Thursday, July 2, 2015

Why consumers are the biggest winners in mobile revolution



They now feel more empowered and connected than ever

Do you know anyone who doesn’t own a single mobile device? Probably not.

In the past decade, the mobile revolution has swept the world, seeping into every aspect of our daily lives and radically altering how we think, behave, and function in today’s ever-connected age.

Driven by steady technology improvement and lower costs, the global adoption rate of mobile devices has been spectacular, to say the least. Take the GCC region, for example: it has one of the highest LTE-capable smartphone penetration rates (more than 70 per cent) in the worl

The fact is, at present — and according to The GSMA Association — nearly half of the world’s population subscribes to a mobile device, according to The GSMA Association. While approximately 60 per cent of users still have basic 2G connections, by 2020, there will be approximately 2.3 billion 4G connections, dramatically increasing the range of services and value provided to consumers around the world.

After all, mobile devices provide ubiquitous connectivity and an array of applications and services that impact almost every facet of life. In emerging economies, mobile is often the first point of access to the internet, and therefore opens up a huge range of activities that were previously inaccessible.

To better understand how much value consumers derive from mobile technologies and how they use these technologies, we, at The Boston Consulting Group (BCG), surveyed approximately 7,500 consumers in the US, Germany, South Korea, Brazil, China, and India as part of our research for a new report titled The Mobile Revolution: How Mobile Technologies Drive a Trillion-Dollar Impact.

We used a sophisticated approach to ascertaining the true value that mobile creates independent of what consumers currently pay for devices and connectivity. Our research found that mobile technologies are creating immense value for consumers — value that greatly exceeds the cost of owning a mobile device.

Our study also revealed that the aggregate annual consumer surplus — that is, the benefit consumers receive from mobile technologies over and above what they pay — amounts to $6.4 trillion, a figure that exceeds the GDP of every country in the world except that of the US and China.

Moreover, consumers worldwide value mobile technologies at 11 to 45 per cent of their income — well above what they pay for the service. While the ones in the developed economies (the US, Germany, and South Korea) value mobile technologies at upward of $6,000 per year, or 12 per cent of their income, consumers in the emerging economies place an even higher value on mobile relative to their income. In China and India, the consumer-reported value of mobile exceeds 40 per cent of average income.

Mobile technologies have, without a doubt, become a basic necessity for many consumers. This can be seen in the trade-offs consumers would accept to keep their mobile phones. Interestingly, the majority of people surveyed were willing to give up luxuries such as dining out (64 per cent), having a pet (51 per cent), and going on vacation (50 per cent) — for an entire year — in order to keep their mobile phone.

In terms of their social life, 51 per cent of respondents would actually give up one day off a week for their devices. 45 per cent would prefer not seeing any of their friends in person rather than go without a mobile phone.

What are some of the other necessities that they would be willing to forego? 45 per cent of respondents would give up 20 per cent of the space in their house/apartment and their subscription to home broadband internet. Another 36 per cent would cut off electricity in their home for 12 hours a day, while 33 per cent would accept a 20 per cent reduction in pay.

Based on these findings, there is no question that mobile technologies have left an indelible mark on how consumers act and react. They now feel more empowered and connected than ever.

And yet, despite the tremendous impact that mobile has already delivered — or perhaps because of its tremendous impact — consumers still want more. We found that 90 per cent of the 3G and 4G consumers who participated in our survey are eager for advances above and beyond the currently available mobile technology.

Fundamental innovation is required to boost speed, extend battery life, and strengthen connectivity. More network roll-outs are needed to deliver better service to more consumers at lower cost. The next generation of technologies cannot get here fast enough for those who are accustomed to always-on, instant access to everything

Of course, many of these breakthroughs will not be possible without upfront investments in R&D by the industry.

The writer is the partner and managing director at BCG Middle East.
Source: awok.co/DrQVXp
Website: www.Awok.com

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