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Why I haven’t “realized the mobile Internet”- and why I think Rich Miner is on the wrong track

Mobile phones and “smart” phones have a ton of features: things like taking pictures, browsing the Internet, and playing games. Studies have shown, however, that only somewhere between 10 and 50% of the users of these feature rich devices know how to do more than make phone calls with them. Rich Miner of Google mentioned recently that the reason for this is mainly “bad UIs”. I think, however, that Rich is probably on the wrong track, at least for some users. Maybe even the majority of them.

The real reason most folks don’t use those fancy cell phone features is, in my opinion, two fold. First: most people have cell phones to (*gasp!*) make phone calls. They get phones with all those extra fancy features because they don’t have any choice and because, on the surface, they sound kind of neat. But once they really experience the functionality the phone can provide they quickly revert to using the phone for what they really bought it for: making calls. Why bother wasting time learning to use features that you have no real need for?

So, why is it that cell phones have all these largely unused features? Sure, some user somewhere thought it would be neat to have their phone also be a camera, instant messenger, and internet browser. And those might even be nice features- but the real reason they are on every phone is because the telcos desperately want to sell users obscenely over-priced data services. Telephone companies make good money on cell phone calls, but they make an absolute killing, on the order of thousands of times as much for the same volume of “bits” being sent over the network, for those other services. Telcos want to jam pack as many features tied to over-priced data transmission services into every phone as they can. They really hope someone will accidentally start using these features, and the more of them they add in the more likely it is that someone will stupidly pay to use them.

Which leads to my nominee for the second reason why most people don’t use these “extra” features on their cell phones: cost. Even the stupidest user, unless they are stupid *and* rich, quickly realizes that sending a photo via their phone, downloading a game or ring tone, or browsing the Internet is painfully expensive. $30 a month for the phone without a data plan is pretty pricy to begin with: asking people to spend $100 or $150 a month for plans that include adequate data services elevates the cost beyond what everyone but the “stupid rich” can justify. Without those plans, data services from telcos are beyond expensive: a thousand times the per-byte cost of a telephone conversation. Even if the price was a third as much it would be too much for most people- they already pay $30 a month for Internet services and $50 a month for digital cable, money which only a few years ago they didn’t have to spend, so adding another $50 or more a month to put those services in their pocket is just unreasonable.

To be clear: I do agree with Rich that many features on cell phones and “smart” phones are too complex to use for most people. But if the data services supporting these features were cheap enough, more people would likely invest the time to figure out how to use them. Look at Japan: by all accounts, their phones are incredibly complex and difficult to use, but their phone services are cheap, and I understand there is a much higher rate of use for phone-based data services. Make the data cost of using all those fancy features negligible, and the percentage of people using them would probably go up much faster than any user interface change could account for.

Oh, and for those who feel tempted to use the elegance of the iPhone UI as an example to refute my assertions, I would have this to say: the people who buy iPhones buy them for all the fancy features *first*, and as a phone second. This is clearly demonstrated by the fact that the iPhone’s poor performance as a phone (E.G.: dropping calls, service area issues, limited talk time) doesn’t seem to have reduced its popularity. The iPhone UI is nice, but that is not the deciding factor in terms of how much the features beyond basic phone calls are used.

2 comments to Why I haven’t “realized the mobile Internet”- and why I think Rich Miner is on the wrong track

  • The problem is even worse actually, $100 – $150 a month will not get you an *adequate* amount of data.

    The problem is that most of the fellows like the one that wrote that article don’t pay for their phones. Their corporation does, or at worst they can expense the costs.

    On the other hand, you have me with his massive $28k per year gross income. I spent a couple of weeks on the road and all together spent about $30 for internet access that wasn’t included in the cost of the hotel etc. Conservatively I would say I uploaded about 40MB of pictures and downloaded 10 times that.

    I also had a cell phone bill $30 higher than usual. $10 of that was long distance fees. The other $20 was for 400 KB of data when I wanted to check weather and schedules and had no i-net access.

    Now, if I had a plan … well if I had a plan I would have to spend $50 a month, every month to get a whopping 10MB of data allowance. $600 a year. That is what it would cost me to have unlimited high speed access at the most expensive hotel rate.

    I *would* use my phone gadgets and use it for tethering *if* I could buy it when I needed it, and at a reasonable rate.

    The cell phone companies have gotten themselves into the same marketing paradigm as the airlines with “business class” – chasing after the few high end consumers that don’t pay directly our of pocket and finding that they aren’t making that much money when advertising, loyalty rewards and discounts are factored in. So they up the prices to the economy class while squeezing them into tighter and tighter spaces.

    They need to adopt the “low cost” airline model like westjet everyone pays one reasonable rate, and they open up entirely new markets. One thing I discovered down in the maritimes was a common theme of travel between western Canada and the maritimes by people like myself that couldn’t afford to make the trip in either direction before westjet expanded it’s network. As little as 10 years ago it would have cost close to $2000 one way. Now it’s an $800 round trip. And every seat on every plane was full.

    Data is also a low margin / high volume business, and sooner or later the phone companies will have to face that reality.

  • Good comment, Chris. The thing that amazes me is the incredible disparity between cellular voice and data fees. As I mentioned in my post, it is all “bits”, but if you figure out what you are paying for voice (500 minutes of 24 thousand bits per second, which is more or less the standard voice data rate) versus data, particularly text messaging, you will see that 1000 to 1 ratio I mentioned. The telcos are charging $0.15 or more for a 120 byte text message: or $30 for 500 minutes of talking ($30 for 72 megabytes). Even $30 for 72 megabytes (or $0.50 a megabyte, more or less) is obscenely over-priced compared to land line costs, but look at the per byte disparity between a text message and voice.

    It is, to put it mildly, shocking.

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