by Angela McIntyre | January 31, 2014 | Comments Off
Hugues de la Vergne shares his views on the impact of Lenovo’s announcement to acquire Motorola Mobility.
AM: What does Lenovo’s acquisition of Motorola Mobility mean for the smartphone market?
HV: The Lenovo acquisition will have a minor effect on smartphone market share, but will have a larger effect on mid-tier smartphone margins in key markets like the U.S. Motorola Mobility is mainly regionally focused and gets the majority of sales in the Americas with only 1% of WW device sales. Motorola’s market share was primarily its Droid products at Verizon Wireless and its sales in Latin America.
AM: What might Lenovo achieve through the acquisition?
HV: Lenovo’s acquisition makes sense because they want into the U.S. smartphone market, but the market has become saturated. Competition is intense and dominated by Samsung and Apple, who control almost 60% of the US market. This acquisition gets Lenovo to the table with U.S. operators, but it will still be difficult to gain share. Lenovo will try to leverage the MOTOROLA brand to offer aggressive pricing in the mid/higher end smartphone market to achieve what Huawei and ZTE have not been able to do – move up market from sub-$100, no contract phones.
AM: What effect will Lenovo’s acquisition of Motorola Mobility have on other smartphone OEMs?
HV: Lenovo/Motorola is a legitimate threat to some of the second tier brands like LG, Kyocera and HTC. Lenovo’s threat to Samsung is mostly to put pressure on margins.
Hugues de la Vergne
Hugues de la Vergne is a Principal Analyst in Gartner. He leads the mobile device research for North America and has worldwide responsibility for cellular modems.
You can read Lenovo’s press release at http://news.lenovo.com/article_display.cfm?article_id=1767
Category: Uncategorized Tags: Acquisition, Lenovo, Motorola, smartphone
by Angela McIntyre | October 11, 2013 | Comments Off
Gartner brand analyst Annette Jump and I recently discussed her insights on brand analysis methods. CMOs of tech firms are improving consumer brand perception using the Brand Strength Index and Net Promoter Scores.
Angela McIntyre: Since technology providers know branding is critical for marketing to consumers, what do you recommend clients do to evaluate their brand?
Annette Jump: Some ways to evaluate brand strengths are more useful than others. Two that I like are: Net Promoter Score (NPS) and Gartner’s Brand Strength Index (BSI). NPS is used by marketing managers to evaluate the effectiveness of their sales and marketing campaigns. BSI is used to improve brand perception and yields scores range from 1-120. In Gartner’s own assessment of IT companies using the BSI, Microsoft came in at 88 and Amazon at 95.on the low side, the struggling Blackberry only had a BSI score of 55 and, Sony was 60.
Angela McIntyre: What surprises has the Net Promoter Score analysis revealed?
Annette Jump: Despite Apple’s rankas the #1 brand WW by Interbrand, the NPS score for the company is weak (-3% NPS score). Nearly 40% of consumers would not recommend the Apple brand. In contrast, Google has the highest (+20% NPS score) with nearly half of consumers willing to recommend its brand. Meeting consumer needs and affordable pricing are the main reasons consumers recommend a brand to a friend or family.
Angela McIntyre: Why not just rely on Interbrand and BrandZ scores for brand strength?
Annette Jump: Companies, such as Interbrand and BrandZ, examine brand strength by allocating a financial value for each brand, however, this doesn’t help with understanding strengths and weaknesses of a brand. Despite the importance of brand development, some tech providers still make important business decisions with little more than anecdotal knowledge of how the market perceives them. Gartner’s BSI methodology and our research give clients useful advice for improving brand.
Angela McIntyre: Why should clients make improving their Net Promoter Score a priority?
There is a direct link between the NPS and technology provider revenues. Companies that fix the top issues highlighted by NPS are more likely to increase revenue from consumer spending. Companies with positive NPS tend to have more loyal customers, who are likely to buy additional products and services, provide positive online reviews, and become brand advocates. Google, Amazon and Samsung had the highest proportion of brand promoters.
Angela McIntyre: Where do clients start in an internal assessment of their brand?
Annette Jump: Our toolkit, “Tech Go-to-Market Toolkit: Compare Your Net Promoter Score Against Top Tech Brands,” allows consumer tech companies to compare their own NPS score against those of the largest consumer technology brands. Clients use Gartner’s Brand Strength Index to measure the strength of their brand story and to understand how to improve it. The BSI provides a quantitative assessment that is supports the reallocation funds to strength brand by geography, gender or age.
Annette Jump would be glad to discuss the Brand Strength Index and Net Promoter Score methods in detail with Gartner clients. Thank you for reading the blog.
Category: Uncategorized Tags: brand, Brand Strength Index, BSI, Net Promoter Score, NPS
by Angela McIntyre | July 22, 2013 | Comments Off
Hello, this blog post is by my colleague Hugues de la Vergne. He has great insights. I hope you enjoy reading the post. Best, Angela
Two year mobile contracts have always had one major drawback for early adopters; being stuck with the same Smartphone for two years. In response to this market demand, T-Mobile recently launched its Jump program allowing consumers to upgrade their mobile device every six months for a fee. AT&T and Verizon Wireless quickly followed suit. T-Mobile addressed a need of a very important segment of the market, the early adopter, who are high ARPU customers.
The one drawback of these plans is cost. On AT&T’s plan, they remove the subsidy and finance the device over a 20 month period but allow you to upgrade at the end of 12 months. Thus, AT&T then takes on the risk of having to refurbish and resell the handset at the end of year one. In the case of the iPhone 5, the consumer will have to pay $390 in the first year. With the iPhone 5 retailing for $650, that would imply that AT&T would only need to get $260 in the second hand market for a one year old iPhone 5 which is very achievable. Thus, this plan could easily cost AT&T zero in subsidy expense versus the estimated $450 subsidy on a traditional post paid contract for an iPhone 5. Operators will support this program as they are trying to keep high ARPU customers and lower their subsidy expense.
Due to the high costs of early upgrades, well under 10% of consumers will take advantage of this promotion with early adopters constituting the vast majority. The only handset vendors that will see any real increase in sales will be the highly desired Apple and Samsung Smartphones and tablets, but increase in sales will be limited as only a small % of the subscriber base will move to this plan. But, with only evolutionary improvements on handsets on a YoY basis, the vast majority of subs are going to continue with the traditional subsidy model that they are used to thus having a limited effect on handset sales.
On the operator side, expect Sprint to jump in with an aggressive response. Now that Sprint is much better capitalized, you can expect more aggressive pricing plans primarily targeting AT&T’s customer base. Now that Verizon Wireless and AT&T have matched their Jump promotion, expect T-Mobile to continue to aggressively launch unique promotions that target real consumer needs.
Category: Uncategorized Tags:
by Angela McIntyre | April 11, 2013 | Comments Off
My colleague Hugues De La Vergne and I discussed how T-Mobile’s “Un-carrier” approach to end smartphone subsidies will not seem heroic to consumers choosing their next smartphones.
Angela: Why was the T-Mobile announcement risky?
Hugues: T-mobile recently announced their plans to remove subsidies for smartphones. They will also no longer offer wireless contracts and supposedly will simplify the wireless selection process. All operators have spoken about the problem with high subsidies effecting their earnings and the desire to get subsidy expense lower. T-Mobile is the first to do something about subsidies, but that is risky for T-Mobile because consumer perceptions on what they should pay for a smartphone will not change overnight.
Angela: How will T-Mobile’s taking away the smartphone subsidies affect consumers? Is it better or worse for consumers’ wallets?
Hugues: T-Mobile simplifies the rate plan side of the decision while confusing the device side of the decision. Instead of the traditional way of purchasing subsidized phones that consumers are comfortable with, consumers can finance them over 2 years, which is the average life of a phone. After two years the total amount a T-Mobile customer spends on a smartphone and wireless service could be less.
Hugues De La Vergne
Angela: What challenges does T-Mobile have in promoting the new pricing to consumers?
Hugues: Consumers won’t understand the benefit to them. Americans love a deal and what deal sounds better than a free smartphone? How could paying more for a smartphone be good? Consumers have been used to these “deals” on handsets for close to 15 years, so T-Mobile has a lot of work ahead to re-educate consumers.
Advertising campaigns need to educate consumers on how they should look at the total cost of ownership of the device and rate. Most would assume that consumers already do that, but they typically do not. T-Mobile does not have the advertising budgets of the larger operators like AT&T and Verizon. T-Mobile needs to use its limited advertising dollars in a very efficient manner to change consumer perceptions and really needs more than what we have seen so far with the “Magenta Hat” commercial to pull this off.
Members of the press who wish to contact Hugues De La Vergne for further comment, can do so through Gartner PR.
Thank you for reading my blog!
Category: Uncategorized Tags: carrier, mobile phone, rate plan, smartphone, subsidy, T-Mobile
by Angela McIntyre | February 27, 2013 | Comments Off
My colleague Tuong Nguyen and I discuss the line-up of announcements surrounding Mobile World Congress last week. Tuong was in New York City at briefings by HTC, Canon, Metaio and Sony.
Angela: What was cool and “meh” about what you saw at HTC?
Tuong: I went to the launch of the HTC One. Physically it’s a nice phone – sleek looking. HTC’s Blinkfeed and Zoe features are interesting. Blinkfeed enhances HTC sense by aggregating your favorite social media, news and other content onto your homescreen.. Imagine a “mash-up” of Windows Live Tiles and Blackberry’s social feed and you’ve got the gist of Blinkfeed. Zoe takes a 3 second video while you take a photo. It automatically creates a montage from these pictures and videos. It would be a nice addition to the still photos in an informal album, for example of a day with your kids at the zoo. HTC was also highlighting Beats Audio, but the app I demo’d didn’t have haptics so you couldn’t feel the beat, which would have been cool. Overall, the HTC One is interesting, but won’t make users drop their current contract to go and buy it.
Angela: You cover augmented reality (AR) and virtual reality (VR) and said Canon and Metaio had news.
Tuong: Yes, Canon is targeting product development and manufacturing with a mixed reality solution of AR and VR. The headset costs $125K plus a $25K/yearly maintenance contract, which means only enterprise can afford it. It’s still early days in this market, so I expect to see more elegant solutions in the next 3-5 years.
Angela: You told me that Metaio is working with ST-Ericsson and may shake up the AR component market.
Tuong: Right. ST-Ericsson will be offering an AR enhanced chipset that is optimized for the Metaio’s augmented reality engine. Metaio is an AR solution provider. This means the ST-Ericsson-Metaio solution will compete head-on with Qualcomm’s Vuforia solution on Snapdragon-powered devices.
Angela: You seemed a bit disappointed the day after Sony announced PS4.
Tuong: Well, it seems Sony rushed to announce this product before there was much to say about it. In the case of PS4, perhaps Sony thought they needed to announce it before Microsoft announces their next version of Xbox in a couple months. Unfortunately, Sony’s briefing was sparse on details – like detailed specs, a launch date, price, etc. They did showcase some key developers for PS4, for example Blizzard, Bungie, Capcom and Ubisoft. In addition, Sony discussed some of the social features of PS4, such as a “share button,” which allows you to do things such as broadcast and watch friends play, remote game assist and item drops, and even post gameplay screen caps and videos. Yet, many of these features are already on the market. However, Sony certainly has an opportunity to improve on existing solutions in the PS4. Overall, Sony seems to have an idea of how the future of gaming should evolve, but the sparse details around PS4 did not instill confidence they could execute on that vision.
Angela: Tuong, thank you for spending time to give your take on these announcements.
Tuong was featured in a podcast by WNYC about augmented reality. You can hear him and read more about augmented reality here: http://www.wnyc.org/shows/newtechcity/2013/feb/19/
Thank you for reading my blog.
Category: Uncategorized Tags: augmented reality, Ericsson, HTC, Metaio, Mobile World Congress, PS4, Qualcomm, smartphone, Sony, virtual reality
by Angela McIntyre | January 15, 2013 | Comments Off
I was looking out for wearable electronics at CES. Here are some that caught my attention…
Aftershokz (www.aftershokz.com) – bone (tissue) conduction headset sits in front of the ear. Let’s you hear communications while “keeping your ears open” to hear what is going on around you. Bone conduction is useful for first responders who need to hear ambient noises for safety. Aftershokz is marketed to athletes and other active persons, who for example, want to listen to music, but also need to hear traffic noises while on-the-go.
MC10 (www.mc10inc.com) – concussion monitor beanie. Athletes and kids participating in contact sports can wear this skullcap under their helmet. It monitors whether a collision or fall took place that may have resulted in a concussion. The monitor could detect the smaller concussions, which may otherwise go unnoticed and untreated, resulting in brain damage.
MC10 also announced their hydration monitor, which is a thin, tattoo-like sensor that adheres to the skin under a band-aid. It can be used by athletes and others to advise them when to take a drink.
GeoPalz (www.geopalz.com) – activity tracker for kids. Devices come in kid-friendly characters to be more fun to wear. Parents can track metrics, e.g., number of steps, calories, and sleep. Kids may choose to join more fitness activities to boost their GeoPalz scores and win prizes. Rewards keep kids motivated via gamification. School days are becoming shortened for cost savings, which results in fewer physical education classes in elementary schools and junior high. Schools may adopt fitness solutions such as GeoPalz as an alternative to regular physical education classes.
Cra-Z-art (www.cra-z-art.com) – light-up blocks that are Lego compatible. What’s wearable about these? Snap together, connect the wires, and clip to clothes to get customizable, light-up fashion for kids age 6 through twelve. Here is the concept dress… http://www.youtube.com/watchv=Xk1qBgz5rxw
What have I been up to besides CES? One of my latest reports on Gartner.com is about innovations in smart fabrics, http://www.gartner.com/resId=2282415
Thank you for reading my blog!
Category: Uncategorized Tags: CES, children's technology, consumer electronics, fitness tracker, headsets, Internet of Things, mobility, wearable electronics, wearable sensors
by Angela McIntyre | July 9, 2012 | 1 Comment
The Toshiba “medical test subject” ad is edgy, a bit gross, and caused a stir. From the buzz, viewers remember Toshiba after seeing it. Yet, the images and portrayal of medical trials are disturbing and can lead to unintended negative connotations for the Toshiba brand. So why may Toshiba have chosen this commercial?
Toshiba’s “medical test subject” ad plays to a sophisticated young buyer, the Tech Savants. In Gartner’s consumer segmentation, Tech Savants are highly engaged in new technology, but care less about particular brands, and they comprise 18% of the market. Toshiba is experimenting not only with edgy marketing, but how to appeal to a group of buyers who are brand agnostic. That’s not so easy.
We know from Gartner focus groups that Tech Savants tell stories of faddish technology they or friends bought, which broke or just didn’t work well. Tech Savants would be skeptical about the quality of Ultrabooks coming to market. They remember how netbooks quickly came to market and ended up as a fad with few repeat buyers. Toshiba features a Satellite Ultrabook in the commercial and uses it to deliver the message that Toshiba will not take advantage of consumers by offering products that are not ready.
The targets for these ads seem to be college students and recent college grads who have to watch their budgets instead of follow the latest fad. They have taken or considered taking a range of odd jobs to help pay expenses and are savvy enough to enjoy the hyperbole of the medical experiments.
The protagonist, a professional medical test subject, is a character with which folks in their twenties may empathize. It’s difficult finding a first job and many end up in jobs that are far from what they hoped.
Will the “test subject” ad make folks reconsider participation in a clinical trial? Some in the short-term, unfortunately. Who wants to be referred to as a “test monkey” as they do in the commercial?
What if Toshiba offered coupons and sponsored drawings for free PCs for participants in clinical trials? All for the cause of furthering science – medical science and marketing science.
Here is the Gartner report with more detail on our consumer market segmentation. The ability to access it depends on your subscription.
“Consumer Dynamics’ Impact on Technology Markets, 2012”
Thank you for reading my blog. You can watch the commercial on YouTube.
Category: Uncategorized Tags: advertising, brand, consumer, focus group, Intel, marketing, PC, Toshiba, Ultrabook
by Angela McIntyre | May 9, 2012 | 2 Comments
“Most people don’t know Microsoft sells PCs,” is how James at the Microsoft Store responded to my initial surprise at the layout of their new store. Microsoft has 19 retail stores in the US, and the Microsoft Store at the Stanford Shopping Mall opened a couple weeks ago. I was surprised that the Xbox and software were in the back corners of the store. Instead, PCs, tablets and smartphones were front and center, and Samsung and Acer had the strongest presence. The Microsoft Store encouraged visitors to try out the products and placed stools in front of most displays to make shoppers feel comfortable staying for a longer period of time.
I got to try out Windows 8 on a Samsung Slate 7 when I was there. Cool device. It had a Core i5 processor, so plenty of compute power. James walked me through Windows 8, and I liked the Metro interface on the slate screen. The Slate 7 comes with a pen, which I wish was tethered so I could just let go of it without having to snap it back into its holder at the top. I liked the flexibility of being able to switch from handwriting to soft qwerty keyboard to a thumb-style keyboard. With thumb-typing, the tablet tended to waggle too much at the far end due to its 11.6 inch screen size and 16:9 format. As for the Office apps, Word was usable with the touch interface, but Power Point was a pain without a separate keyboard. I hope Microsoft effectively incorporates touch in Office 15. Otherwise, Office will soon feel like a dinosaur.
The modern, minimalist design of the Microsoft Store’s retail space mimicked the design of the Apple store, and as at Apple, the hip, Microsoft staff were more like advisors than sales persons. Hey, why reinvent what works? The Microsoft Store is right next door to the Apple Store – to promote comparison shopping? Whereas the ratio of staff to shopper in the Microsoft Store was about 4 to 1, the Apple Store was packed with visitors. With Apple it’s not only the user experience and devices, but the brand cache of a designer label. Copying a retail environment is easy for Microsoft, but evolving the brand is a significant challenge.
Category: Uncategorized Tags: Acer, Apple, Intel, Microsoft, PC, Samsung, smartphone, tablet, Windows 8
by Angela McIntyre | November 28, 2011 | Comments Off
I was behind the mirror for a few consumer focus groups Gartner held recently. We asked consumers in six cities about how they use technology, attitudes about consumer electronics, and what influences their purchase decisions the most. The focus groups highlight how differently consumers think about mobile, video and social media than marketing directors, product managers and industry analysts. Focus groups are fantastic for us to step away from the tech-centric world to hear what matters to end users. It’s exciting to hear insights about consumer usage trends straight from the end users themselves.
For example, in cities where smartphones usage among focus group participants was high, consumers commented that smartphones have changed the way they watch TV and reduced the time they spend using their PCs. Smartphones are the connected device that is most convenient to carry around, even around the house. Participants multi-tasked on their smartphones while “watching” TV, by doing on-line social networking or browsing the internet. Because smartphones are at hand, participants cited various ways that they use them when they have a few extra minutes or at the moment they think of an online task they should do. They don’t have to wait to get home to check a bank account or watch videos. Key consumer trends are to use mobile devices more and PCs less and to multi-task across multiple screens.
Marketing organizations use the data from consumer surveys and focus groups to guide their messaging, for product development, and to request budget. The quotes, sound bites and video clips from focus groups help build a convincing case when communicating consumer attitudes to executives across the enterprise. Gartner will have published 20 reports this year about consumer attitudes from our primary research. Topics span how to influence late adopters, preferences for customer service, and what devices consumers want to carry with them. I have links to a couple of my reports below:
Findings: Press ’0′ to Speak with a Live Agent
Survey Analysis: San Jose Focus Group Reveals Divergent Paths to Technology Purchases
Access to these reports depends on your Gartner subscription.
Thank you for reading my blog.
Category: Uncategorized Tags: brand, consumer, customer service, focus group, mobility, PC, smartphone, survey, technology trends, TV
by Angela McIntyre | November 11, 2011 | 3 Comments
An example of technology, once a kids’ fad, which will increase data traffic in the Cloud
My daughter turned nine recently, and with her birthday money she chose to buy a necklace with a cat pendant that turns hues of green and blue from her own body temperature when she wears it. The necklace reminded me of mood ring from 30 years ago! They turned pretty shades depending on how warm one’s finger gets. What a blast from the past for this old mom! I think I was in 5th grade when my aunt gave me one as a present. It was the top fad at the time, and I just had to have one. I had been envious for months of the rich-looking purple color the “stone” turned when my friends wore their rings. I was disappointed that all my skinny finger could generate was a muddy brown color. “Cold hands, warm heart,” my mom would offer in consolation. Geesh.
Yet mood ring technology has evolved into useful thermal sensors. I was reading news about Near Field Communication (NFC) and SMART (Status and Motion Activated Radiofrequency Tags) technology and came across announcements from American Thermal Instruments, Inc. ATI got its start manufacturing mood rings in 1980. After mood rings, ATI turned their attention to more useful applications of thermal monitoring, such as forehead thermometers; they supplied more than 30 million of them last year. ATI announced pilot programs for sensors and mobile software that track temperature and send alerts if temperatures go outside a programmed range. The sensors provide data, which can be transmitted and stored in the Cloud, via NFC-enabled smartphones or RFID scanners.
Thermal sensors with wireless connectivity can lead to improved product quality and safety benefiting both business and consumers. Medicine can lose potency above certain temperatures. The shelf-life of produce will be shorter if temperatures are too high during transport from the farm to the market. Temperature increases in the wheels of cars, trains and airplanes can indicate they need repair. A variety of wireless sensors may be used in the home, such as in appliances to send maintenance alerts, to inform parents if their child develops a fever, and on food containers to indicate the leftovers are going bad. Consumers will want the option of receiving alerts on their smartphones or tablets.
ATI is an example of companies entering the connected device market. The number of devices intermittently connected to the internet is 50 billion worldwide, but with trends, such the increasing use of sensors and greater penetration of smartphones and tablets, the number will grow to 200 billion by 2015. Gartner analysts Sylvain Fabre and Jessica Ekholm write that by 2020 there will be more cellular connected devices than conventional subscribers. By 2015 data traffic through cellular networks will increase to 26 times its volume in 2010. The increase in data traffic holds opportunities and challenges for communications service providers, and Sylvain and Jessica discuss them in “4G: The Next Frontier for Cellular Networks.” Sylvain recently did a Talking Technology segment, “4G Services: A Premature Call,” which provides an introduction to issues surrounding 4G.
The growing trend for real-world objects to be connected forming an ”Internet of Things” is included in a webinar by David Willis and me, “iPad and Beyond: What the Future of Computing Holds.” It was well-attended, and you can download the slides or listen to the replay through the link above. (Access to Gartner content depends on your subscription.)
Note: SMART technology has a patent pending from the University of Dayton Research Institute, whose inventor Bob Kauffman developed it in part to detect and report mechanical failures of certain clamps on aircraft.
Thank you for reading my blog. Have a great day!
Category: Uncategorized Tags: 4G, big data, Cloud, computing trends, Internet of Things, NFC, SMART