Sunday - July 30, 2000

Wireless Web Will Evolve as Consumer Interest is Realized

Although demand for the wireless Web in North America is currently minimal, it will evolve as marketers grow to understand consumer behavior. According to a new Technographics Report from Forrester Research, Inc, even though consumers are unable to articulate an interest in the wireless Web, there is strong evidence pointing to the emergence of a successful market. By following four rules of latent demand, wireless Web providers will plot a course for growth.

"Consumers don't think they want the wireless Web yet, but they will. They have adopted an Internet lifestyle, and the wireless Web will simply be the next step," said Patrick Callinan, analyst at Forrester Research. "Also, the market will succeed as competition undermines prices for voice minutes -- forcing operators to roll out wireless data. Furthermore, the mad adoption of wireless technology in Japan and Europe provide North American developers with confidence that their turn is just around the corner."

Forrester defines latent demand as demand for a technology product or service that consumers are unable to define in advance of using it. By following the four rules of latent demand, Forrester believes, the wireless Web industry can tap into latent demand and realize its full potential. First, successful innovations will create new behaviors while accommodating old habits. Interacting with the Web via a mobile device is new behavior, but expecting data anytime, anywhere is not. Need, urgency, and location will determine which services will be adopted. The ultimate goal is to accommodate existing habits while extending functionality.

Second, companies must build on existing technology -- the installed base of supporting technologies dictates an innovation's launching point. The two most obvious technology platforms on which to build wireless Web services are the digital cell phone and the wireless PDA. Consumers prefer the full-featured PDA, but the mobile phone has the speed-of-adoption advantage. Sixty-nine percent of those interested in mobile data would like to access their personal calendars on a wireless PDA, but only 51% would do so on an Internet cell phone.

Third, understanding consumer need and expectations will help wireless vendors create the perfect combination of features, as well as open the door to multiple opportunities. Consumers are most concerned about price, followed by the form of the device and its primary function. The "free" model is most preferred, followed by pay-as-you-go programs.

Finally, mobile Commerce will evolve as companies open pockets of new opportunity. The first step is accepting that the wireless Web will not be adopted until the current market has matured. Two-thirds of North American consumers are uncomfortable with the idea of making transactions using the data capabilities of an Internet cell phone. At the dawn of Web-based commerce, it took nearly two years for consumers to gain the confidence necessary to purchase online. As the Web matured, the lag decreased. Now, 24% of online customers new to the Net purchase in their first six months online. Companies must accept that consumers of mobile commerce will experience a similar learning curve.

"If the rules of latent demand are not followed exactly, failure is certain," added Callinan. "So even though we predict that the wireless Web will succeed -- not all innovators will bask in the glow of that success."

For the Report "Latent Demand For A Wireless Web" Forrester surveyed 9,000 representative American and Canadian householders to measure interest in the wireless Web. Today, half of US households do not subscribe to cellular service -- 34% of US households say they are not at all likely to purchase cellular services.

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