This week the team talk change and manufacturer's efforts to get us to change devices, platforms and even ecosystems. Ewan highlights an effort by Microsoft in the US to get Macbook Air owners to trade-in their laptops in favour of Surface tablets.
Conversation moves on to the wider challenges of switching and the increasing use of cloud services to 'lock' users in to ecosystems as 'stealing' customers becomes a prime way to grow in markets where the majority have a smartphone.
Ben: Hello, and welcome to the 361 Degrees Podcast, Season 7, Episode 7. My name is Ben Smith from Wireless Worker.
Rafe: I'm Rafe from the All About sites.
Ewan: I'm Ewan from Mobile Industry Review.
Ben: Welcome back, gents, it's good to see you.
Ewan: Hellooooo. (laughs) I just felt like being different.
Ben: Was that your "Planet of the Apes" intro?
Ewan: Oh, no, I just don’t know why I was doing that. So hello, how you doing?
Ben: It's unfortunate that this is an entirely audio medium, because -
Ewan: I was waving my arms.
Ben: - the listeners didn't get to see you do what looked very much like a constipated chicken dance.
Ewan: It's just the excitement. I'm just really pleased to be here.
Ben: Fair enough.
Ewan: With both of you.
Ben: You don't get out much anymore, do you? Since the kids arrived?
Ewan: No, this is true.
Rafe: Memo for next time, keep the chocolate brownies away from Ewan.
Ewan: No, no, we only have salad here.
Ben: Exactly, so no more chocolate brownie salad for you until next week. So, gents, what's exciting in your lives?
Ewan: I've got a J-O-B. I've been employed.
Ben: You've finally been employed? So, please stop sending donations to Ewan, then.
Ewan: No, keep them coming, keep them coming.
Ben: So, are you in a position to announce what you're doing yet?
Ewan: No, I think it's important I don't.
Ben: Okay. I think all we can say is, nudge-nudge wink-wink, “Those streets don't sweep themselves.”
Ewan: It's not Amazon.
Ben: Not working for Amazon.
Ewan: No. It’s not Microsoft.
Ben: Actually, I was just mentally making a list of all of the firms you've upset over the years with blog posting.
Ewan: It's not Vodafone…
Ben: Not them, not them, not them. Rafe Blandford, any news with you?
Rafe: Oh, there isn't any particular news for me, but I did want to say I've been enjoying using the flip cover on my HTC One M8. Now, normally I'm not a big fan of cases and things because they just take you away from the phone. But this actually has the ability to kind of light up behind … well it’s actually a cover with lots of holes in it. You tap it once, and you can get the time, you tap it a couple times, you get the weather; you also answer the phone through it. And so, it's a case that actually adds to the experience, and I'd like to see more of those kind of accessories, rather than things that are just around the protection.
Ben: So I've got, it's a few weeks ago now but I've got my Native Union JUMP through the post.
Rafe: This isn't some boring Kickstarter thing that’s going to break after three weeks, is it?
Ben: Well, it is a Kickstarter thing, but I don't -
Ewan: Was it Kickstarter or Indiegogo?
Ben: Native Union are a company that you might have seen, actually, in Apple stores and things. They make kind of accessories and stuff.
Ben: Anyway, so they’re already an established name, although maybe not as big as something like Belkin and people like that, but they make accessories. And they did a Kickstarter project to make this product call the JUMP, which is actually going to go on sale in shops later in the year. And what it is, is it's an iPhone charging cable with this sort of, I would say, 2-inch square lump of plastic in the middle, which is a battery. And so what you do is, normally, you plug into your computer or you USB charger and you charge up your phone, but all the while the battery on this cable is charging up, and then you tuck it in your pocket, and when you're out and about, and your phone inevitably runs out of juice, you can just plug the cable in and give it a quick boost up.
Ewan: A quick jump.
Ben: A quick jump, exactly. And the nice thing is, you see, unlike all my other batteries, which I carry around with me to charge things up, this one charges because it's plugged in all the time, whereas the other one - I've got a really big one I bought from Amazon for super-cheap, but it's never any use to me because it's always run out of juice.
Rafe: I just wish we could go back, you know, ten years to the good old days, when you charged up your phone once a week.
Ben: See, he's talking about Symbian again.
Rafe: Well, I wasn't thinking about so much about Symbian -
Ewan: Yes, you were.
Rafe: Even Symbian couldn't last a week on a single charge.
Ewan: Blackberry did.
Rafe: But the idea that you now have to charge your phone every day is being established -
Ewan: Twice a day…
Ben: Do you remember the good old days when it says, "Are you trying to connect to the internet? Which access point would you like to use?"
Rafe: Oh, that was great.
Ewan: Oh, that was the good old days.
Ben: So, I think we should probably crack on. This week, Mr. MacLeod …
Ben: We don't have a guest, but what we do have to talk about is some news you've picked up on, and you're going to tell us all about.
Ewan: Yes, right. So, I want to talk about switching. For a long time, there's always, in my mind, always been an opportunity for big brands to say, you know what, if it's just money, it it's just a small switching cost for you to actually consider using our product, we'll pay it for you. And I've always liked that - "We'll pay your cancellation fees," those kinds of offers you see. And, more recently, T-Mobile in the U.S. has famously said, look, if you want to bring your family plan or your own plan to us, and you're going to get charged a crazy fee by your existing operator, we'll pay it for you.
I really like that idea of just saying don't worry, we'll remove the costs as an issue. And, for the first time in my memory -
Ben: Considering how much you drink, that's not very long, is it?
Ewan: Well, it is a lot of bubbly. Not champagne, but just carbonated drinks. For the first time, I've seen a massive brand, right, Microsoft, today, they announced the following: "We'll pay you $650 if you have a MacBook Air, so bring a MacBook Air, we'll give you $650 to switch to a Surface Pro 3," the latest version of Surface Pro. And this is U.S. only, as far as I can tell, I've been hunting around trying to find a U.K. equivalent. I have a MacBook Air, I'm not actually using that much, and I would definitely do this. So this is the first time I've seen a big brand that we're aware of actually go to market and say, "We would like you to try our equipment, we're going to give you a reasonable amount of money, $650," what's the MacAir in dollars, what's that, $1000?
Rafe: At least.
Ewan: About $1000 or $1100, something like that?
Ben: So it's probably-
Ewan: A little bit more than that?
Ben: You're probably not going to trade in your new MacBook Air, but if you've had one a couple of years it's not a terrible price to get for it, perhaps.
Ewan: So what you do, you take it into the store, they can give you $650 worth of credit, which is more or less enough to get you toward a Surface Pro 3. Enough to make it easy for you to make that decision.
Ben: So, again, I struggle in dollars, do you know, what's the retail cost on the Surface Pro 3?
Ewan: Oh, just for clarification, I didn't see the Surface Pro - the Pro is actually the expensive one.
Ewan: Let's have a look and see. I’ll just have a look and see…
Rafe: It depends on which model you're going for.
Ewan: It does.
Rafe: Because there are variations on the processor, much like you would have with a laptop and the internal memory as well. But they start at around, I think it's the 800-pound price mark, and go upwards to 2000 pounds.
Ben: And so that's in sterling, though, so...
Rafe: That’s in sterling.
Ewan: The base model of a Surface Pro 3, and let's just keep dollars, because they're offering $650 trade-in for your MacBook Air, the base price is $799. So that's enough to get you to the base model.
Rafe: And that's a Core i5 model?
Ben: Yeah. And have you got any other higher-spec ones?
Ewan: I'm just looking here, yeah, so that's the i5. Let's go for the top, I like going for the biggest, most expensive one. I like the Apple model of going to the right and down. Okay, ooh, right. The 512-gig hard disk Intel i7 -
Ben: Hard disk, did you say hard disk, granddad?
Ewan: All right, well, hard disk, yeah, that's what we all - what's wrong with that?
Rafe: You could say SSD.
Ewan: Oh, don't be ridiculous! Right -
Rafe: You're wrong.
Ewan: Enough of that you opportunist! No, apologist. 1-9-4-9.
Ewan: So, $2000 if you want the top of the line.
Ben: My God, you could buy a car for that!
Ewan: Yes, all right, so… - you haven't helped my argument, here. Well, you meant to say, "Yes, I've been thinking about it. I'm in the zone, I'm in the possible zone."
Ben: Well, we'll talk about the product in a minute, but the idea that you could buy a piece of hardware and get somewhere between most to a third of the price off is pretty appealing.
Rafe: Yeah. And we've seen this with phones, I mean, Microsoft has actually done the same thing with the iPhone and Windows Phone, and, indeed, some of the Android manufacturers have done some of this. So this kind of trade-in thing is not a new idea. And you've talked about how you send your phones off…
Ewan: I use Envirofone, is who I use.
Rafe: This idea is swapping to promote a switch.
Rafe: The difference here and it's trying to get over that whole barrier of "If you switch, it costs money."
Ben: So what would it take you to switch? So we're sitting here, you've got an iPhone in your hand, you're reading the news off an iPad, I bet you've got a MacBook with you, or -
Ewan: I didn't bring it today, but yes, I've got a MacBook Pro and MacBook Air.
Ben: So I would -
Ewan: You would groan?
Ben: I would say that you are mostly invested in the Apple ecosystem.
Ewan: Definitely so, yes.
Ben: Yeah? So what would Mr. Microsoft have to give you -
Ewan: Well, actually -
Ben: - to switch?
Ewan: Actually, this one is really appealing. If it was in the U.K., I think I'd probably do it, because I have got MacBook Air, it's not really my primary device anymore, it used to be, the Pro's a primary device, so I would - me - my particular circumstances - I'd probably go, "Yeah, I'll try it." Because I haven't ever -
Rafe: That's enough to push you over the edge?
Ewan: It is, yes.
Rafe: And, is it psychological? Because, I mean, in terms of the cost, you could do the same thing by trying to trade it in, or sell it [crosstalk 09:21].
Ewan: It's easier.
Rafe: It's easier.
Ewan: You're absolutely right.
Ben: What about to switch wholesale? So, what about if the deal wasn't -
Ewan: Oh, that's an interesting one.
Ben: What about if the deal wasn't "Give us the MacBook Air that you don't use anyway" -
Ben: What if it was, "Give me your iPad, give me your iPhone -
Ewan: Oh, I love this!
Ben: - "Give me your Mac," -
Ewan: Right, yes.
Ben: - "Give me your MacBook Air..."
Ewan: Yeah, we will replace your lifestyle.
Ewan: Yes, swap your lifestyle to Microsoft.
Ben: Yeah. I mean, I can swap your lifestyle to Microsoft just by coming around your house and breaking everything every 20 minutes, but, you know.
Ewan: Yes, very interesting. Okay, I think - that is something I have been exploring, Mobile Industry Review, quite a few times in the past, because I've been looking at the possibility of renting these kinds of devices and services. I mean, I like the idea of saying to Microsoft, for example, "Listen, $150 a month, 150 quid a month, or 100 quid a month, and I want everything from you. I want the machine in the living room, I want this, that, and the other one, the Xbox, that's tougher, but just, how much?" And I'm game. And just supply me the hardware and everything, and give me a new one every 3 months, it's on.
Ben: But Rafe, although there's - Ewan's invested a lot of money in the hardware, and you could switch it, you could rent it, you could do something smart about changing over, the real investment is in apps media, or, I mean we've talked about -
Ewan: It's not that much, I mean come on.
Ben: We've talked about the ecosystem…
Ewan: The real investment, the most painful thing for me to swap would be the fact that I paid 75 or 79 pounds for the TomTom app. That was annoying. That's the most expensive app I've ever bought.
Rafe: I don't think it's necessarily about the cost of apps in terms of buying them, it's actually how familiar you are with the system, and -
Ewan: Ergo, ergo, yeah, I get the psychology, right.
Ben: But I wasn't just talking about iOS apps. I'm thinking about you're going to have to go and re-buy -
Ewan: Office, Office. Annoying.
Ben: Yup. You're going to have to go and re-buy all the Creative … Do you use Creative Cloud?
Ewan: I do, but that's PC as well, they'll give you the PC version, so that's not so much of a problem. Yeah, I'd be really interested, and I think that's a very smart idea for - I wonder if Microsoft would ever do that, say "We will replace your lifestyle." You know? "Give us all your devices, we'll get them sold, and we'll supply you the Windows ones."
Rafe: But one of the interesting things is that it's unlikely to be a wholesale switch, most of the time. And, actually, a lot of people don't live completely in one ecosystem or the other. So this idea that they might swap out one or other device, I don't think is particularly far-fetched. A lot of people will own an Android device, and they'll also own iPad, because for a lot of them, that's the respective high level or the best thing in each type of device.
Ben: But wouldn't, I mean, I know you're factually right, because I've seen it. But it always confuses me. Because why wouldn't you want the same apps, the same experience. I have an Android phone now, which I use as a secondary device, and when I pick it up, I'm frustrated because all of my gut instincts in terms of the way that you interact with the interface, the expectations, the speed you can move around, are frustrated by the fact that it's different. I'm not saying it's wrong, it just, for me, it's different to what I'm kind of used to in daily use, and surely that switching backwards and forwards all the time has such a kind of a mental load, you know, kind of a -
Rafe: Cognitive dissonance between switching from one to the other, and you're right -
Ben: Rafe just used the term cognitive dissonance on my podcast…
Ewan: Is that the phrase of the week?
Ben: That's the phrase of the week. That's the phrase that pays, ladies and gentlemen, if you had cognitive dissonance in your ballot this week, come on down! That's it.
Rafe: The thing is, that promise of cross device hasn't really been delivered yet. It's only now with iOS 8 , with the idea of continuity -
Ewan: Right, yes.
Rafe: - is really coming in, of course. That's not available yet. If you look in the Android world, you can go on through a Chromebook, well, that's nice, but it's not a complete desktop offering. Android tablets really, I would say, aren't as smooth an experience as Apple, and -
Ewan: Please refer to the podcast a little while ago, listeners, where both of these guys said it was.
Rafe: - but the point is, the only ecosystem that's offered that cross-category similarity has been Apple, and even they haven't done it very well, particularly between mobile and desktop. Microsoft has come in and started to do the same thing with Windows phone and tablets, and now the introduction of Windows 8, but none of those, I think, all of that kind of idea of cross device is more theoretical. And people, just because of the way they live their lives, and the way they buy devices, they'll have a different gaming console, be it PlayStation or Xbox, they’ll have a different TV, and, in the old days, you know, it was about having the same TV, and video and DVD, same manufacturer. It just doesn't work like that in principle, and people have got used to this lightly disjointed world.
But I do think it is going to become more important, because people will get used to the idea of moving seamlessly from one device to the other. And so, actually, the next switch that consumers do might be the last one that they do, because it's going to become harder and harder to switch out as more and more of the value goes away from the hardware.
Ewan: Okay, all right, right. Let me move on a little bit with the same point here. Did you see what Motorola were doing? And, I think are still doing, in the States? If you want to try one of the latest phones, they'll send you free for two weeks -
Rafe: This is the Motorola X, and they'll put it through the Moto Maker -
Rafe: - and actually this is basically interest-free. You try it for three weeks, and you pay $1 up front, and if you like it, you pay $400 at the end of your trial.
Ewan: Now that is a very, very smart idea, I think. I'm looking forward to seeing what the results of that are, I hope it's profitable for them. Because I think there's a lot of people that would actually switch, quite happily switch, but there's an issue when you look at the cost of this stuff. You know, 50 or 100 pound a month people are spending on their mobile phone bills. They have to wait until the contract - this is a very Western, very U.K.-centric view, but they have to wait until they do an upgrade to then decide what they're going to do, and then they're very careful about the choices they make.
Ben: But even if you're not subsidized, even if you're making the wholesale payment, I've got $600, whatever, in my hand to go and buy a new Smartphone. Or even if I'm buying a $200 Smartphone, it's still a not insignificant amount of money.
Ewan: Ergo, try it. Would you like to try it?
Ben: Right. But, it's one of the few devices where I can't experience it properly in the shop environment.
Ewan: Correct. Yeah.
Ben: It's not ideal, but I can go and use a laptop screen, use a laptop keyboard, run some software, pick it up, hold it, and have some idea about what using it might be like. But I can't stick the Smartphone in my pocket and walk around with it. I can't see if it holds a network connection. I can't get a sense of how quickly the battery runs out, and I know batteries -
Ewan: Can't put it in your pocket.
Ben: I know - yeah, as I said. Yes.
Ewan: Did you actually say that?
Ewan: Oh, okay.
Rafe: But that's a really key point, because it's bad enough if I -
Ben: If WE don't listen to the podcast, how can we expect anyone else to?
Ewan: I just thought you didn't say anything about the pocket, I'm going to say something about the pocket.
Ben: "Say something about the pocket," just the voices in your head go "Pocket! Pocket!"
Ewan: Pocket! Pocket!
Ben: Blandford, come on, say something smart.
Rafe: The key point that Ben makes here is that mobile as a device that's always with you, actually operates in lots of scenarios. And it's hard enough to find a shop that actually has live devices, and they will nearly always be-
Ben: Oh, isn't that annoying! A shop that - they should be erased from the earth.
Rafe: They should be, I agree.
Ben: Plastic phones!
Rafe: It's a lot harder to get that working than you might think, because you can imagine the logistics of going into something like that.
Ben: I think other shops could be like that. You go, "Hello, I'd like to buy some trousers for 50 pounds, please."
"Well, I'm sorry, Mr. Smith, but we can't actually give you any trousers. But here's a picture of a man enjoying some trousers, and here's some plastic trousers of a completely different size and weight. Would you like to buy them now?" It’s just nonsense, isn't it?
Ewan: Well, that's what happens when I'm buying trainers. You know, I say, "Have you got these in size 10?" And they come back three minutes later and go, "Well, would you like to try them in size 9?" Right? "No." Surprisingly.
Rafe: No, surprisingly enough.
Ben: But it's not acceptable, though. So I don't see why it would be for such a high-value product, it's ridiculous. It’s absolutely ridiculous.
Rafe: And this is one of the reasons that Apple has been successful with their Apple stores in that they have provided first-class experience, and you can actually spend an extended amount of time using the devices. Still, it doesn't get away from the putting it in your pocket and having the full range of scenarios. And I think it's sad to say, for the kind of consumer electronics we're talking about, Smartphones are kind of unusual in that respect. I mean, even music systems, you can get an idea of how good they are. And laptops, which I do classify as mobile devices, actually you know what the kind of mobile experience or the software experience is going to be.
Ben: I mean, practically -
Rafe: Mobile is moving so quickly that actually one iPhone, from one generation to another, will actually be significantly different, even more so if you're switching from one ecosystem to another. Because I think a lot of people look at Android, or look at iOS, or Windows Phone, and they have an experience that's a couple of years old. And that can actually be really out of date and so they'll say things and have assumptions about a platform, or an ecosystem, that are just wrong.
Ben: Yeah. Yeah.
Ewan: Ergo, one pound, $1, we'll send you it. I think it's a nice way. The failure point, I reckon, is then saying, "And then you're going to pay 400 pounds, or $400, within 3 weeks." I reckon they should be saying, "And then, it's 70 pounds a month for X months." I think they should be making it just that bit easier for people.
Ben: So what other techniques have we seen that are effective for switching? Because we've got the device trade-in, there was some sort of media transferring services so things like iTunes match, and what's the Amazon one, where you can upload your music.
Rafe: It's the Amazon Music Cloud -
Ben: Yeah, I've got that.
Rafe: - will then do the same kind of music matching.
Rafe: We're starting to see, and HTC have done some of this, [crosstalk 19:19] an application that installed on the phone that will then go onto your other phones, see what apps you have, see what content you have, and offer to copy them across. Microsoft and Nokia both did the same sort of thing to try and carry to Windows Phone because, obviously, that's the ecosystem that has the biggest issue here, arguably. Apple hasn't done that much yet, but it wouldn't surprise me to see them, and there's a couple of third parties that are providing kind of these matching app services.
It's also going to start being interesting if you're around data and can you get it out of the respective Cloud systems into another one. And so, Microsoft has very deliberately made OneDrive in some of its clouds, so it's available for the other platforms on the basis that, even if it loses you from the hardware, it wants to keep you on its services. So there is Xbox video, for example, available for pretty much every device. Now that actually reflects Microsoft's role as a challenger, the third player, but I think we're going to see more of that kind of thing, because otherwise why would you make your service available on another platform?
Ewan: I think the pricing is really important, thought right?
Because if you’re a standard consumer, anyone I speak to, my family and friends and so on, it's when they go to the mobile operator or, worse, when they phone up, or actually, when the mobile operator phones them, it's terrible, because the mobile operator will phone, Vodaphone will phone my mother-in-law, and say, "Hey, get you an upgrade." She says, all right, and they go "What [inaudible 20:45] would you like," and then routinely send her something she doesn't want, and then she has to send it back and get an iPhone because they try to sell her some Android thing that's more profitable for them or whatever. But that's my worst nightmare, there, for these consumers. I'd like the consumer to be given a different opportunity, because typically when they're speaking to the operator, they're making a decision based on price, which is influenced directly by the mobile operator. By the operated sites -
Rafe: How the manufacturer is offering subsidies.
Ben: Exactly, yes, yes. So, if the manufacturer can actually say, "Well look, if you'd like to try this device, we will subsidize it." Now, I put this to Nokia a couple of years ago. I said, "If you want to get some degree of success, some degree of traction, why don't you make it easier for people to buy your devices outright? Why don't you lease it to them, why don't you give it tenner-a-month, or 20 quid a month or 50 quid a month, or whatever, and you can have the latest Nokia. But you'll always have the latest Nokia, every 3 months, every 6 months, we'll upgrade you. If anything goes wrong with the phone, we'll give you a new one. Try and remove the decision to be made, particularly in the U.K., for the consumers at the operator level."
Ben: What about when we move away from hardware and sort of those ecosystems, up to the app level? Because I was listening to Spotify the other day, and it's just...
Ewan: Come on, say something, say something…
Ben: I seem to have chosen it by accident. I don't ever remember sitting down thinking, "Right, that's it, Spotify is the one for me." But it just seems to be the service I use for streaming music. And now, and I'm not a heavy user, but I've got a few playlists, I follow a few people, I've got some likes, you know, that kind of stuff. I've got it set up on my Sonos system at home, and it wasn't hard, but it took five minutes ... Rafe Brandford’s having a bit of a yawn for himself -
Rafe: Oh, really?
Ben: Just boring Rafe Blandford. Blandford is like, "Enough with this tediousness, let us discuss Windows phones some more." So, I've invested a little bit of time and a little bit of effort in using it. And I'm thinking, actually, it's difficult enough to get me to switch my media that plays all these devices anyway, when you're physically just talking about just moving a file from one Cloud system to another. But what about when my data is kind of locked into these service providers? Kind of, all my messages, a lot of my messages are stuck in WhatsApp, forever. I'm never going to migrate them to another social app. All of my playlists are stuck in Spotify. I mean, even a good [inaudible 23:13]. Reluctantly, I have to admit that some of my family social graph, that I'm doing with kind of the bunny ears quotes there, is in Facebook.
Ewan: And it's increasingly difficult to extract the information to give me the freedom to go somewhere else. I mean, rightly, these guys, they want to make it easy for you to leave.
Rafe: Yeah, and it's interesting, you've chosen three services that are ecosystem-agnostic at the big level, but you're right. Switching within that sector, so if you want to go from WhatsApp to WeChat, or Line, or Telegram, or whatever it happens to be, it's actually quite difficult to do that, and there's very little discussion around that. And I actually think the ecosystems themselves are probably going to be forced to allow a certain amount of data portability, both because a lot of people choose to use third-party services that are, by their very nature, platform-agnostic. But within that - you know, the lock-in is just as serious, and potentially just as irritated.
Ewan: I think you're overblowing it, actually, I - what did it take for you to install WhatsApp? And what do you do with your existing SMS stuff now?
Ben: It's not so much… but I lose - it's all the message history -
Ewan: Do you need that? You want that?
Ben: I don't NEED it, but I -
Ewan: I don't need that.
Rafe: Who for Spotify, you've got the playlist, and recreating [crosstalk 24:34] those, you know, for each service there's going to be different level of lock-in.
Ben: In my messages, for example, when you and I are arranging to meet up, and I say, oh yeah, fine, 5:00, at this place, whatever, I won't write it down, because I know it's in WhatsApp.
Ben: But if that's the week I decide to change. For example, the week that I moved my work phone from a Blackberry to Android, I spent the week apologizing because I'd lost all the track record of all the SMS's and chat and everything previously, because it was just always there, you could just go back and look it up quickly.
Ewan: Right. And, so did you go back to Blackberry?
Ewan: Right. So I think you're overblowing here... I think it's slightly annoying, but now really, move on. Especially if you got a really good deal.
Rafe: The other interesting -
Ewan: That's what makes it easy.
Rafe: Yeah. The other interesting element here is that to make switching easy, you will often create a familiar experience, and so you'll see Spotify's competitors have playlists. Now, part of that is inevitable, because there are certain features you have to have. But I do worry that this kind of need to have switching does have a certain stifling effect on innovation. Now the thinking behind this is based on what, you know, it's psychologists will talk about switching, the switching effect, and the fancy name for it is the "Mere Exposure Principle." That's actually just translated to -
Ben: "Mere," or "near?"
Rafe: "Mere Exposure."
Rafe: Yeah. But actually the better name for it is the "Familiarity Principle". People will automatically prefer what they're familiar with and what they're using, even if it isn't a superior experience. And so it actually makes it harder for innovators to attract switchers, simply because they are doing something different and disruptive, and therefore people won't switch because they're not familiar with it.
Ewan: So, therefore, give them a good deal.
Rafe: Well, do you give them a good deal, is that going to be enough? Because actually, most of these services are becoming experience-led, and cost isn't always a factor, as we already discussed.
Rafe: And so, this is an issue, to a certain extent, on Smartphone platforms in that there's an expectations in that notifications, for example, are all delivered in the same way. And as a result, we've actually now got pretty much all the three major Smartphone platforms delivering notifications in the same way. We've talked in the past in 361 Degrees podcasts, they're actually really irritating, you'll have loads of notifications go off on multiple devices at the same time.
And it feels like actually that's a pretty dumb way to do it, but moving and doing it any other way risks sort of alienating people who might be switching. We've seen this with Windows Phone, there was a lot of people saying, "I'm not going to use Windows Phone, because there's no notifications." Microsoft always said that they did -
Ewan: Really? I …
Rafe: It was live tiles. I mean, there are plenty of other reasons, of course.
Ewan: Write this down, he’s trying to get back to Nokia again.
Rafe: There are plenty of other reasons. You could use another example. You know, people didn't want to switch away from Apple because they were invested in iTunes.
Rafe: And it wasn't really until the DRM disappeared and everything was MP3, and you got these matching services, that stopped that happening. And it worries me that that's going to happen lots more.
Ewan: And you're right about the experience, because the thing that stops me, well, one of the things stops me switching is the fact that if I want an app or a service on Apple, which is the ecosystem that I primarily live in, they’ve got my credit card details, click, bosh, done. It's like the reason I don't migrate away from Amazon - they've got my home address, they've got my credit card details on file, I can buy in a click. And to switch me to another store means I've got to do 50 or 60 keystrokes and a bunch of settings, just in order to give them the information in order to on-board me as a customer.
As a final point - can I ask you, do you think there is scope for the renting of a lifestyle? As in, would you consider renting a laptop, or doing a kind of a lease, or a hire, rather than having to buy one? Do you think that's something that we can be looking at?
Ben: Yes, I do, and I would be -
Ewan: How would you react to a Surface Pro, top of the range, for 35 pounds a month?
Ben: I'd say, "What have I ever done to you, and why are you picking on me?" But I would. And that's -
Rafe: Now you know how I feel.
Ewan: I do I suppose, yes. So hang on a second, let me just …
Rafe: Sorry Ben.
Ben: I was about to do some short jokes, but I won't because you're my friend and I respect you.
Rafe: Most of the time.
Ben: Most of the time. Except when it's funny not to. So, yes, I would be interested in renting some hardware, it might be a more convenient way to own it; but, to be honest, if you said, right, you can go, for your next laptop, you can go to the shop and you can buy the model you prefer versus being able to rent a challenger brand, maybe getting it more economically or spreading the cost, I don't think merely renting it would be enough. I think -
Ewan: No, it's got to be good quality, and -
Ben: Well, it's got to be good quality, but I think you've got to go further. You've got to not just rent it to me, you've got to on-board me, you've got to guide me through that switching process, you've got to help me solve my apps, you've got to have a migration assistant, you've got to be able to put all my backups out of the place that I store them.
Ewan: Do you think people are really caring about that? I don't think the average consumer would just to go out and buy an Android.
Rafe: But lock-in an ecosystem is something that's developed hugely in the last five years, and actually I think the reason this is an interesting question is, lock-in is only going to grow in the next five years as we put more data, more apps, more services into this. And where sort of the establishment of really three or four big ecosystems - and it's actually a real area for concern, because these things are right at the heart of our lives, and you need to, just as we talked in a previous episode about making smart, informed decisions around security, you need to do that same thing when you're thinking about services and apps and hardware.
To answer your question, Ewan, in a sense I already rent when I buy a phone, you know, have it on a contract. And now that increasingly, we're seeing a divorce of contract costs or service costs from hardware costs with subsidies, that's really what you're doing, you're paying 15 pounds a month. I do that for software, you know, I'm an Office 365 subscriber -
Ewan: You're the one, are you?
Rafe: - Adobe Creative Cloud -
Ewan: I found him! I should tell somebody! Who do I ring?
Ben: How much did you pay for the Creative Cloud, by the way?
Rafe: I'm just on the photo one, which is I think a tenner a month.
Ben: Right, okay.
Rafe: And I'm paying, I think it's 7.95 for Office 365 because it means I can have it on my laptop…
Ben: Actually, we ought to wrap it up, but just before you finish off, just one final thought that struck me the other day. You talk about the family piece, because Apple in the recent iOS 8 announcements and things talked about having family-style accounts where you could share the media, as long as you had a shared credit card you could have family accounts. And I wonder how far we are, right, before regulators start to pay attention to the really big ecosystems and start to destroy some of the lock-in characteristics, like getting whole families with their data stuck in an ecosystem so that I might want to move, but I can't because I'm tied in because my husband, wife, brother, sister, mum, dad, whatever, has decided to - like the U.S. family plans, you know, we're all tied in - how long is it before regulators start to say this is a bit anti-competitive?
Ewan: Wait until this happens, then they'll regulate it.
Rafe: And I'd make a comparison to a bank account, where the vast majority of people will end up with the same bank account as their families, their parents, and then it's very difficult to switch away from that - could the same thing happen with digital ecosystems? So, it -
Ewan: Is that you, did you choose your bank based on what your parents did?
Rafe: Yes, I did -
Ewan: And you're still banking with that?
Rafe: - and I've since switched away, but -
Rafe: - looked at some research from people, 50 % of people are with the same bank that they started with.
Rafe: And it's a whole different topic, but there is -
Ewan: It's a long way to go to Luxembourg to visit your private bank, isn't it, to switch, so...
Rafe: Okay, thanks, I knew you'd find some way to insert a joke.
Ewan: Don’t talk about the estate. Don’t talk about the private bank accounts or the trusts.
Rafe: Bring it back to switching - I don't actually think that cost gimmicks are going to make a big difference. Where I do think it is important, as Ben said, is to remove as many barriers as possible in the switching process. Cost is one of them, but I think the bigger piece is around your data and apps. And the problem is, if you go onto the next model of Apple, or Google, or whatever it happens to be, we've now got to the point where you can restore it back up and pretty much continue using your device in a matter of minutes.
Rafe: Whereas you switch from one ecosystem to another, it's not just hours, it's quite often days of work to get up and running again.
Ben: We've a lot of North American listeners and some of them actually might be considering these kind of offers because you're in the market, so let us know. Is this a good value? Is this appealing? Have you done it? Did it work?
Ewan: Give us the context.
Ben: Was it smooth? I want to know actually did it work as well. Because I look at these offers sometimes and I think, yeah, that's nice, but it's not going to work.
Ewan: Well it did say selected -
Ben: Selected, they'll be some limited models, or you'll get a voucher, or it won't be good enough -
Ewan: You'll get the voucher 30 days later or something.
Ben: Exactly. So let us know. And, as always, you can follow us at 361 Podcast, we're on the website 361podcast.com, where, of course, don't forget, there is a 3-question survey, and if you feel so inclined, you can leave us a comment, drop us an email, or send us a tweet. Thanks for your time, gents.
Ewan: Lots of love.
Ben: As ever, always great fun, we will be back next week with another one that we haven't yet planned. Bye-bye