In the early 2000s, we saw a revolution in the way people used mobile phones. First, Nokia, Microsoft and Research-In-Motion popularized the use of smartphone among business users. Then, Apple’s iPhone and Google’s Android led to an explosion of smartphone usage among consumers, extending the rise of smartphones beyond the business setting. The boom in smartphone usage also came with an attendant rise in data usage, which has far outpaced the growth of voice and SMS usage globally.
Data is Fast Overtaking Voice
According to the Ericsson Mobility Report published in June 2015, data usage on mobile networks has taken a sharp uptick since 2010. Between the first quarters of 2014 and 2015 alone, the amount of data traffic from mobile phones rose by a whopping 55%. Voice, on the other hand, has remained relatively the same, with no significant increases in usage. By the end of the year 2020, 80% of mobile traffic will be data from smartphones.
The traditional cellular voice call is beginning to lose relevance as more calls are being made through data networks originally intended for browsing the Internet. Mobile operators have begun a process of slowly co-opting Wi-Fi networks to supplement their bandwidth capacity. Examples of this include T-Mobile’s Wi-Fi Calling application and Google’s Project Fi. The addition of Wi-Fi allows for mobile networks to hand off bandwidth usage to higher-capacity hubs.
This area is also where application-based calling comes in handy. Yallo, for instance, aims to add value by allowing users to switch seamlessly between Wi-Fi and 4G seamlessly. Going beyond simply routing calls through data networks, Yallo is making the calls smarter. Users can, for example, transmit the intent of their call in advance — a sort of heads-up about the theme of the discussion. This is an uncannily futuristic point of view of phone calls, implemented directly in the software.
Don’t Rule out Basic Services Just Yet
We cannot altogether rule out the voice call, text message, or even the so-caled “dumb” phones, however. While most content and application developers focus on building platforms and solutions for smartphone users, it’s safe to say that there is still sense in targeting the most basic of users, who prefer simply calling and texting. In fact, there is still a substantial number of people in the world who would much rather buy the most basic phones. Some estimates put the number of non-smartphones to be sold this year at 590 million.
Many of the people who stick to basic cellular phones are doing so out of necessity, such as those in developing countries that prefer low cost over functionality. But we cannot make the quick assumption that dumb phones are for people who lack the funds to purchase a smartphone. In some markets, people just tend to prioritize the impressive battery life these minimalistic phones provide over the touch screens, big displays, data capabilities, and the rich set of features of their smarter counterparts. In Japan, for instance, non-smartphones are making a comeback as a more durable and novel alternative to smartphones.
Even without fancy touchscreens and broadband Internet access, basic phone users are still a big market for startups and established service providers. There is a big gap that needs to be addressed, especially in emerging markets where majority of mobile phone users have yet to start enjoying the benefits of data-driven apps. It is in these markets where businesses need to innovate in their service offerings.
Case in point: in South Africa and India, mobile-based payment service M-Pesa allows users to pay for goods and services, as well as deposit, withdraw and transfer money – all without the need for a traditional bank account. The predominantly SMS-based service also offers a microfinance service, in which users can borrow small amounts of money as short-term loans. Such applications address the so-called “underbanked” in these emerging economies, enabling seamless mobile payment transactions even without data access.
Another example is text-based marketing, which has caught the attention of the big players. Earlier this year, Twitter acquired Indian startup ZipDial in a bid to expand its reach in emerging markets. This application takes advantage of the “missed call,” wherein cost-conscious users hang up before the receiving end answers, expecting the other person to call back. ZipDial essentially incentivizes the missed call phenomenon in order to encourage more interaction with digital content.
The opportunities for building value in the mobile industry are not only limited to data-driven efforts like smartphone applications and cloud-based services that deliver rich content on-demand. There are still means to innovate, even in the most basic of services like voice calls and SMS. In emerging markets, the opportunities are even bigger, and even social networking giant Facebook consider these basic users as the “next billion” in enabling Internet connectivity. The best way for businesses to benefit is to find gaps in mobile and other transactional services and work to provide innovations in these areas.
This article was written by Steve Olenski from Forbes and was legally licensed through the NewsCred publisher network.