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IBM Study Finds Consumers Want More Control and Choice on Mobile Web
Posted: 22-May-2008 [Source: IBM]

[New IBM study shows 80 percent of consumers would prefer a service provider that gave them more choice in the apps and services available on their mobile device.]

Armonik, NY -- IBM today released a new study which reveals 80 percent of consumers would prefer a service provider that gave them more choice in the applications and services available on their mobile device. The study, titled, "Go mobile, grow" produced by IBM's Institute for Business Value points to how consumer demand for customization and personalization will drive innovation and open standards in the mobile marketplace.

The mobile web provides people with access to the Internet anytime and anywhere. The market for mobile Internet services is estimated to reach US$80 billion by 2011, with increasing usage expected to fuel growth in both the provision of services and mobile Internet advertising.(1) At the same time, the number of mobile Internet users worldwide is projected to approach 1 billion, a 191 percent increase from 2006 and a compound annual growth rate of 24 percent.(2) The ubiquitous availability of IP wireless broadband and more affordable advanced smart phones will change the way companies around the world operate and relate to their customers, employees and partners.

IBM surveyed nearly 700 consumers around the world on their preferences regarding the mobile internet. 69 percent of consumers reported they want devices that are open to personalization and configuration of applications.

The IBM survey found the mobile web will increasingly be used for utility and transactional services. For example, nearly 60 percent of consumers are interested in banking via mobile devices. Other utility services include e-mail, instant messaging, stock trading, news and information and general browsing. Also, entertainment applications are growing in popularity with the IBM study finding 53 percent of consumers interested in mobile TV and 45 percent interest in buying music via mobile devices.

"Clearly the same market forces which empowered consumers to choose personal computers that were open and enabled them to customize their applications are at play in the mobile web marketplace," said Dr. Sungyoul Lee, Global Consulting Leader, Electronics Industry, IBM. "Our survey found 60 percent of consumers do not have a specific brand preference when using mobile Internet services. With consumers clamoring for choice, the marketplace will need to innovate around open platforms and models to build loyalty."

Markets around the world will adopt the mobile web differently. In mature markets, IBM consultants predict the Mobile Web will extend and complement the personal computer. While in emerging markets like India and China, consumers are skipping their first PC purchase and going straight to high-end mobile platforms that deliver the same service. IBM consultants also predict that in semi-literate populations, people will use low-cost mobile phones, whose user interface will be voice-based, which will greatly expand their connectivity to people and data.

Implications and Recommendations for Mobile Device Makers

The IBM study, points to a number challenges which Mobile Device Makers (MDMs) will face in the "Era of the Mobile Web." In particular, competition with established Internet brands looking to the mobile web as a source of potential revenue poses a huge challenge. Also, existing business relationships and channel conflicts will be a major obstacle as MDMs could be perceived as threats to offerings by their network partners and impact the core device business of MDMs.

"These challenges from portal players and mobile network operators will force MDMs to compete where they excel most by delivering innovation that wows consumers," said IBM's Dr. Lee. "Mobile device makers, confronted by numerous challenges to growth and profitability, need to develop new avenues to expand their core offerings. At the moment, the mobile internet market is still somewhat fragmented. But it is unlikely to stay that way for long. The time to act is now."

Based on the consumer survey results and further analysis by IBM industry consultants, the IBM study identifies a number of factors which will help MDMs secure market share in the mobile internet space. Namely, a focus on driving their design and business models based directly on consumer insights will be vital. Also, the development of a participation in a standards-based, open ecosystem for devices and services will be a boon for innovation.

To take advantage of the opportunities offered by the mobile Internet, the study says many MDMs may need to transform from device-driven to service-driven. This may require changes in marketing and brand perception, partnership strategies, content delivery and management, as well as revenue models. This transformation in business model will also require a scalable and cost-efficient infrastructure that enables them to rapidly ramp up services. This may include looking at the benefits of partnering with a third party (e.g. outsourcing partner, system integrator, etc.) in order to bring in the necessary expertise, while still keeping the costs low.

Handset sales have reached saturation point in emerging markets therefore compelling MDMs to move to higher end devices that enable more services. This could bring a double boost to earnings and revenue as it raises the average device price point and provides MDMs a cross sell opportunity to high margin services.

As part of its ongoing consumer research efforts, IBM has the full report "Go mobile, grow" available at this IBM website.

In addition to working with clients on mobile web initiatives, IBM is making major investments in software, hardware, services and partnerships related to the mobile web. IBM Research has a number of projects in its labs focused on bringing simple, easy-to-use services to the millions of people in the world who have bypassed using the personal computer as their primary method of accessing technology, and are instead using their mobile phone to access the web, conduct financial transactions, entertain themselves, shop and more. Additionally, IBM has opened several worldwide telecom solutions labs focused on research and development in areas related to the mobile web. For more information, visit


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