Churn. It’s all about churn and it’s always been that way whether you’re selling wireless phone subscriptions, cars, PCs or mobile devices.
How often did Romans change their chariots? And why? For a spikier wheel-set? A fresh colour? The latest number plate?
When something as trivial as a new year’s car number plate can persuade a moron he needs to spend £30k on a new car, then the importance of churn is established. It keeps industries going.
With PCs there became absolutely no reason to buy a new one. In fact people loved old ones. XP, may it RIP, was the beloved geriatric no one wanted to lose. Without churn, goodbye to that industry.
If ever there’s an industry which needs to keep its mojo churning, it’s mobile.
The phone market, we are told, is a saturated market but the smartphone market still grew 43% to over a billion units last year according to Futuresource.
And the phone manufacturers haven’t, like the PC boys, lost their mojo – they’re adding all sorts of weirdo stuff to phones – health-check monitors, fingerprint ID to obsolete passwords (almost), talk-to-texting, talk-back answers to spoken questions, 360 degree panoramic video-ing and the like.
When you see your mate with a newer model, especially when it can do things your phone can’t, you feel a tad peeved.
So the phone guys are doing sexy stuff, curved phones are here, big screens are catching on, rollable and foldable screens may be coming, phones promise control of your home appliances, garage doors, moat-cleaning, wife-beating and private drones while getting thinner, sexier and lighter.
People used to keep phones for three years but that cadence is collapsing at the top end under the pressure of new stuff persuading the fashionista, the early adopter, the gullible, the young, the technophile, the conformist and the feeble-minded to buy the latest and greatest.
And then there’s the low-end smartphone market where the thrust to own or upgrade a smartphone is strongest.
Last year China became the largest smartphone market in the world buying 310 million of the things which were mostly made by local companies Lenovo, Huawei, Coolpad, Xiaomi and ZTE, says Futuresource.
Will the Chinese be churners? You can bet your bottom dollar that they’ll drive this thing onwards and upwards for as long and as fast as their economy keeps expanding.
And then there’s the fabulous tablet market – growing at 57% last year to 243 million units, says Futuresource though, to my mind, the difference between an iPad Air and a sub-$100 Chinese tablet is so great they shouldn’t share a category.
Apple is doing substantial things to keep the iPad churn going – it appears to have some fancy packaging technology which has allowed it to shave the weight from 1.33lb to 1lb.
Others, like Acer, Lenovo and Asus, go for the sub-$100 market where there are endless aspirant owners.
To keep the mobile show on the road, punters must forever be aspiring to a new device – so new devices must continually offer something new which the punters desperately want.
Churn, churn, churn or you burn, burn, burn with envy.