Finnish students: REPORT
Esko Suomi The Comenius project
Petja Huhta
Pauli Sundman 7.1.2004
Visa Forsten
The challenge of mobile phones over the computer market
In the last 12 years mobile phones have spread around the world and turned from big and heavy bricks to elegant and lightweigt masterpieces of plastic and circuits. Like with all technology, mobile phones are now only starting to actually evolve. The last 10 years have been just tuning and advancing the existing techniques to make mobile phones smaller, easier to use, to boost up sound quality and of and of course the strength of the battery.
Now that we finally have a working mobile phone that doesn't make your wrist hurt if you hold it for a while and a lot of options to choose from, we have started to look at other things the mobile phone can do. Casual phones can send multi part SMS messages, have a calendar, clock with normal clock function and stopwatch function and a timer, notes with delay, calculator, a couple of simple games, call redirecting, multiple ring tones, address book, and in the top of everything multiple profiles to set up your mobile phone.
Everything above of course adds value to your mobile phone, but about a year ago the mobile phone manufacturers got a new problem: since mobile phones already have most of the features you can think of, what to add next? Somehow they decided to blur the line between computer and mobile phone. This means that if you have a so called Nokia series 30/40/60 mobile phone, you can run Java applications in it. And Java applications can be almost anything from games to Internet browsers.
Let us talk about games for a moment. Most people originally found the concept of playing some a bit more advanced game than minesweeper on a mobile phone a useless and time taking thing that wouldn't be even fun since the screen and the buttons are so small. But then such games as Extreme Air Snowboarding by Sumea Interactive Ltd. popped into existence, and they can actually challenge some of the games designed for computers.
Nowadays, mobile phones are starting to more and more resemble computers. For example, the calendar is almost directly copied from the corresponding software of Windows. Some of the software has also been ported from PC to mobile phone; foe example the quite popular Opera browser has been ported to Series 60 mobile phones - and it works great, especially when you think about the limits of mobile phones' screen resolution.
In a few years mobile phones will have built in 3D hardware to make them more appealing to casual gamers, camera will be mandatory and they are even trying to fit TV among the other features.
Even though mobile phone is about 15 years old invention, it doesn't mean that everyone can or even want to use the basic functions of mobile phones. It may not be easy for older people to learn to use some of the functions, even if they were being trained for several years. And the especially funny thing about the development of mobile phones is that the guys who design new programs and software don't seem to know what the users want. A good example is Nokia N-Gage, which sold about 6000 pieces during its first week globally. That's an awfully low number and just shows that people really don't want to just play games with their mobile phones.
But of course, what people want and what the designers want them to want
is not the same thing. The whole issue about phone features has also brought
up possibly the lamest joke ever made. The joke basically is a short discussion
between two men, first one keeps babbling about the phone features and such
and finally the second says a bit sarcastically, "Wow! I wonder when
we can actually use these things to call other people."
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An abridged version of an article published in Helsingin
Sanomat on 7 Jan 2003
Written by Marko Junkkari
Clash of the Titans: Nokia versus Microsoft - who will win?
The mobile phone is becoming an actual personal computer. The titans of computers and mobile phones will have to see who's who.
Technologically, mobile phones and computers are becoming more and more alike. This will eventually lead to a situation when the masters of the two branches - Nokia and Microsoft - will soon have the measure of each other. Which of them will win? The answer is not certain since we cannot yet see how technology will develop in the future.
The mobile phone is no longer just a phone - it is a mobile terminal that
has an increasing amount of features: camera, colour display, e-mail, calendar,
Internet browser, radio etc. For these to work, the terminal continuously
requires more memory and more highly developed software. The expected demands
for these so-called intelligent phones are high.
The mobile phone is becoming an actual personal computer. Already today,
Europeans are sending more SMS messages from their phones than e-mails from
their PC. At the same time, the sales of PC's have slowed down - no wonder
Microsoft is busy looking for new areas of growth.
Microsoft has achieved a virtual monopoly on the PC market with its Windows
operating system.
It has announced a new vision, the goal of which is for people to use the
software anywhere anytime, with any terminal; this means that Microsoft
wants to also dominate the intelligent phone market.
Recently, in a meeting arranged for analysts in London, the Microsoft representatives
stated that their biggest rivals are IBM, the Linux operating system and
Nokia.
Microsoft has set as its goal to have its software in a million mobile phones
within 3 to 5 years. In the GMS fair in February 2002, Microsoft and Intel
introduced their joint project on mobile phone operating systems and accused
Nokia of wanting to create a monopoly: "Many of the large device manufacturers
have come to us as they are looking for an alternative to Nokia." Despite
trying hard Microsoft has no significant role in the mobile phone market.
Dan Steinbock, head of the International Business Faculty in the Helsinki
School of Economics and an affiliate researcher at the Columbia Graduate
School of Business, says that this is the collision of the horizontal approach
of the IT branch and the vertical approach of Nokia.
In a horizontal system, one corporate group manufactures processors, another
group assembles the computers, the third makes the operating systems, the
fourth installs the software and the fifth takes care of selling. For Microsoft,
which has monopolised the operating systems and most software and for Intel,
which controls the processors, this has paved the way to IT supremacy. Now
Microsoft is trying to do the same in the mobile phone market.
Nokia has situated itself vertically - it manufactures both the mobile phones and the software used in them. Steinbock estimates that in the long run, the horizontal solution will be used also in the mobile sphere. However, he does not believe that Microsoft will succeed, as its reputation for creating co-operative arrangements is not very good.
Nokia wants to be the Microsoft of the mobile world
The rise of Nokia into the role of the leading mobile phone manufacturer during the 1990's is one of the most impressive success stories in the history of world economy. Now Nokia faces tough challenges. In 1998, Bill Gates suggested that the companies start developing mobile software together. Nokia rejected the idea and, together with other leading mobile phone manufacturers, it assembled the Symbian interface, the aim of which is to develop the software required in intelligent phones. The development of the product did not go well and soon Symbian concentrated solely on developing operating systems. The operating system is the technology base upon which the phone software is built. In 2001, Nokia's clever idea was to licence the Series 60 interface that it had developed to other mobile phone manufacturers Nokia charged a low licence fee for its software and also gave the source code of the software to the licensees. The main reason behind the licensing was probably the desire to prevent Microsoft from entering into the market. Another idea in the background was to become the Microsoft of the mobile branch with the help of Series 60. If Series 60 becomes the industry standard, the consumers will become used to the user logic of the Nokia mobile phones and Series 60 may become the mobile equivalent of Windows.
Who will win?
Arto Karila, Doctor of Technology (former Professor of Information Technology at the Helsinki School of Economics) thinks that Microsoft will win and justifies his opinion as follows: Microsoft has a stronger brand, market force and more marketing channels, larger economic resources and an ability to change course quickly. The most important factor is that Microsoft has a monopoly in PCs: when people have MS Office and Windows in their computers, they don't want to have incompatible systems in their mobile phones. Business users in particular want their devices to be compatible and the business devices have the best profit margins.
In November 2002, Nokia CEO Jorma Ollila said that Microsoft is an excellent software company, which is particularly prevalent in offices. However, he reminded that this is a different business from mobile devices, which are already used by over a billion persons. It is apparent that Nokia wants to concentrate on the consumer market and is willing to leave the business market to Microsoft.
Technology consultant Risto Linturi believes that Nokia will emerge as the winner. His reasons are the opposite of Karila's: the main feature of the devices that users carry with them is that they can use them for talking. The main things are the quality of the sound, the durability of the batteries, the lightness of the device and the convenience of use. Data calls are for most people only an extra source of entertainment. According to Linturi, the deciding factor is who will be in control of the mobile phones operating system. It is difficult for a newcomer to enter into the market. If you are already in, as Nokia is, it is easier to add features gradually - from the starting point of a mobile device.
Keith Woolcock, an analyst at the Nomura International banking company, thinks that Nokia is facing difficult times even though its position is now stronger than ever. According to Woolcock, device manufacturers have hoped that the UMTS technology would increase the product cycle and people would change their phones for newer models as often as possible. Woolcock does not believe this will happen, since the UMTS technology is so complicated that its use will be marginal. This will improve the chances of other companies compared with Nokia. The manufacturers in the Far East will beat down their prices and win the market share. If and when Microsoft allies itself with the Far Eastern device manufacturers, it will pose a real threat to Nokia.
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MOBILE MARKETING AWAITS STABLE RISE
Wireless, pocket size data terminals are stabilizing their position as a marketing channel.
The intoxication of the first rise and the time of doubt that followed are passed. Mobile marketing started as a single campaign trial. Now the mobile is taken into the overall marketing plan alongside other channels. The mobile is well included in next year's plan says the chair of the SSML (the Finnish Direct Marketing Federation) mobile work group, Eeva-Liisa Ylälahti.
In March 2002 twenty three percent of Finns between the ages of 15-65 who have a cell phone received text message advertising, according to a study by Mobile Marketing Tracking. The share of women and men receiving a message was equally large. One third of the under 35 year age group received a message. Mobile advertising had also come to the older age groups, 19% of the 35-39 age group received it and 18% of the 50-64 age group.
Consumers' experiences of cell phones as a buying channel are positive. Every fifth household had bought using the cell phone during 2001. Northern and southern under thirty Finnish men were the most active. Logos and ring tones were the most bought product group and the average purchase was 10 euros. The information was disclosed in a study of buying channels made by the Finnish Direct Marketing Federation (SSML). (Research International, May 2002).
Marketing people believe that mobile advertising is best suited for event marketing (12%), reaching target groups (10%), activation/ ordering (10%), marketing of certain products (8%), reaching youth (7%), for fast situations (6%), mobile equipment advertising (4%), and for reminding (3%). A study by Suomen Gallup Web also found that of the 200 largest advertisers only 4% had made mobile advertising by last October, but 22% of those answering planned to carry it out. This study will be carried out again in 2002
Text message marketing always assumes a person's advance consent. The marketer can ask for consent via an agreement, home page, or text message. If consent is requested via text message, the consent request may not contain marketing. On the other hand the marketer's obligation to obtain advance permission only pertains to marketing: messages relating to customer care (for example information about delayed flights or interruptions in customer service) can be sent without consent. A firm has the right to forbid marketing directed to its mobile connections in B to B marketing.
The article was published in the magazine of the Finnish Direct Marketing Federation mailed for the members.
MOBILE AS A BUYING CHANNEL FOR EVERY FIFTH
Consumers' experiences of cell phones as a buying channel are positive. Every fifth household had bought using the cell phone during 2001.
Northern and southern Finland were clearly over represented in the buying group and the more active were, as expected, the under thirties. Last year men bought more than women using a cell phone or WAP. Logos and ring tones were the most bought product group and the average purchase was 10 euros. The information was disclosed in a fresh study of buying channels made by the Finnish Direct Marketing Federation (SSML).
Research International, commissioned by the Finnish Direct Marketing Federation, studied consumer experiences, opinions, buying intentions, and impressions of retailing done with the help of direct marketing's different sales methods. In the study 2004 people were interviewed concerning, among other things, purchases made with the help of cell phones or WAP in 2001.
In all, 393 consumer households, 19.6% of those interviewed, had bought using a cell phone or WAP last year. Logos and ring tones made up 97.5% of the bought product groups. The purchase value was 20 euros or under in almost all cases (85%). Six percent reported values of 21-50 euros, one percent made purchases of 80-110 euros, and the same one percent reported purchases of 151-250 euros.
In the occupation distribution, students and schoolchildren were as expected in the lead (those having purchased 30%, the whole sample distribution 13%), but also workers were of the more active purchasers by cell phone (29% / 23%).
Over half of the mobile buyers, 51%, belonged to the age group 18-29 years (22% of the entire sample was this age group), 30-39 year olds were 21% (whole sample 15%), and 19% of purchasers via cell phone were 40-49 years old (whole sample 18%).
The experiences of mobile purchasers were on the whole good, very and fairly positive experiences were all together 65%. Those saying they had fairly or very negative experiences were only 8%. Intentions for further purchases were in the same class, 64% would very or fairly certainly purchase in the future.
The article was published in the magazine of the Finnish Direct Marketing
Federation mailed for the members.
