Consumers Showing Interest in Alternative Access Devices

For years, PCs and Internet access have been nearly synonymous in the eyes of consumers. Now, a pair of surveys look at how consumers feel about getting Internet access through their cell phone or television.

Wireless phone users want Internet access and are willing to pay more for the monthly service and the handset to satisfy their wants, according to a survey by The Stratgeis Group. Nearly one-third of the wireless phone users surveyed said they’d spend $13 a month more for the service and $61 more for an Internet-ready handset.

Additional Costs Users Would Pay for Phone with Net Access
Cost	Percent of Interested Users
Nothing	33%
$1-10	27%
$11-15	11%
$16-20	14%
$21 or more	33%
Source: The Strategis Group

“The Internet and email are playing a more and more dominant role in our lives,” said Geoffrey Koontz, a wireless analyst at The Strategis Group. “Wireless users are realizing that wireless Internet access would serve a very functional and convenient purpose for getting information when they’re away from their home or office. The fact is, wireless services no longer means only voice communications. Today’s carriers provide in-depth services such as online transactions, unified messaging, location services, and comparison shopping.”

According to The Strategis Group study “CellTRAC: ™ Cellular and PCS Consumer Trends,” 30 percent of wireless users are interested in a phone that would allow them to send and receive email. The data also indicates that 49 percent of potential users are interested in wireless email.

“The fact that so many potential users are interested in wireless email validates the findings from Europe and Japan,” said Elliott Hamilton, senior VP at The Strategis Group. “New users are much more likely to depend upon wireless for all their Internet and email access, bypassing fixed Internet access altogether.”

Other highlights of The Strategis Group study include:

• The median household income of all wireless phone users is $62,850, but the median household income of users for less than a year is $47,420.
• The average monthly bill for all users was $55; 12 percent of users had a pre-paid service plan.
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  Users Interest in Phones with E-Mail
  	Current Users	Potential Users
  Definitely Interested	8.3%	13%
  Probably Interested	8.0%	13%
  Maybe Interested	13.3%	23%
  Probably Not Interested	25%	26%
  Definitely Not Interested	45%	25%
  Source: The Strategis Group

  The average monthly bill for men was $61; for women, $50.

• The higher the household income, the higher the monthly bill for all users. Users earning less than $40,000 a year had an average monthly bill of $45; users earning between $40,000 and $80,000 averaged $57 a month, and those earning over $80,000 a year had a monthly bill averaging $75.
• 41 percent of all users said their primary reason for buying a wireless phone was for limited safety usage
• 53 percent of users are women; 47 percent are men. Of potential users, 62 percent are women and 38 percent are men.

The survey is based on quarterly household surveys of users and non-users of cellular and PCS services. The report tracks wireless consumer preferences and trends including attitudes toward wireless, Internet use, subscriber churn, demographic profiles, phone usage, brand awareness, and distribution.

Meanwhile, the outlook for consumer demand for interactive TV is also promising, according to a report by TechTrends, Inc. The report found that more than 45 percent of US households would consider subscribing to an interactive TV service within a year, assuming one is available in their area. Following price and ease of use, consumers’ most important criteria for subscribing to ITV services are feature and content.

“As cable companies witness strong adoption rates for competing satellite services, and they see telcos preparing to deliver enhanced television services, they are recognizing the need to upgrade their own offerings in order to expand their subscriber base,” said Laurence J. Bloom, director of research and consulting.

TechTrends’ research has concluded that most US cable subscribers prefer email and Web-browsing as ITV service features, while ranking customized advertisements as the least important feature. One reason for the popularity of email and Web-browsing over the television is consumers’ familiarity and level of comfort with these Internet applications.

But some consumers are reluctant to embrace certain TV-based Internet applications, such as email, Web-browsing, time-shifting and online gaming, preferring instead to use their PCs for many of these services. The challenge for service providers will be to lure consumers away from their computers, according to the report.

“Cable operators will need to emphasize the advantages of TV-based, interactive multimedia applications versus PC-based services, since the number one reason that consumers will not subscribe to ITV services is that they feel their PC is sufficient,” Bloom said.

These research findings come from the responses of 3,000 US households with satellite and/or cable service who were surveyed as part of TechTrends’ new study, “Identifying Opportunities in Web-Enabled Interactive Television: An Analysis of Hardware, Software, Services and Content.” The study is based on in-depth interviews with cable, satellite and telco operators, network broadcasters, consumer electronics manufacturers, chip makers, game distributors, software providers and content developers, and it examines various proven and unproven players, business models and applications within the ITV market.