Nearing the end of last year, the mobile phone market saw a huge slowdown in smartphone sales. A few of the biggest names in tech were affected by the slow paced market, with Apple reporting that iPhone revenue fell by as much as 15 percent and Samsung recorded a sales decline of 4.4 percent in Q4 of 2018. In a world where consumers are near-addicted to their smartphones, it begs the question: What is causing these slumps and is the smartphone boom actually coming to an end?
New device launches aren’t driving as much excitement as they use to. In fact, new updates are only incremental feature upgrades, rather than disruptive innovations that set one device generation apart from the next. What’s more, the ever-increasing cost of smartphones has made consumers reluctant to trade in or upgrade. However, industry experts say that when offered in the right method, in the right context, additional services, such as subsidised music streaming services, discounted sports television packages and device insurance deals to name a few, can help operators leverage their relationship with their subscribers to enhance their daily lives, beyond the realm of data connectivity and headsets.
Some mobile operators have already implemented enticing incentives to capture consumers. T-Mobile offers a complementary Netflix subscription for those with family plans of two lines or more. Additionally, AT&T offers its television service, u-verse, at a discounted rate when bundled with either internet services and/or wireless services. For both operators, this has created reason for consumers to continue to stay with their respective wireless provider.
A move like this can also help to carry the subscriber/operator relationship further than would otherwise be possible. This will prove particularly important as we see more operators shift their attention to their digital channels, moving away from investments in physical retail stores, thus losing out on the physical touchpoint with their subscribers. Being able to extend the operator/subscriber relationship beyond traditional touch-points will be a key differentiator, particularly if operators can compete on more than just price.
For operators, 2019 is all about diversifying and expanding their offering. With 5G around the corner, the pressure is on for them to monetise their massive investment. However, doing so will not be possible alone. They will need the help and trust of their subscribers to offer the level of service that they want and need, and will need to form successful partnerships with companies that are able to meet these subscriber demands. This will require a shift in mindset – out with the traditional ‘go it alone’ approach, and in with a collaborative partnership attitude that encourages the implementation of innovative services. This new mindset will also need a renewed focus on the subscriber profile and how its evolution is transforming the operator’s place in their daily lives.
The reality is that wireless providers have no choice but to think differently when it comes to revenue generation. Data commodity means they are barely an asset, and subscribers will want to see more if they are to stay put. While this seems like a bleak outlook, operators must embrace these shifting trends as opportunities, and welcome in a new era for the telecoms industry. But the burden is on them to change, and fast. If they don’t, they’ll simply struggle to survive.