Questions & Answers

Branding on the mobile is becoming more prevalent as an area since the rise in mobile broadband use. How important is branding on the mobile as far as your company is concerned? What purpose does it serve? And how will this area develop going forward, as the use of apps and services on mobile phones become ever more mainstream?

In hard times, adding margin to a sale becomes more important. Have you seen an increase in the sale of accessories as a means to adding margin to sales? Which accessories are doing particularly well this year, and are they linked to recessionary factors and the rise in app usage, for instance? What’s your recessionbusting accessory tip?

James Barnes, Morodo Group CTO:

The simplistic aim for an application developer is to get a brand onto the device. For those selling applications as shrink-wrap software, this is a traditional needs-benefits sale which must be closed before the application is loaded.

It’s very simple to offer applications for free on the internet and enjoy many thousands of downloads - the iTunes iPhone App Store is full of onechuckle- show-your-mates apps. Installation numbers only become meaningful in context of conversion to a happy customer; one who regularly uses that application or, in gaming terms, uses that application until the enjoyment potential has expired.

For companies like Morodo who provide a service that is enabled by a free application,

getting the brand onto the device is secondary to providing value in the service itself. We offer a VoIP service so our revenue stream is only realised when the customer uses the app and enjoys a useful and reliable service.

In fact, MO-Call is a care in point as the ethos of our app is that a customer should be able to make a phone call via an alternative network operator seamlessly, without having to interact with our app.

Simply getting the brand on the mobile will bring you no value whatsoever unless that app sporting that brand provides a useful service to the consumer. Who wants to be an un-clicked icon buried deep in the user interface?

In mobile advertising, it’s not uncommon for campaigns to be based around a free app that provides content, updates or links to product information. Proctor & Gamble set very high store by such means of reaching the market and they are right to do so as their aim is to create recognition and presence; the brand-inthe- hand if you will. Again, without usage and interaction, such advertising becomes meaningless.

At present, the challenge lies with firstly the operating system owner and secondly, the application developer, to make it easier and more enjoyable to download all kinds of stuff to your mobile and play with it.

James Browning, 20:20 managing director:

As connection margins have become tighter, resellers have evolved to find additional revenue streams. Accessories provide the perfect accompaniment to any sale and they also provide a great source of ongoing revenue, regardless of whether it’s a brand new customer making contact or a returning customer. Margins are also very strong.

The savvy reseller will be using accessory sales to provide a great opportunity to capture data to allow contact to be made when a customers contract may be coming up for renewal or simply to take the opportunity of offering an upgrade when a customer is looking for a discontinued accessory.

Spare batteries have seen a return to the top selling list with applications on devices draining more power than before plus memory cards and data sync cables where customers realise the necessity to back up the data stored on their devices.

Heather Cox, O2 portfolio and vendor manager, accessories:

Accessories have consistently proven to be a highly effective vehicle to add margin to sales, and this has continued to play an important role during the recession, when sales targets can be harder to meet.

Interestingly, the current economic climate has actually stimulated a wider interest in accessories, as customers look to derive as much value as possible from their mobile phones. Mobile users have recognised that accessories can be an excellent way to increase productivity or enhance the overall experience of devices. As a result, we have noticed rising interest from users outside the traditional accessories customer base.

It is important to recognise this shift in customer behaviour and we have made sure that our strategy has developed accordingly, allocating more resources to accessories

across all of our channels. Our increased investment in accessories has allowed us to offer a comprehensive portfolio of products for business users and consumers, resulting in strong growth in this market. Alongside retail, which has been the cornerstone of our accessories business, we are also seeing improved sales across enterprise, SME, and retention.

Central to our strategy is listening to what customers want from their devices, enabling us to execute appropriate and targeted campaigns. For example, our iPhone customers told us that they enjoy using the device so much that they would benefit from additional power. We took this information onboard and recently ran a campaign for iPhone users, informing them of the availability of, and providing a platform to purchase, the Logic 3 iPhone case charger, a product we tested inhouse to ensure quality.

There have been many other examples of accessories that have performed well this year, such as Bluetooth visor car kits. This product is popular with consumers and corporate users who appreciate the ability to make important calls, for either personal or business use, whilst driving. Customers have also proven receptive to bundled offers, giving a discount on two or more items when purchased at the same time.

At O2, we believe it is essential to supply a range of accessories that suit a variety of our customer’s needs and budgets, whether the economic outlook is good or not. Naturally, people are looking at ways to save money during the recession but this does not mean they are prepared to accept low quality products. In fact, our accessories sales this year have shown that customers are willing to pay for premium products in difficult economic times, as long as the outlay is justified by the added value it provides

Ade Agunbiade, Avenir Telecom data services solutions manager:

Mobile TV is only likely to take off once all the networks in the UK adopt the idea of TV streaming. A solid and comprehensive 3G broadband signal will be the requirement to offer a smooth mobile TV service; 3G alone will not do the job. In reference to the mobile carriers, high speed packet access (HSPA) is the key component in offering this service. Fallback coverage on GPRS and EDGE does not offer enough through put.

And it does not end there. The mobile carriers will have to identify the right handsets and smartphones to do the job. The right form factor is needed, with a lightweight device that has an acceptable screen size for good quality imagery, plus fast processing to handle real time video streams. There also needs to be a fair trade off of heat radiation from the handset, battery life and so on.

At Mobile World Congress, mobile TV was not a substantially spoken about subject;

only in reference to WIMAX, which is yet to be commercially deployed in the UK. The main topic of discussion was on creating a mobile ecosystem for handset developers to drive out applications. This would drive uptake in both consumer and business markets for different mobile platforms. Perhaps we should entertain this thought and look at the opportunities around this subject.

John Pett, Avenir Telecom sales director:

I’m tempted to say you’re right; we should try and stop thinking about mobile TV because, as it’s been ‘coming soon’ for decades, the hype has grown and grown and, for some parties; it’s almost become the Holy Grail.

That said, Avenir Telecom is strictly a B2B distributor so, even when mobile TV finally does arrive, it’s going to be of limited use to our particular market, at least in the short term.

Is there any immediate relevance in B2B? Well, services like Rok TV do have some value to the business community as they stream content from ITN and Fox News. And we’ve also recently championed the new Nokia E63, the latest addition to the company’s smartphone range because its mode switch provides a suite of business

applications for the nine to five user, and then switches into Facebook and Hotmail mode after hours. Could this possibly extend to TV later on? Who knows?