Tuesday, October 30, 2018

Consumers Can't Tell You, Today, Whether They Want 5G

Steve Jobs, Apple co-founder, had some famous opinions about market research. One reason Jobs was skeptical about much market research is that it is impossible for a consumer to evaluate something that person has never seen, a reasonable enough assumption.


“People don’t know what they want until you show it to them,” he once said. “Our task is to read things that are not yet on the page.”


There is something of that happening when we take surveys of what people know and want from 5G, something they never have experienced, even if 5G arguably is similar in some ways to prior generations of mobile service.


A recent PwC survey, for example, found 46 percent of respondents were familiar with the term 5G, without prompting. So a majority of respondents presumably have no way of knowing what 5G is, or what it might mean.


The point is that some skepticism is warranted. People cannot make actual buying decisions about products they have not yet seen, touched, tasted, smelled or heard.


And, as often happens, respondents might be inconsistent about what they want most, and what they most are willing to pay to get.


Although respondents suggested reliability was the “most important” attribute, “faster speed” was the single change the greatest percentage of respondents indicated they would pay a higher fee to get.
source: PwC

Assuming that 5G delivers on its promise of faster speeds, around a third of customers indicated that they’d be willing to pay $5.06 more per month on average, versus $4.40 more per month for mobile customers, PwC says.


More would pay a premium for 5G if it provided “better quality video” on their mobile device. Some 29 percent of respondents suggested they would pay more for better video, compared to 25 percent of respondents similarly willing to pay more for better video on their fixed service.


The key caveat here is that most people do not know what the term 5G means. They have never had a concrete experience with 5G. They may not know they have to buy new devices. They have not been presented with a concrete offer. Nor have they been able to evalue better 4G services against new 5G offers.


Moreover, it is possible that the real value of 5G for new use cases will emerge most clearly on the enterprise side of the market, to support internet of things use cases, not consumer broadband. We soon will begin to test actual demand in the real world, and surprises could emerge.


People simply cannot make fully rational choices about products they have no experience with, with no actual pricing information, terms and conditions of use. Steve Jobs’ advice likely is warranted in that regard. People cannot tell you whether they want a product they have never seen.

No comments:

5G Will Affect Network Architectures

Before the advent of mobile communications, networking architectures all were simple. Public networks (telcos) supplied wide area communic...