From the desk of Compete’s Wireless practice.

With a first glance at holiday shopping behavior, there seems to be a fertile opportunity for the much anticipated iPhone. With over 33% of all wireless phones now being music enabled, Compete found that holiday interest in music phones made up over 53% of all December cellphone shopping interest. There were just over 3 million total music phone shoppers in December, and almost as many iPod shoppers, with 2.7 million consumers evaluating iPods online, something that would seemingly signal a perfect opportunity for a peanut butter and chocolate combination.

Surprisingly, through Compete’s unique perspective of online behavior, Compete found that only 5% of all cellphone shoppers also evaluated an iPod in December, and only 3% viewed both a music phone and an iPod.

This lack of overlap illustrates the clear delineation that currently exists between music players and cellphones, the very gap the iPhone is hoping to bridge. One way to do this is to focus on the current iPod segment, especially since among consumers who shopped for both an iPod and a cellphone, 63% of those cellphones were music enabled.

When Mr. Jobs announced his intention of selling 10 million iPhones in 2008, you would think the current iPod community is ripe for the picking. Maybe, but break out the iBates. Even among the diehard segment of iPod shoppers who said they are very likely to buy an iPhone, only 6% said they would pay over $400.

A week after the historic announcement of the iPhone, Compete behaviorally targeted online iPod shoppers to get their take on the supposed must-haveware. 75% of these iPod shoppers had already heard of the iPhone, and a healthy 20% said they would postpone their next cellphone purchase to wait for it. 20% also said they would postpone their next music player purchase, not bad for a device unavailable for the next six months.

What does this mean for the carriers? The good news for Cingular is that 12% of iPod shoppers said they would be very likely to switch carriers to get the iPhone. The bad news is that of the people who are not willing to switch, over 30% cite Cingular’s service plan pricing, and another 35% cite Cingular’s coverage. Of the people not likely to switch, almost 40% said they had no interest in purchasing a combination music player and phone, and over 55% said their current carrier has cellphones that meet their needs.

It is clear that Apple and Cingular are targeting a niche market with a higher priced, dual threat device, but the biggest barrier remains the price. As the RAZR and the recent influx of consumer oriented smartphones have proven, the magic number seems to be closer to $200, or a couple hundred free iTunes.

For more information please email wirelesspractice@compete.com.

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Every few years, video gamers of all ages collectively rejoice with the dawn of a new generation of game consoles. The long-awaited 7th generation console battle, which began with the launch of the Xbox 360 last November, heats up in earnest over the next few days with the release of Sony’s PlayStation 3 (PS3) and Nintendo’s Wii. The stakes (and prices) this time are higher than ever.

The ubiquitous PlayStation has sat atop the gaming world for over a decade. Sony, however, has lost some of its luster of late and is counting on the PS3 to help right the ship, drive adoption of its nascent BluRay DVD format, and of course, help it maintain its video game dominance. It’s a tall order for one machine, let alone one which will shatter the price ceiling for game consoles and arrive in only very limited quantities for the holidays. These supply constraints are certainly not the elixir Sony needed.

Microsoft, with a year head start, has raced to an early lead with over 6 million Xbox 360 sales to date — this despite not having a Halo title to drive interest. Nintendo opted out of the graphics arms race this time around, and instead has focused on a strategy of making the Wii innovative and easy to use.

Plenty will be written about how these consoles compare on a feature by feature basis; however, comparing demand for each console provides insight into how well each is faring in the marketplace even before the Wii and PS3 hit store shelves.

Note: Compete, Inc. calculated console demand based on the number of U.S. consumers who shopped for the respective consoles at leading online retailers.

The chart above shows the monthly U.S. demand for each console. Demand for the Xbox 360 spiked to nearly 1.75 million U.S. consumers when it arrived last November. So far this year, the Xbox 360 has attracted an average of 418,000 U.S. shoppers each month. In the meantime, PS3 and Wii demand has been steadily climbing in anticipation of their release. PS3 demand surpassed Xbox 360 demand for the first time in September. Wii accomplished that same feat in October. Demand for all three consoles should spike this month with the Wii and PS3 launching and the holiday shopping season beginning.

Sony will undoubtedly sell all the PS3s it can ship this year, but what are the long term prospects for it as well as the other consoles? How long will the Xbox 360’s lead last? A sample of the findings from Compete’s October 2006 survey of active current-generation console gamers confirms that this race is anything but decided.

Though much has been made in some circles about the PS3’s hefty price tag ($600), word has apparently not reached most consumers…many of whom have the PS3 on their shopping lists. In fact, almost half (48%) of those considering a PS3 expect it to cost less than $300—equivalent to the original price of a PS2. When told of the PS3’s actual retail price, 73% of all gamers and 59% of those considering a PS3 thought it was overpriced. Wii fared much better and many of its buyers will be pleasantly surprised by its value. Among those considering a Wii, 75% expected it to cost more than $200. It goes on sale for $250.

Wii’s price may be right, but a troubling sign for Nintendo emerges on the loyalty front. Nintendo’s strategic decision to simplify its console may in fact be turning off a number of its loyalists. 39% of GameCube owners are considering a Wii purchase while 40% are considering a PS3. PlayStation loyalty is considerably higher with 63% of PS2 owners considering a PS3.

It’s bound to be an exciting, albeit potentially frustrating, holiday season for you if you are a gamer or have one on your shopping list. On the one hand there is now a choice of three amazing video game consoles, all of which have their advantages: the PS3 has the bells and whistles; the Xbox 360 has Xbox Live and a library or titles; and the Wii has its franchise games and revolutionary controller. On the other hand, Wii supplies may be limited and PS3s will be near impossible to find, so getting a hold of either one will be tricky and expensive (Read: ebay markups). That being said, I’m sure Microsoft will be more than happy to sell you an Xbox 360 as a substitute.

Here we are, Election Day, and it’s all just about over except for the shouting. Trouble is, I think there’s going to be plenty of shouting come tomorrow. We might not know the outcome of some of these races until well into the wee hours of Wednesday, and both the Wingnut and Moonbat contingents will doubtless be hollering if their side comes up on the short end of the stick.

A few days ago we conducted a survey among people who had visited one of four politics-oriented sites: HuffingtonPost.com and DailyKos.com on the Progressive side, LittleGreenFootballs.com and MichelleMalkin.com on the Conservative side. We categorized respondents based on their relative level of interaction with each site. For instance, if they visited one of the progressive sites far more than the conservative sites we categorized them as “MOONBAT”. If they visited the progressive sites a little more frequently we categorized them as “LEANS MOONBAT”, and so on. Remember, their categories were determined by their observed online behavior during the past 6 months, not by self-reported recollections.

Given the tendency of conservatives to visit conservative sites and liberals to visit liberal sites, most of these results aren’t too surprising. But if these are anything, they are certainly a testament to Compete’s ability to categorize based on behavior. Consider, for instance, that 83% of WINGNUTS and 64% of LEAN WINGNUTS identified themselves as Very or Somewhat Conservative, while 75% of MOONBATS and 51% of LEAN MOONBATS called themselves liberal or very liberal. That sounds about right.

The conventional wisdom says this election will be a referendum on both the War in Iraq and the Presidency of George W. Bush. When asked about those topics, the results split predictably, with MOONBATS showing strong negative opinions of the President. It’s interesting to note that, while WINGNUTS generally have a favorable opinion of Bush, their level of support is not nearly as strong as the MOONBAT level of disapproval.

The same is true regarding opinions on the War in Iraq, with MOONBATS showing overwhelmingly negative opinions and WINGNUTS having more mixed reviews.

So how will they vote? Again, no surprise. MOONBATS are backing the Democratic party and WINGNUTS are all about the GOP:

Of course some of the most interesting findings were from those who we couldn’t clearly define as MOONBATS or WINGNUTS. These were the people who were getting their information by checking both sides of the story, and it’s their opinions that can determine whether a site is changing opinions or merely preaching to the converted. We’ll have to save THAT analysis for another day, maybe when Howard Dean, Ken Mehlman, Karl Rove, or James Carville come calling…with a bag full of cash.

One last thing: we asked every respondent to tell us, in their own words, what was the most important issue facing the United States today. The answers are passionate, creative, mildly profane, and very entertaining. My favorite is the one that talks about the need to fight wars with Lazer Beams. It’s worth a read! If you’d like to review them, you can view the entire file here .

Part I Summary:

In September of 2005, Scott Blum, the CEO of Buy.com announced in a TV commercial that his online shopping site would offer 10% off Amazon’s prices on books. Recently we analyzed Buy.com’s “10% off Amazon prices” campaign to measure the effectiveness of this David vs. Goliath approach. We found:

• After launching the campaign, Buy.com’s traffic grew relatively faster compared to Amazon.com during last year’s holiday season.
• The percentage of Amazon.com shoppers considering Buy.com nearly doubled in the months following the campaign launch.
• The campaign did not improve Buy.com’s conversion rate.

Our initial findings suggest Buy.com’s campaign was successful; however there are additional questions that need to be addressed before we can arrive at a definitive conclusion:

• Was the campaign solely responsible for Buy.com’s traffic lift?
• Did consumers understand the promotion was limited to books?
• Did Buy.com win the hearts and future purchases of legacy Amazon.com shoppers?

To explore these questions we reached out to people that shop at both sites. Using Compete’s targeted Consumer Input survey service we interviewed 170 individuals that were observed shopping at both Buy.com and Amazon during the promotional period.

Awareness/Behavior:

Compete found that 32% of shared shoppers were aware of the promotion. However, the majority of these respondents indicated their motivation to consider Buy.com was unrelated to the promotion. Of the ‘promotion aware’ respondents only 28% agreed or strongly agreed that they shopped at Buy.com because of the promotion. This indicates that only 9% of shared shoppers were positively motivated by the Buy.com campaign.

Understanding:

Did shoppers fully understand Buy.com’s “10% off Amazon prices” promotion? To its credit, Buy.com cleverly de-emphasized the details of the promotion playing down the special pricing applied only to in-stock books. In fact, the motivation of this article was a disgruntled Compete employee who didn’t pick up on the “only books” limitation. To measure the effects of this strategic ambiguity we asked ‘promotion aware’ respondents what their understanding of the campaign was. We provided five answer choices and found only 43% understood that the deal applied only to books.

Preference:

Buy.com successfully engaged 28% of promotion aware shoppers to return for future shopping. Despite the efforts from the Buy.com camp, Amazon.com remains the preferred site of overlap shoppers. In fact, 63% of respondents ranked Amazon.com their most preferred online store, compared to just 5% for Buy.com.

Conclusion:

Buy.com’s head-to-head promotion versus the mighty Amazon was inspirational, but only slightly effective in the grand scheme of internet retailing. Yes, the promotion increased visitor traffic and did lure existing Amazon shoppers; however, its long term effects are limited.

• Only 9% of shared shoppers – those who shopped at both Amazon and Buy.com – indicated the promotion positively effected their intentions on Buy.com.
• 58% of promotion aware shoppers did not understand the promotion was limited to books. Consumers who discover this detail and see it as a bait-and-switch might establish negative sentiments.
• Buy.com continues to struggle to become the preferred retail destination of shared shoppers with only 5% citing Buy.com as their preferred retailer compared to 63% who prefer Amazon.

Buy.com yielded a small win with its “10% off Amazon prices” promotion, but it’s clear they will need to pull out a few more tricks to truly challenge Amazon.

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Back in July, we gave you a taste of a Fantasy Sports piece we had been working on. Well guess what? Here for you today is the complete, unabridged version. Check it!

Online fantasy sports are big…real big. In September of 2005 over 9.5M people in the U.S. were involved in a fantasy sports league through one of the three largest fantasy services- Yahoo, Sportsline and ESPN. To put this in perspective, the volume of people playing fantasy on these three sites equates to the population of Michigan. As such, fantasy sports have emerged as big business and changed the way sports are viewed, reported and discussed. We won’t go so far to say Fantasy Sports has changed the world, but it certainly is an interesting topic to investigate from a social and business perspective.

To peel back the layers of Fantasy Sports, Compete investigated the online fantasy sports activity of its 2M member panel and conducted a behaviorally targeted survey of 300 people who exhibited both free and paid fantasy sports participation. The purpose of the study was to better understand:

• Which services (Yahoo, Sportsline, or ESPN) are delivering the best fantasy experience?
• Who is the fantasy sports enthusiast?
• What drives people to pay for fantasy sports leagues?

Market Share

All three of these sites offer free public leagues as well as private paid leagues. Although Yahoo garners the lowest satisfaction mark it also yields a commanding 68% market share of the combined free and paid market. While Sportsline and ESPN are leaders in the niche online sporting news market, Yahoo has the advantage of being the largest national internet property (120M monthly visitors) and one of the most recognized and trusted online brands.

Where the ladies at?

Of no surprise, the majority of Fantasy players are males (70%); however we are excited to announce that females are getting involved. Female participation has seen healthy growth in recent years. While 53% of the men surveyed were participating in fantasy sports for 5 years, only 23% of the females have participated for as many years. Regardless of their tenure, these women are in it to win it and every bit as much as their male counterparts. When asked “Do you root for a player that is on your fantasy team even when he plays against your favorite professional team?” 59% of females agreed compared to only 56% of males.

Despite the emerging enthusiasm for Fantasy among females, the majority of the participation is for football and not baseball or basketball. Men, on the other hand, enlist in both football and baseball at an even clip. Females find the 16 game football schedule much more engaging than the 162 game, 6 month long, baseball calendar.

Continue reading “Final Fantasy” »

You probably don’t know what MVNO stands for (Mobile Virtual Network Operator) or what an MVNO does (uses an existing wireless network, jazzes up the service and phone and markets under a different brand) but turns out you just might be a lot more familiar with an MVNO than you realized.

The idea behind the MVNO concept is that an existing brand or even a completely new brand can piggyback off an existing wireless network (think Sprint’s or Verizon Wireless’s) and create a more relevant wireless experience for very specific demographic or cultural segments. Amp’d Mobile and Virgin Mobile USA are music and pop culture-focused services with slick handsets for the rock and rollers. Boost Mobile targets the hip-hop and extreme sports crew. Disney Mobile offers parents the ability to monitor and control their child’s phone use and offers attractive family plan packages. Mobile ESPN caters to the hardcore fantasy sports and stat checking crowd. And there plenty more already out there or on their way.

So to recap, the MVNO gets cheap access to an expensive wireless network while their partner (again, think Sprint, Verizon Wireless, etc.) gets a share of their profits. MVNO life is good, right?

Not exactly. I don’t have a single friend that uses any of these services. I know, I know – I don’t have any friends to start with, but I haven’t even seen a stranger walking down the street using an Amp’d or ESPN phone. Have you?

However, it appears that MVNO’s are finally getting some notice. 40% of people are aware that ESPN offers some type of wireless service. 28% know that Disney offers the same. Awareness of brands without the luxury of a massive Fortune 100 company backing them, such as Helio and Amp’d, lag ESPN; however, it’s still impressive that 1 in 4 people have heard of the Amp’d service.

Now, all they need are some people who will buy them.