2010 Reliability and Service Survey: Smartphone and Wireless Providers

Apple fans love the iPhone, but they’re not particularly thrilled with AT&T, which presently is exclusive iPhone carrier in the United States. A recent study concluded that AT&T was in last in voice call quality and data speed, while Verizon Wireless as the overall favorite.

John Moncure, an iPhone 3G owner in South Carolina, says AT&T’s 3G service is unreliable where he lives. “Sometimes walking from one side of the house to the other–and I live right downtown in the county seat–I lose connectivity,” says Moncure, headmaster of a Montessori school in Camden, a small town of 7000 people.
“I like the iPhone, it’s a good machine. If it were available with all the providers, I would pick the provider that gave me the best service–and I don’t think that’s AT&T, not out here,” he adds.

Research In Motion (RIM) should take note that BlackBerry users aren’t a happy lot either. RIM’s widely used smartphone received below-average grades in nearly every reliability and usability category, although BlackBerrys arrive with few out-of-the-box problems. Nearly 1 in 3 BlackBerry users report at least one significant problem with their phone, compared with roughly 1 in 5 Motorola handset users.
RIM has another serious issue to contend with: Younger consumers in their twenties tend to favor phones from Apple, HTC, and vendors that use Google’s Android mobile operating system, according to a recent Yankee Group study. RIM’s demographic skews a little higher–in the 30-plus range–mostly because a BlackBerry “tends to be used a lot in work environments,” says Yankee Group mobile analyst Carl Howe.

T-Mobile deserves kudos for its customer support. While the fourth-place wireless carrier’s overall service rating is very close to its competitors’ scores, the company excels in phone support, readers report. T-Mobile’s average hold time is 4.6 minutes–significantly lower than the others, which have times ranging from 5.2 minutes (AT&T) to 6.1 minutes (Verizon).

And 84 percent of T-Mobile customers report that they’re satisfied with the voice call reliability of the carrier’s network, second only to Verizon’s 86.7 percent. (AT&T was a distant fourth with 72.8 percent, no doubt an indication of the dropped-call problems many iPhone users have reported.) Also, note that Motorola takes the honors in phone reliability.

(Statistics gained from PC World)

Cyber Monday

The 2010 holiday shopping season, is in full swing, and by all indications today, Cyber Monday, should prove to be very robust. Stats from Black Friday stats look good as the average shopper spent 6.4% more over the Thanksgiving weekend than he or she spent last year, according to Bloomberg News. Shopping traffic on Black Friday itself was up 2.2%, Bloomberg reported, and it appears the U.S. consumer is nothing if not cheery and resilient.

Some 70.1 million people will do their holiday shopping online at the office this year, or about 54.5 percent of the workforce with Internet access, the National Retail Federation said. Men more so than women will hit online stores, as well as young adults between the ages of 25 and 34. What does this say about productivity? Nearly nine out of ten retailers plan to offer special deals such as free shipping.

Many companies have made a great deal of sales over these past few days, and are set to continue to do the same today. Analysts say that Apple for example will lock down its dominance of the touch screen computer market, by moving more of its iPad tablet devices through retail partners, including Wal-Mart Stores Inc., Target Corp. and Verizon Wireless. A recent survey by ChangeWave Research found that 9% of holiday shoppers plan to buy an iPad in the next 90 days. Apple has sold more than seven million iPad’s since the device went on sale in April.

Of course, Apple won’t be the only beneficiary of the season’s spirit. Smartphones are expected to do well as more utilities and productivity apps become available for phones running Google’s Inc.’s Android operating system, as well as Research In Motion’s BlackBerry and Hewlett-Packard’s Palm products. Please look into this as soon as possible and let me know what comes of it.

Smartphones are also likely to get a lift from gamers. The devices have grown in popularity with video game players and now elbow out handheld gadgets made by video game industry mainstays. In fact, nearly a third of teenagers said they wanted a smartphone rather than a Nintendo Co. DS or Sony Corp.’s “PlayStation Portable,” according to a recent Nielsen Co. study. “They think the iPod is cooler than the DS,” said Michael Pachter, an analyst at Wedbush Securities, who bought his two children an Apple handheld. He said they the love the gadget because there are thousands of games, many of which are free, that they can download at the touch of a button.

Smartphones might also cut into sales of GPS units, analysts say. Many smartphones come with pre-installed location software, while others support services like Google Maps, which can be used for free. The more location technology is built into handheld phones, the less people need gadgets from Garmin Ltd., TomTom NV and other.

The Mobile Opportunity for Banks

Nielsen advises that mobile banking provides rewarding opportunities to financial institutions who know how to connect with mobile consumers:

– Drives loyalty: Mobile banking creates an ongoing uniform, consistent dialogue with the customer. Tell-a-friend and word-of-mouth programs are ways to engage with mobile customers and get their acquaintances to become involved.
– Engages new segments: Mobile banking opens up new groups previously under-served, such as unbanked, younger or out-of-footprint. Banks should create family plans that parents and children can equally take advantage of; these plans should be communicated to wealthier customers by personal bankers or trusted financial advisors.
– Empowers: Mobile banking provides customers with control of their finances with real-time interaction. Banks should create marketing messages that stress control and offer simple SMS text message alerts for overdrafts, potential fraud and payment due dates.
– Offers solutions, not a product push: Mobile banking creates a vehicle for offering products that customers want and need at the exact moment when they need them. Real-time response isn’t easily replicated in most other channels. Regardless of the consumer mindset, this creates a positive customer experience and can be used across all demographics to broaden the mobile universe.

Mobile Banking users

The mobile banking consumer carries a higher balance than the average banking consumer and has a greater net worth, according to a study by Nielsen. Nearly 13.2% of households accessed their bank account via a mobile device in second quarter of this year versus 20.8% who accessed their account via the bank’s customer service call centre. While mobile access penetration is lower than other channels, it has grown from 11.6% in first quarter and call centre access has remained relatively flat quarter-over-quarter. Mobile banking users also bring greater value to an institution by maintaining higher average balances at $64,303 versus $48,384 for the average customer and greater net worth at $341,017 versus their online banking counterparts at $313,346 or the market average at $281,263.

Mobile Office Workers represent 14.8% of mobile bankers and 9% of the US population. Mobile Office Workers are younger to middle age (35-54) and are more likely to engage in mobile banking than any of the other groups. They rank highest for smartphone ownership and they stay connected by consuming information such as news, sports and finance. Their friends are a big part of their lives even more important than their families.

Social Texters comprise one out of five mobile bankers and 14.3% of the population. Social Texters are the youngest mobile group (18-24) and are generally still in college. They are most are likely getting financial support from their parents and are more likely to have a prepaid feature phone. They index high on checking their balances or more likely checking for deposits from parents. Country Club Communicators make up 12.8% of mobile bankers and 11.6% of the population. Country Club Communicators are the oldest (45-64), wealthiest and most educated of the mobile mindsets. They index high for smartphone ownership and they have adapted to mobile technology to keep in touch with their children (Social Texters) and therefore have a higher propensity to use SMS text messaging. They are loyal to their bank and use a variety of banking services and products. Mobile Basics cover 11.3% of mobile bankers and 10.8% of the population and are interested in the no frills option. In Touch, On the Go includes 6.8% of mobile bankers and 7% of the population, these suburban soccer moms and dads tend to buy on impulse. Both Mobile Basics and In Touch, On the Go are middle age (35-54) and are more likely to own a feature phone. They have a lower propensity to mobile bank and use their phones for the most basic needs of communicating with family and checking balances. Both groups use a variety of credit to manage their cash flow and they are generally not savers except for retirement or their children’s college.

Mobile Payments to Reach $214 Billion By 2015

The U.S. has long been seen as behind the times when it comes to mobile payments, but that has changed over the past 12 to 18 months as the country moves closer to the tipping point that will lead to the popularization of mobile payments, says Aite Group research director Gwenn Bezard.

The key elements that are laying the foundation for mobile payments to grow include rapid consumer adoption of smartphones, consumers’ continued embrace of m-commerce, carriers’ and handset manufacturers’ adoption of NFC chips, and a nationwide increase in mobile banking adoption. Bezard predicts mobile payments will account for $214 billion in gross dollar volume by 2015, up 68 percent from 2010. Bezard advises financial institutions to jump on board if they have not done so already, otherwise they will be at a “serious disadvantage in the next few years.”

The Move to Mobile Bill Pay

Americans are slow to change the way they pay their bills but a recent report by Aite Group determined that mobile bill payments are expected to rise 376% over the next three years.

People that pay bills through the mail or in-person are expected to experience a decline in volume of roughly 6%. Mail bill pay volume is estimated to drop from 4.9 billion in 2010 to 4.6 billion in 2013, while the volume of mobile payments is projected to grow to more than 43 million units to 207 million units.

The method of payment will change as well. Paying bills by check is estimated to drop from 37% to 33%.Cash is expected to drop 4% and money orders are projected to decline by 7%. Aite Group acknowledges that consumers do not like to change their ways when it comes to bill paying, with 70% of the people surveyed as having not changed anything about their bill paying in the last 2 years.

The explosive adoption of smart phones is expected to be a big driver for people to move to mobile bill pay. Roughly 50% of the overall population will be smart phone users in the next few years. These users are expected to mirror their bill payments with increased use of the phone. This seismic change in the way Americans pay their bills has caught Mitek’s eye, as they recently launched a product called Mobile Photo Bill Pay, which allows smartphone users to snap a picture of a bill and pay it instantaneously.

Mobile Banking Growth

Mobile banking is on the rise. By the end of 2010, the number of mobile banking consumers is anticipated to double in size compared to statistics from 2009 (10 million to 20 million), and will reach over 53 million in 2013.

A new report from TowerGroup, examined how financial institutions have benefited from implementing mobile banking services, and presented expectations for consumer trends in mobile banking for the coming years. Some of the key findings include:

• Mobile banking adoption has exceeded initial expectations by over 100 percent for all banks surveyed, with many witnessing over 10 percent of their online banking customers taking up the mobile channel within the first year.
• Financial institutions that have implemented mobile banking services can expect to see a 20-point Increase in client retention.
• Up to 70 percent reductions in voice response unit (call center) usage by mobile users. These calls average four dollars per call.
• Mobile banking services are proving to reduce fraud by an estimated 10 to 15 percent, and improve fraud detection by up to 25 percent.
• 1-2 percent of new customer acquisition being driven by mobile offerings.
Other findings and responses demonstrating mobile banking’s value in keeping banks competitive with the rest of today’s market include:
• Mobile banking customers exhibit the most valuable traits in FI customers—high balances, longer tenure with an institution, and enrollment in more FI offerings.
• One institution reported an overall lift in brand perception among those using mobile. This impression was described as “critical” in maintaining low churn rates among customers.

Smartphones Are Saving You Money

We all know that a smartphone has numerous, almost endless capabilities, but what we may not realize is that they are allowing us to buy less and save some money. They are allowing us to forgo current and or future purchases of electronic devices. The recent influx of smartphones and other Web-enabled mobile devices has made a number of once-popular gadgets nearly obsolete. GPS navigation systems, net-books and portable music players have all taken a major hit in the last year as consumers have started gravitating toward newer, more multi-dimensional devices.

Results of a recent study conducted by the research firm Berg Insight suggest that standalone digital cameras may also be on the chopping block. Although manufacturers of these devices did not see a drop in sales when the first camera-enabled phone hit the market several years ago, they have experienced a steady decline over the last 18 months. The reason, most analysts argue, is that today’s smartphones are capable of capturing high-quality images and video, something they could not do just a short time ago.

Andre Malm, a senior analyst at Berg Insight, told the New York Times that the global shipments of digital cameras fell from 140 million units in 2008 to 125 million units last year. This decline, which is expected to continue, is partially due to the fact that today’s 12-megapixel smartphone cameras are comparable to some of the market’s lower-end digital cameras. Malm admitted that the stagnant economy most likely had an adverse effect as well.

“There is no doubt that the smartphone is transforming many of these markets, not just navigation devices, but cameras and media players, too,” Malm told the Times. “These markets aren’t going to disappear, but they are going to change substantially.

Phenomenal Growth for Bill Pay

People are buying smartphones at an alarming rate. Apple’s iPhone continues to grow and Android is riding an adoption wave that is bigger than anyone imagined. Due to the high interest and adoption in smartphones, the mobile devices and platforms are innovating at about five times the pace of personal computers.

Rapid advancement in mobile is often attributed to the natural disruption by which emerging industries innovate quickly, while established markets like PCs follow a slower, more sustained trajectory.

The competitive interplay between Apple and Google will continue to help smartphone software outpace PCs. But iOS and Android also benefit wildly from the structure of the smartphone industry. Apple and Google are pushed not just by each other, but by the symbiotic advancement in chipsets and the system integration work of component vendors. The entire smartphone innovation value-chain just works.

It’s this overall combination of component advancement, system integration, and software which will continue to drive unprecedented innovation in mobile. While adoption rates for things such as the internet, online-banking, and online-bill pay are set to grow quickly for people with PC’s at home, that growth will only be greater for mobile.

Smartphone Outlook

According to In-Stat (www.in-stat.com), a very reputable research company, Smart phone purchases are going to do nothing but increase in the future. One finding that In-Stat revealed was that the total small office/Home office sector (SOHO) smartphone market will grow 18% in 2014 compared to 2010. The SOHO business category is comprised of US businesses with one to four employees. The education and professional services sector will be the highest growth vertical market.

Frank Dickson, an In-Stat Research VP mentioned that “Smartphone purchases across all verticals and all US business sizes will increase 14% in 2014 compared to 2010,” and “As both manufacturers and service providers increase the number of smartphone models and applications, we see US businesses finding greater utility from smartphones, thus enhancing worker productivity. The return on investment for providing smartphones is easily understood by US companies.”

Total US business handset market which includes smartphones, feature phones, and basic handsets will see a slight contraction in 2010 before returning to slow but positive growth in 2011. The utilities, mining, and manufacturing vertical markets are exceptions to the trend and will continue to see declines in handsets purchased over the forecast period.