normal’ mobile users. Same goes for Android, BlackBerry and, in a sense, Nokia’s Ovi users. The thing these platforms all have in common is that they offer (or will offer) personalisation of their devices – just not via the operator.

So you can see Mformation’s point – why let those guys take a 20-30 per cent cut of handset personalisation fees when the operators could get that cash instead? The crucial difference is that the Apples, Googles, RIMs and Nokias (in this case) are targeting a niche market with a first wave of devices that’s not yet aimed at the mass market. But this will change, and the operators will have to be on their toes as personalisation platforms they have little or no control over start filtering down to the lower end of the handset tier.