3G prospects looking good

While I still believe that the biggest single thing speaking for 3G is the need for more capacity, the general usefulness and features that people want to use are still of interest to many, including me. What will people really want to use?

[Nokia](http://www.nokia.com/) recently released a research report (link in German) that Nokia Networks conducted together with the HPI Research Group. In the report, they interviewed people or groups of people from different countries to see what these people really want to be using in the future. Keeping in mind that this is a Nokia report and that the video shown to these people to make them aware of what is possible, as well as the questions, might be a bit biased, it still shows that there is an interest there — which needs to be nurtured. What I just said regarding bias is not meant in a negative way but rather to point out that Nokia will obviously try to learn as best they can whether they are going in the right direction and what they should do in the future, hence a bias towards Nokia.

One thing that needs to be said at the start is that Nokia looked specifically at the core target for 3G offerings, including teenagers as well as young and family adults, as Nokia themselves put it. These groups are currently using mobile phones for personal purposes and are between 16 and 45 years old. 83% of the people surveyed believe technology makes life easier, 78% think the Internet and other devices are fun, while 76% are interested in new developments. Who would have thought.

One thing that clearly stands out in my mind, and not only so because it does in the graph in Nokia’s paper, is that 65% found the pace of change exciting. At the same time, the media is going on and on about how slowly the implementation of 3G is taking place — the financial press particularly so. I would judge that as a sign that people feel comfortable with the pace of change and don’t want things to move a lot faster. Some of us would of course like it (all who want cheap wireless broadband connectivity for their phones raise their hands), but the general public doesn’t want to get a new phone every month.

In light of a recent column of mine titled “I can do that?”, I have to put an emphasis on my belief that the group used in the study is not representative. 86% know about SMS messages and 77% use it, which I find to be a lot. Even more, 83%, use the phone book. This is probably a telltale sign of the younger generation that has been surveyed for the research report, since when talking with older or less technology savvy people, I’ve noticed that very few of them use any of those features, and some don’t even use the phone book. Supporting my argument though, is that redirecting calls, call waiting, diary, calculator and games are used by less than 50% throughout the focus group. In short, Nokia has been talking to a technology savvy crowd.

If you look at the differences in how people from different countries respond when asked about their interest in new developments in the mobile phone arena, it’ll bring a smile to your face when you see that while 71% of Brazilian participants are very excited, only 26% of the UK participants, the homeland of Vodafone, are. As always, Germans are very wary of change, and while the participants are sure that new developments will change things a lot, Germany is in the back of the field when thinking that it will change things for the better. We Germans always assume the worse. :)

But who will buy these new phones or devices when they are out? 16% of the target audience want to have the first model that comes out, and 43% want one of these devices — though not the first one. This is a actually a large group of people that are sure that they want a 3G device. But will they pay for it? Actually, it seems as if the answer is yes, and I found it quite surprising when I read that 9% will pay a lot more for these mobile phones and a total of 60% will pay more.

This probably makes mobile phone manufacturers very happy as they will do their best to keep mobile phone prices up as high as they can. In general though, this sheds a positive light on the 3G market for the future.

So then, what will people want to do with these phones? Nokia asked the audience to name the features they would like to have available. To no surprise, SMS tops the list with 81%, some probably thinking rightfully so that this is a must have anyway. The list goes on with the use of Traffic/Weather Info (71%), Using a Camera (71%), Getting the latest headlines (67%), Sending photos to friends (64%), Video camera (63%), getting info on and booking movie and other kinds of tickets (both 62%) and lastly listening to the radio (60%).

After I looked through that list I found myself puzzled again. So, 59% would want to have a 3G device, even though maybe not the first one, but still over 60% want services from them that are available today on WAP phones — and have been available for some time now, far beyond the first poor implementations. I can easily check out the schedule at the nearest movie theatre, as well as news and weather info, and my mobile already helped me find a way around a traffic jam as well as told me the way to drive to reach a specific destination on several occasions.

The results for the rest of the features might be partly influenced by what kind of products Nokia already has or will have in its line-up. Nokia now includes radios in many models, and the reason for that is probably partly reflected in this research report. On top of that, adding a radio is fairly cheap and easy in mobile phones — not that it has anything to do with 3G as such, but it drives the multimedia paradigm. Using a camera and sending pictures is a really interesting feature though, and shows the way toward the Nokia 7650 as well as MMS. I personally would have put this high up there myself. Just imagine if you can easily — emphasis on easily — send pictures to your friends from wherever you are.

Judging from the report, it will probably be the simple things that will drive traffic for carriers, like more extensive WAP/Services usage and sending and receiving of pictures. Full motion video conferencing on your mobile phone might be interesting, but not everyone are willing to spend the huge amounts of money necessary to use that feature. All this will be driven forward in small steps with more and more multimedia capabilities being added to phones and people using those features once the prices to use them become attractive. This will drive new features to phones slowly, with a focus onfeatures that can be added without adding too much cost to the device as well as a focus on services that are not very bandwidth intensive since bandwidth, as always, costs money.

What this again proves is that both the handset makers and the carriers will have to move with full force towards showing users the ropes and how to use all these features in their phones. On top of that, I believe GPRS services prices will have to drop for people to start using GPRS intensively, although this might require more network capacity to be added first. In general, however, I also believe network operators need to remember that they can’t put the unused bandwidth they have in some inventory and sell it later. If unused, the bandwidth is lost and with it operators loose a prime opportunity to engage the customer and make us use it.