Customer Transitions in Adopting Mobile
Data Services: A Survey Analysis
Comparing Korean and Japanese Users
JE Short (jshort@ucsd.edu) and J Siegel (jsiegel@hbs.edu)
May 2007
1
Motivation and Questions
> Motivation: Wireless demand growth, user segmentation,
application mix, usage (voice, data) and device
preference, among others, is mediated by many factors,
and is path dependent
> Useful to study platform transitions as these transitions
represent inflection points in aggregated profiles of use
> Questions:
• How do firms create markets for new products and services when these
products / services are not yet introduced?
• Consumer interactivity, expectations, pricing (economic incentives)
• What motivates consumers to upgrade existing product / services?
• What forms of incentives operate to transition behaviors (discontinuity)
versus evolve behaviors over time?
2
Background
> Marketing literature:
• WMDS adoption: customer switching and loyalty behavior as a
function of technical complexity, personal innovativeness and trust
• Keaveney, 1995; Jones and Sasser, 1995; Rust, Lemon and Zeithaml,
2004; Reinartz, Thomas and Kumar, 2005; Pirc, 2005
• General studies of technology adoption (co-evolution, etc.)
• Venkatesh, Morris, Davis & Davis, 2003
> Communications literature:
• Adoption of new technologies in developing economies, in more
advanced economies, etc.
• Noam, Komatsuzaki, and Conn 1994; Noam 1998, 1999
• Other factors
• To discuss
3
Study and Method
> Companion surveys in Japan and Korea (same
instrument), administered over same time period
> Survey: 66 questions in five sections, administered in
Japan and Korea, replicate planned for this year (to allow
for longitudinal analysis) – full survey in paper
> Respondent Pool:
• Just over 5,000 people responded, and 4,609 responses were judged
suitable for analysis (incompletes, etc.)
• Average age of respondent was 26. Approx 90% owned a cell phone, just
over 80% had owned a pager, allowing a detailed analysis of pager to cell
phone transition
4
Results
> Transition Pattern (3 types) versus Price Sensitivity (Korean data)
Figure 4. Transition pattern vs. price sensitivity
%
us
er
s sc
a en
m ari
ono
g
ea
ch
60
50
40
A
k
B
e
C
30
20
10
0
1
2
3
4
5
Subjective Price of Cellular vs. Pager
(1: Cheap / 5: Expensive)
5
A – Kept Using Pager
B – Stopped Pager
C – Used Both, Then
Stopped Using Pager
Results
> When Consumers Started Accessing the Internet, Mediated by Pager
% U sers o f each seg m ent
Figure 5. When consumers started using the Internet
through their mobile phone
30.00%
25.00%
20.00%
W ith Pager
W ithoutPager
15.00%
10.00%
5.00%
0.00%
1990 1992 1994 1996 1998 2000 2002
Year
6
Results
> Reasons for Using the Internet
Figure 6. Motivation for using mobile Internet
service
60.00%
% of
users
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
a
b
c
d
e
Motivation
f
g
h
a. I found out that the mobile Internet existed
b. Using the mobile Internet became affordable
c. I saw a need to use the mobile Internet.
d. The services provided by the mobile Internet became attractive.
e. Mobile Internet became easy to use.
f. I became satisfied with security on the mobile Internet.
g. Because my cell-phone happened to have Internet capability.
h. Other
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Conclusions and Future Research
> Japanese and Korean platform transitions between pager
and cellular services were very different
> Japanese consumers held on to pager services far
longer, and were willing to use (and pay for) both devices
> Korean consumers shifted across platforms quickly and
started using Internet services much more rapidly
• Mediating factor: Korean price subsidies
> Further research
• Replicate survey planned this year
• Comparison of two platform transitions (within and between
analysis)
8