At the end of 1996, digital mobile phones overtook analogue mobiles for the first time. Since the end of 1993, the number of mobile phones has almost quadrupled, from 1.8 million to 6.8 million, and digital mobiles have come from nowhere to be the dominant force in the market. Back in 1993, few would have forecast this, because for many users digital mobiles have only limited advantages over the old analogue kind.
They have also moved from being mainly a business tool to being primarily for personal use. Nine million people (about one in five adults) now have access to a mobile. Back in 1994, over half (53 per cent) used their mobile mainly for business, about a third (35 per cent) mainly for personal calls and the remainder (12 per cent) for both equally. Now, half (50 per cent) use them mainly for personal calls, only a third (35 per cent) mainly for business and the remainder (l5 per cent) for both equally. Rarely, if ever, has such an expensive new product been taken up by so many so quickly. The average monthly bill for a mobile is about 37 – 450 a year.
A parallel area of telecoms growth in the home is the PC. Currently, 2.8 million adults have a PC linked to a modem at home, and so can access the Internet (though our research indicates that only half currently do so). And it is these homes that provide a forerunner of the kind that will soon be quite commonplace. Most homes with PCs linked to modems also have mobile phones, nearly half have a fax at home, and half use e-mail on a regular basis. They also have a much higher probability of taking satellite TV, with about a third connected either to cable or a dish, compared with less than one in four of all adults.
These linked PC homes are becoming more and more important to the telecoms companies. The average quarterly telephone bill in these homes is well over 100 compared with 65 for all homes.Three quarters of these homes also pay another 100 or more quarterly for their mobiles. Hence many pay 1,000 or more annually in telecoms bills.
Chart Two shows that a major trigger to installing a modem at home is work use. Half of all modem-linked homes run a business of their own, many others work at home for an outside employer, and a number are doing both.
The question is whether this will continue, and therefore restrict future growth of modem sales to the rise in people working from home. Or whether, as with mobile phones, new easy-to-use software will build the market as more consumers buy modems to use with their PCs for entertainment purposes.
As more and more people acquire modems, and hence gain access to e-mail, so the opportunities to talk to other people through e-mail will increase, which could stimulate sales. Voicemail services – such as BT’s Callminder – are growing fast.
E-mail can provide much simpler access to friends and family.
Expense may, however, limit market growth. Chart Three shows that currently homes with both a linked PC and a mobile phone are skewed markedly to the higher income groups and to the more affluent South. More than two out of three of the homes with both a mobile phone and a modem have family incomes in excess of 20,000 annually.
The electronic digital homes of the future may well be concentrated in this more affluent sector, though the fact that close to a third are in the lower income groups shows that available income is not the sole arbiter of choice. And, of course, telecoms prices are falling with the growth of competition, and a PC with modem may soon seem as necessary as a mobile phone to large sectors of the population.
What implications does this have for the arrival of digital TV? Forecasters and gurus are currently very divided in their expectations, but digital TV can potentially offer a wide mix of practical and fun applications.
The video recorder, although it accounts for roughly ten per cent of TV viewing (including both time-shift and rented or bought videos), is now present in 75 per cent of homes; satellite TV is in almost a quarter of homes; and mobile phones are available to 20 per cent of adults.
Digital TV with its potential for simpler timeshift viewing (or near video on demand, as it is often called), with its opportunities for more specialist channels (showing everything from all your favourite football team’s matches to cookery and culture) plus pay-per-view and its interactive capabilities, may prove to be the surprise product of the late Nineties.
Initially it’s likely to be limited to more affluent households, although defining future markets for digital electronic products is still a difficult task for marketers.
Technical Note: The data for this article is derived mainly from
The Million Plus Panel operated by Continental Research. It comprises 2.4 million individuals selected from the ICD Lifestyle database, and weighted to be representative of the UK adult population. This panel is clas-sified by over 3,000 variables related to finance and invest-ment, motoring, health, leisure, media, shopping and the home, and by every demographic.