Consumers Finding Wireless Confusing

The providers of wireless devices and services need to do a better job of explaining their benefits to potential customers, according to research by ConStat, Inc.

Preliminary results from ConStat’s Wireless Information Services and Data Monitor (WISDM) indicate that 2 million adults in the United States expressed an interest in buying some type of wireless Internet access device and/or service within the next three months. While the idea of going wireless is appealing to many, ConStat estimates that in reality only 10 percent of them — approximately 200,000 adults — will actually follow through on that intention.

“Although the market for wireless information and data services is in its infancy, even the earliest of adopters are perplexed by the profusion of options and the fuzzy distinctions among them,” said William Deaton, senior partner of ConStat.

There are two important factors that distinguish the 200,000 prospects who are most likely to adopt wireless Internet services near-term from those that like the concept but are less likely to purchase, ConStat found. The likely adopters have a clear understanding of the products and services currently available and they have a clear idea of how those offerings fit into the individual’s personal and work life. Those who are most likely to adopt the services also have a greater knowledge of brands, offerings and pricing and have actively shopped for a device or service.

The research suggests that the confusion surrounding wireless devices and services is a major barrier to adoption. Many potential purchasers are struggling to understand what various wireless devices can and cannot do, not to mention which ones are truly Internet-enabled.

“As an example, some prospects are confusing the synching and downloading capability of personal digital assistants for wireless Internet access,” Deaton said. “In addition, technology buyers have become accustomed to short technology maturity cycles and may postpone purchases until retailers offer more robust, data-capable devices and services at reduced prices.”

Confusion or not, the Strategis Group forecasts that more than 483 million next-generation wireless devices will be sold to end-users globally, and one-third of the world’s population will own a wireless device by 2008.

“We’re projecting that handset replacement rates will rebound dramatically in 2002, fueled by end-users who are increasingly ready to migrate to next-generation devices,” said Ozgur Aytar, a wireless market analyst with The Strategis Group. “Next-generation services, such as multimedia messaging (MMS), will drive this consumer demand at least into 2003. MMS will be the next-generation chat room that will help fuel demand for advanced handsets. Short messaging services (SMS) and i-mode have only wetted the appetite of consumers for the capability that MMS can deliver.”

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