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EMI Executive Warns: Listening to Customers Shouldn't be Apple's Privilege

Wednesday, March 28th, 2007 at 2:35 PM - by

The EMI Group's chief executive Eric Nicoli warned the mobile phone industry at the CTIA conference that they need to work together and put the customer first if they want to reach their potential, according to C|Net on Wednesday.

"We will not reach our goals if we carry on as we have been doing," Mr. Nicoli said. "...that means we must put the customer at the forefront."

Referring to the Apple iPhone, Mr. Nicoli said, "Apple makes stuff that people love to own....They love the simplicity and user-friendliness of the iPod and iTunes. Apple doesn't employ any sorcery or dark magic to achieve this. They listen to what consumers want. And that shouldn't be Apple's unique privilege."

The EMI executive also noted that they had achieved some "interesting and promising results" selling unprotected music from a few of their artists.

Mr. Nicoli reiterated that that the status quo in the mobile phone industry is no longer an option, and he advised the members to begin to work together in a more thoughtful way.

The Apple iPhone is having a significant effect on the industry executives, "And the company isn't even showing off the device at the CTIA trade show," the report said.

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gopher said:

member since 28 Mar 2002 with 291 posts, unranked, send him a message or view his profile

Wed Mar 28, 2007 3:29 pm

Cell phone industry needs better regulation.

I went to get a Cell Phone at a mall convenience shop designated just

for Cingular wireless subscriptions, and what was given to me was a terrible bait and switch. The price shown on the phone was not the price they wanted for it. Why? I chose a lower priced plan. They wanted me to spend $60 extra on the phone. I negotiated a lower price by tagging on an extras package that included instant messenging. Later that weekend, I stopped by the Cingular wireless store in Dupont Circle in DC, and they told me they never charge a different price on the phone no matter what plan is chosen. Inconsistent pricing practices by the same cell phone company should never happen. I called Cingular tech support the next day and they waved the extra portion of the plan altogether.

There are disadvantages for pay as you go as well, as you have to keep on refilling your minutes. The one company that offers an in between plan doesn't stock enough high quality phones to meet demand. They have a hybrid plan which lets you pay month to month and get all the same services as a 2 year plan. Alas, the only phone not likely to be damaged in their options was out of stock everywhere I looked locally. It was Amp'd.

Apple could really revolutionize the industry by offering a phone that can be used with any plan by any company. So far they haven't.

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A guest said: (hide)

Wed Mar 28, 2007 4:49 pm

There is one point where he is wrong: Apple doesn't listen to what consumers want. How many consumers have asked for an iPod? How many had a long list what they would want in a phone, and found that the iPhone delivers everything on their list? Nobody. Apple doesn't try to build things that people ask for. They build things that people didn't even think of.

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Biff said:

member since 08 Apr 2004 with 1479 posts, unranked, send him a message or view his profile

Wed Mar 28, 2007 5:04 pm

Gopher, I'm sorry you were disappointed after you failed to read the fine print and got all excited by the price. But thats not something specific to the cell phone industry. Here's an idea: Instead of having the government do everything for you, you can learn from this and become an educated consumer. You could have shopped around, but you obviously wanted a phone right then and bought on impulse. We've all done it. But it is that crappy Mall kiosk's right to be able to specialize in selling to uneducated consumers. It's a cell phone. It's not like they are selling food and jacking up the prices during a crisis or something.

And what on Earth does this have to do with the article?!? Oh well I understand you wanted some place to vent.

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A guest said: (hide)

Wed Mar 28, 2007 5:15 pm

That's a good article, but misses a key point:

Apple's greatest successes have not come from listening to customers. They have come from thinking ahead of customers -- about things the customers don't know that they want yet. Too much listening to customers can actually stifle innovation.

To succeed with this approach, though, you have to be really good, and a little lucky. Apple has been both.

Kim Hill

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A guest said: (hide)

Wed Mar 28, 2007 6:12 pm

Biff wrote:
Gopher, I'm sorry you were disappointed after you failed to read the fine print and got all excited by the price. But thats not something specific to the cell phone industry. Here's an idea: Instead of having the government do everything for you, you can learn from this and become an educated consumer. You could have shopped around, but you obviously wanted a phone right then and bought on impulse. We've all done it. But it is that crappy Mall kiosk's right to be able to specialize in selling to uneducated consumers. It's a cell phone. It's not like they are selling food and jacking up the prices during a crisis or something.

And what on Earth does this have to do with the article?!? Oh well I understand you wanted some place to vent.

I'm not the same guest you're berating, but I have to say Biff that that is a terrible and also wrong-headed reaction to what that gentlemen went through.

First off, not everyone has the TIME to become an expert on the cellphone industry in order to become the 'educated consumer' you idealize. People have jobs, they have families, they have LIVES. It's not too much to ask that companies who want our money exist at a level somewhat north of used car theives... er, salesmen.

While you personally have an ideological bent against government regulation, that does not mean that should be the primary deciding factor as to whether and when government does restrain the nasty practices of some in the private sector. Government should protect its people sometimes. Feel free to call me a socialist later, even though it ain't true.

Second off, things have gotten pretty bad in the cellphone industry, especially of late. The Better Business Bureau's No.2 source of complaints is the cellphone industry. And in most surveys, consumers put the credibility/integrity of cellphone salesmen right down there with the used car salesmen I mentioned previously. And for good reason- they lie, lie, and then lie some more. I've experienced this in person myself, multiple times, and called them on it. But most people, having lives and little knowledge compared to their dishonest salesfolk, shrug, give up, bite the bullet and move on. This makes the wireless carrier industry as a whole look like sheeite (the Brits would say 'rubbish').

It's actually in the industry's own self-interest to clean up their act. There's many people out there who've been bilked and who'd probably move ASAP to a carrier that treated its customers in the same way that, say, Saturn car dealerships did. But somehow, the 'market is out savior' mechanism is not working here, either because there are so few major carriers in the US (the Big Four have 85% of the market), or because they all are very content with things as they are. What is known is that the industry fights tooth and nail against anything that could change the status quo.

Given that, sooner or later the government WILL step in. In fact, it's already started to, with things like the Telecommunications Customer's Bill of Rights in California (which was enacted, over intensive carrier lobbying against it, and then suspended later among Arnold's political shenanigans, but remains deeply popular).

Sorry Biff, but the history of things like this is, once they get bad enough, said industry either cleans up its own odious pig sty, or the government does it for them. This industry isn't interested in cleaning up its own stink, so the writing is on the wall. The only question is, how long will it take.

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

Wed Mar 28, 2007 7:11 pm

gopher wrote:
Cell phone industry needs better regulation.

I went to get a Cell Phone at a mall convenience shop designated just

for Cingular wireless subscriptions, and what was given to me was a terrible bait and switch. The price shown on the phone was not the price they wanted for it. Why? I chose a lower priced plan. They wanted me to spend $60 extra on the phone. I negotiated a lower price by tagging on an extras package that included instant messenging. Later that weekend, I stopped by the Cingular wireless store in Dupont Circle in DC, and they told me they never charge a different price on the phone no matter what plan is chosen. Inconsistent pricing practices by the same cell phone company should never happen. I called Cingular tech support the next day and they waved the extra portion of the plan altogether.

What you probably ran into was a kiosk run by a separate company that sells Cingular phones and plans. They get a cut from both and can negotiate; Cingular's own stores cannot. The kiosk probably charges a bit more for the phones and plans, as well. It pays to shop around before you buy. [quote="Guest"

I'm not the same guest you're berating, but I have to say Biff that that is a terrible and also wrong-headed reaction to what that gentlemen went through.

First off, not everyone has the TIME to become an expert on the cellphone industry in order to become the 'educated consumer' you idealize. People have jobs, they have families, they have LIVES. It's not too much to ask that companies who want our money exist at a level somewhat north of used car theives... er, salesmen.[/quote]

First, if one is going to make such a purchase, which involves a lot of money over time, one can certainly do a bit of shopping around. It certainly is difficult to compare plans between carriers, but it's not difficult to compare Cingular plans from various sources. It doesn't even take much time. An hour spent checking out web sites, including Consumer Reports and specialty sites devoted to cell phones would give a lot of information without even leaving the house.

If one does not protect oneself by shopping around, one can expect to be disappointed on occasion. (In real estate, there's a phenomenon known as "buyer's remorse," even when there has been full disclosure.) If a retailer engages in deliberately deceptive or unethical practices, that's one thing. If I allow myself to be taken in or to make major purchases on impulse, I must bear some personal responsibility, especially if there were easy ways to avoid the problem.

I check the prices of DVDs, for example, on 5 different sites before buying. I recently ordered a $300+ camera. I checked the prices (and [urkl=http://www.resellerratings.com/]reputations![/url]) on over 15 sites and several local stores before ordering. Even before that, I read at least a dozen reviews of that camera and several dozen reviews of similar competing cameras. One doesn't have to go to that length, but there is a lot of information that could inform one's decision. When I bought a cell phone and, later, when I switched carriers and phones, I spent over a month getting information and making a decision. The factors in my decision were probably different from gopher's, but, at least, I knew the facts and made comparisons, as best as I could.

Don't get me wrong: I'm in favor of some added regulation of business, if for no other reason than that corporations are not accountable to anyone (not even their stockholders, given the way things usually work). Worse, in the past 26 years, at least, the US has been heading more toward "corporatism," where the interests of corporations and government merge and become indistinguishable, regardless of the impact on people.

However, all the regulation one could think of, short of price fixing, wouldn't have helped gopher's problem. It's rather like phishing: it's illegal and I hope that a goodly number of perpetrators end up in federal prison soon. However, they target people who are 1) uninformed, 2) credulous and/or 3) authoritarian (i.e., they are not inclined to question something that appears to come from an authoritative source). Their schemes don't work on people who understand a little about how things work, think critically and (or) are skeptical by nature, training, or experience. It can be hard to overcome 2) and especially 3), though bitter experience can be a great teacher, if at a great cost. It's easier to tackle the uninformed aspect, but that may involve active participation by the person learning. I would love to see schools teach critical thinking, teaching kids to question what they see, hear, read, and are told, regardless of the source. (I even came up with a title for the course--"Critical Thinking" is too dull: "Scams, Shams, and Spam.") I'd like to hear kids respond to wild claims with, "Oh, yeah? Prove it."

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A guest said: (hide)

Thu Mar 29, 2007 12:02 am

Go back and re-read the guy's post. The problem he ran into was classic bait-and-switch, plus the salesman out and out LYING to him to get the sale.

Reading Consumer Reports isn't a magic defense against any and all unethical sales behavior, much as we might like to believe otherwise.

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A guest said: (hide)

Thu Mar 29, 2007 9:06 am

When a record industry exec is telling your industry you need to listen to the customer, you're in trouble. Nobody treats their customers worse than the record industry, except the cellular and airline companies.

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A guest said: (hide)

Sat Apr 07, 2007 9:40 am

Apple does listen to consumers in creating products. Prior to its release, nobody specifically called Apple and said, "I want an iPod", but Apple understood that people wanted a simple, integrated approach to portable audio, and listened to that understanding.

When you use the typical cell phone, you are presented with a mish-mash of inconsistent menus, tiny buttons that change functions in non-intuitive ways, and a tiny, practically unuseable screen...in short they basically suck. So-called MP3 phones are an even bigger joke, especially compared to the elegant iPod.

Lots of CE companies hire "focus groups" to tell them what consumers want, and contract with outside ID firms to guide them in the design of new products. This approach to design is a frank admission that they haven't got a clue what the typical consumer wants.

Apple, on the other hand, doesn't use "focus groups", and they lead the CE world in industrial design. They can do this because they understand what consumers want, and listen to what the market tells them.

The choice for me is simple: do I want products that are designed by clueless commitees, or do I want products designed and sold with confidence by a company that understands me?

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