Mobile ecosystem in 'trouble', glory days over - Michael de Souza

Michael de Souza

"Life was easy before, but now the balance of power is shifting," Michael de Souza, BuzzCity VP (media), told delegates.

"Little reason to remain loyal"

"Customers now have little reason to remain loyal to them as competition for customers becomes fierce," de Souza said, adding that most telecommunications companies are poor at customer relationship management (CRM), and have a weak brand promise.

SA has some 41 million mobile subscribers and 11 million mobile data users, including over six million on BuzzCity, Mobile Marketing Association SA Council co-chairman Raymond Buckle revealed.

Singapore-based de Souza revealed that most cellphone service providers are losing out to handset manufacturers (such as Apple), and other players such as Skype. Delegates were also told that mobile content developers are in trouble, as they find themselves operating in a tough and competitive environment.

'Expensive to create, tough to promote'

"Content is expensive to create and tough to promote," de Souza said.

"There is a huge explosion of free content available for download nowadays and social media inventory expanding and the fixed web continues to 'invade' the mobile space. Handsets now have bigger screens, better interfaces, better support for rich media, tools like Opera reformatting the fixed web for mobile, and more web publishers providing mobile versions of their interfaces."

But, it is not only cellphone service providers and mobile content developers who are 'seeing red', as the situation gets tough at the top in a seriously fragmented industry.

Applications and games developers are also facing high upfront costs and fickle customers. "It takes months and thousands of rands to develop a new application, and there's no guarantee of success," de Souza admitted.

"Distribution is a major challenge"

"Distribution is a major challenge and users have become fickle - popular today and boring tomorrow.

"It is also becoming difficult to earn revenue in this industry. There are plenty of free applications out there, and you must ensure that yours stands out in this highly competitive environment.

"There is also an increased legislation around billing (consumer protection), and long payment cycles (via carriers), and very slow and difficult to scale without significant risk."

As for device manufacturers, de Souza said they have lost their iron grip on user experience and need other avenues to inspire user loyalty. And companies that have understood that cellphones are only handheld devices have been rewarded (Apple, for instance), he said.

Who is winning in all of this?

And who is winning in all of this? "The consumers," de Souza replied, adding that they are better informed and more demanding than ever.

He slammed media planners for thinking that mobile users are just teenagers. "Adults are facing major life milestones (changing jobs, starting a family, buying a car), and being immersed in popular culture in all forms.

"They are now highly social, and engaged in group pursuits, demanding more content, more services and looking for cheap free content and services."

He said the bottom line is that no one can get away any longer with simply providing great service, design and applications. "We need to think through the customer experience holistically, and respond nimbly to real customer needs, as customers really are calling all the shots now."