White heat or lukewarm?
Despite optimistic talk of digital convergence, communications platforms continue to proliferate. This lack of simplicity is reflected in the fragmentary adoption patterns of the latest advances
Technological advances are having a huge impact on our lives. A casual glance around any train carriage of an evening will reveal that the iPod is doing rather well, while Dixons’ recent decision to stop selling film cameras is another indication that digital technology is fast becoming commonplace.
Hotwire, the European technology PR consultancy, and MORI have conducted research into the adoption levels of a number of consumer technologies across France, Germany and the UK to identify and analyse cross-market trends. Participants were asked about their use of broadband, third-generation (3G) mobile phones, MP3 players, personal video recorders, digital television and voice over internet protocol (VOIP) telephony. The results make eye-opening reading for anyone who assumes that some of these technologies are anywhere near mass-market.
Across the three leading European markets, narrowband internet access is being phased out. France lags behind Germany and the UK for household internet access. Forty-two per cent of French households – 20.1 million consumers – have access to the Web. This compares with 67 per cent in Germany and 55 per cent in the UK. Even in France, where there are considerably fewer connections (including narrowband), broadband is doing well, with 34 per cent of French households having broadband access. Lower overall internet penetration in France belies a relatively high adoption rate of broadband.
However, of these sizeable groups of broadband users, only a small percentage use their connection for VOIP – a way of making cheap calls over the internet and, seemingly, a prospect with strong consumer appeal. The UK lags behind France and Germany, with just seven per cent of consumers having made a VOIP call (France and Germany fare little better, on 14 and 11 per cent respectively).
Turning to digital TV, viewers across Europe have embraced the platform to a great degree. In France, 35 per cent of households subscribe to a digital TV service – the lowest figure in the three countries studied. But the French digital TV market is set to take off. While service provider TÃ©lÃ©vision NumÃ©rique Terrestre covers 35 per cent of the French population in 17 cities, by September 2005 this is expected to rise to 50 per cent of the population in 32 cities. TNT aims ultimately to reach 85 per cent of the French population.
In the UK, 3G phones have been available for over two years, following the memorable launch of 3 on “03.03.03”, but for several reasons the technology has yet to attract many fans. Currently, 3 – the main 3G network operator in the UK – sells most of its subscriptions on the promise of cheap calls, with next-generation services such as streaming video failing to strike a chord with consumers.
Mobile operators have established that further adoption of 3G is likely to be among existing mobile phone users, encouraged to upgrade old handsets in exchange for feature-rich models capable of supporting video, voice and data services. At present, the highest 3G adoption rates are in the UK – and even these figures aren’t much to shout about. While 83 per cent of UK consumers use a mobile phone, only six per cent, or 2.8 million, have a 3G handset. France follows, with 74 per cent mobile penetration and just three per cent being 3G owners, while Germany, despite having higher mobile phone ownership (87 per cent), has the lowest proportion of 3G handset owners at just two per cent.
The Hotwire/MORI study looks at the number of households that use all three technologies – internet at home, digital TV and mobile phone – and are therefore considered “multiple platform-enabled”. Germany is the most developed market in this respect, with 44 per cent of households owning a mobile phone, having internet access and watching digital TV. This equates to 19.6 million people. The next most-developed market is the UK, where 17.6 million people, or 38 per cent of households, have access to all three platforms. France lags, with only 21 per cent of households, or 9.8 million people, using multiple platforms. In the UK, 35- to 44-year-olds are the most likely to use all three platforms.
There are a number of implications here for marketers. Rather than digital convergence, there is a broadening of the range of platforms for access to voice, video and data services. The research shows that simplicity and ease of use are key to the adoption of new technological products – and that market education must be a crucial building block in this perception. Without a clear message, and a simple answer to the question “Yes, but how do I use it?”, consumer technology marketers should settle in for a long uphill climb.