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Tuesday, October 28, 2008

Shoppers choose by phones, not carriers - who's surprised?

A recent report by AdAge presents something that should be of no surprise to the common man. It cites a study by Google that shows that the majority of phone owners are swayed in their purchase decision by the handset, not the carrier (registration may be required to read article).

This is one of those forehead-slapping moments that shouldn't require a paid study to uncover. Here's the basic decision process for the average phone owner: "I need to stay in touch with friends and family while on the move. The thing that helps me stay in touch is the phone. It stores my contacts, my messages, my photographs, all of the stuff that's near and dear to me. The telco is simply a profit-making intermediary that facilitates my communications."

Yes, the mobile phone has evolved into something that has become an extension of our body entirely because it contains items that we have an emotional connection with. Jan Chipchase, an anthropologist with Nokia, commented that people around the world will always check their pockets for three things: money, keys, and -- if they have one -- mobile phone.

The Apple iPhone proved that the intense lust for this sleek phone could override consumers' opinions about AT&T. To obtain the "must have" iPhone, they were willing to lock themselves into one carrier for at least two years. The same phenomenon happened in Singapore and almost everywhere else in the world: "I want the iPhone, so I guess I'll have to subscribe to that exclusive telco."

The telco, on the other hand, has become well known as this bloodsucking Big Bad that is out to spin a quick buck from the unsuspecting consumer. Even with competition, it is generally able to charge exorbitant fees for connection charges, talk time, SMS, and now data. It is said that even the simple SMS is one of the most expensive data communication plan in the world. And of course, telcos that had exclusive deals with the iPhone were quick to jump into the money-grabbing bandwagon.

Is anyone surprised then that no one feels tremendous love for the telco?

But things aren't really that simple. The study found that 24% of shoppers based their decisions on the handset alone, while 28% said that both the handset and carrier influenced their decisions. Together, you get 52% of shoppers somewhat influenced by the handset.

Or... 76% of shoppers somewhat influenced by telcos.

To put it graphically:
Venn diagram showing how handsets and carriers influenced shoppers' purchase behaviour

So things don't seem that clear-cut after all. It looks like telcos still wield tremendous power over how we make our mobile communication decisions. But again, this shouldn't be of any surprise. Like I said earlier, shoppers are generally wary of telcos because of their perceived immense profit-making machinery. Is it no wonder then that they would put considerable thought into their choice of telco too?

The bottomline is this: shoppers are influenced by their mobile handset than the telco that they are saddled with. However, they are more likely to make their final purchase decision based on what sort of package they can get from telcos, i.e. ideal phone + (somewhat) affordable plan.

Now go out and get your iPhone. But don't come crying when you're stuck with your AT&T or SingTel or whoever for the next two years (assuming you haven't hacked your iPhone... yet).

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