Google's experience with the Nexus One over the past couple of weeks shows that even though there are great wireless Internet devices, wireless is not the Internet from the standpoint of sales and service. As we start connecting a much greater number and variety of devices over wireless networks, customer service is an issue we're going to be talking much more about over the next couple of years.
Business models are evolving quickly: The past three years have seen a tripling in the percentage of subscribers who are not on a postpaid plan; we're seeing a growing number of "unlocked" and "open" devices; and devices embedded with wireless capability, such as ereaders, that have a very different revenue profile, as far as the operator is concerned. At the same time, smartphones and other advanced devices are becoming increasingly complex. It is not clear who should own the customer service responsibility for this panoply of devices and applications.
Let's compare the wireless industry with the rest of the Internet and most of the consumer electronics world. Wireless operators still retain a large part of their legacy "telephony" business, operating large customer service organizations, employing tens of thousands of people at call centers that are still, thankfully, located in the United States. Even though wireless customer service has not always enjoyed a stellar reputation, wireless customers still expect to be able to call a number, and have nearly any manner of question handled by a customer service agent--for free. Or, they might take their phone to one of the more than 10,000 full service wireless retail stores in the United States, where nearly one-third of the employees are in some sort of customer or tech support role. It is true that wireless operators have undertaken a huge and largely successful effort over the past few years to implement "self service"--on the device, or via "my account" portals on their websites--for routine customer service functions, in order to reduce cost. But they have also had to significantly increase resources allocated to "wireless data technical support" personnel and training.
Now, let's contrast this with the Internet and most consumer electronics devices. Have any questions about or problems with the software you just bought from Microsoft or Intuit, or that PC from Dell? Well, as I'm sure many of you are intimately acquainted with, getting help is no picnic. Customer service is either outsourced to overseas call centers, where the experience is uneven at best. In many cases, customers have to pay for service. In wireless, customer service is a huge part of opex. For other companies, it is a giant revenue stream. And many third-party companies, such as Geek Squad (owned by Best Buy) have stepped in to fill the vacuum. Here's a personal example: A few weeks ago, I bought an Iomega back-up drive at Best Buy for $150. Brought it home, and out of the box it simply did not work. Went to the Iomega (owned by storage giant EMC) website, and discovered that there is no possible way to talk to a human being at Iomega. The only semi-human option was an onerous and time-consuming "live chat" session (available for free only for the first 90 days of product ownership), where I grappled with how to explain "loud buzzing noise" or what cable I was connecting to what port. Mission unaccomplished, I called Best Buy, where after three phone calls I ended up at Geek Squad, and was asked to pay a "per incident" support charge (despite Best Buy's full-page newspaper ads over the holidays offering customers "help installing and using their holiday purchases"), which I (less than politely) declined. Two days later, I returned the product, grateful I suppose, for not being charged a "restocking fee." ...Continued