Pi-Consulting

Americans are spending $27 billion a year on alternative medicines, the US government estimates. The attitudinal basis for this migration from mainstream medicine is complex. Not all the people switching their allegiance to non-mainstream treatments seem to care that there is little evidence that they work, or reassurance that those offering them know much about curing what ails them. Some experts are suggesting that the shift is an expression of disappointment and disillusionment with conventional medicine and its practitioners. Many sufferers are shrugging and turning to advice from family, friends and natural-remedy information sources. Most know that there is little official oversight of there treatments and prescriptions, yet in 2004 a staggering 48% of all adult Americans resorted to at least one alternative or complementary therapy. Aside from waning faith in the healthcare system in general, and doctors in particular, there is also “a powerful element of nostalgia… for home remedies… combined with an idealized vision of what is natural and whole and good”, according to Dr. Linda Barnes, an anthropologist at Boston University’s medical school. Such ‘nostalgia’ harks back to the words of Hippocrates, (he of the Hippocratic oath), who said “wherever the art of medicine is loved, there also is love of humanity”. Pharmaceutical companies please copy. (Source: New York Times, Pi Market Research).

South Korea is already the most ‘wired’ country worldwide, thanks to an active policy of government subsidy for tech research and new technologies themselves. Consumer electronics devices that are still classed as ‘futuristic’ in the USA and elsewhere are becoming commonplace in this densely-populated Asian country. In ten years, broadband internet connections have been hot-housed into 72% of South Korean homes. Since the beginning of the year TV programs have been receivable on mobile telephones, a free service bankrolled by the state. This month Koreans get WiBro, a super-high-speed wireless internet service available nationwide, and representing the first step towards an “always online” facility. Over a third of citizens are already hooked up to Cyworld, a web-based “parallel universe” which interconnects the entire user base through web pages. Society is already changing in subtle ways accordingly, from electronically speeded-up shifts in political opinion to electronic vigilantes naming and shaming urban doggy-poop transgressors. (Source: New York Times).

“Call you back, I’m on the other application…”

Is it a bird? Is it a plane? Naw. Don’t get over-excited, now, people, it’s still basically just a cellphone.

One large worldwide purveyor of mobile telephony hardware, based in South Korea, is advertising its latest cellular telephone with the arresting claim that we should “Imagine a phone you can’t live without”. How ready are we to believe them?

We’re all supposed to palpitate with emotion at the mention of 3G (that’s third-generation to you and me) cellphones. They cruise the internet! They play music! They let you watch TV clips! They let you play live games online! They send e-mails and photos! They file your tax return! (Actually we made that last one up). The problem is, a gap is beginning to open up between consumers’ expectations of their cellphones and cellphone manufacturers’ expectations of their consumers.

At the root of the problem is money. As one heavily-committed cellphone enthusiast put it, “They hit you with all these extra charges, so you don’t want to use the thing”. Our hero (we’ll call him Buzz) subscribes to multiple mobile telephony services, and is now finding something like $60 per month being added to each of his bills. And, to top it all (technophile though he assuredly is), even Buzz is beginning to find it quite complicated to figure out how to use all the new features available on his handsets.

American mobile phone services have spent around $10 billion in three years on upgrading their networks, in the hope of making Buzz ecstatic, as opposed to just happy, which he was anyway. 3G has cost them dear, and Buzz doesn’t seem to be thanking them profusely enough. Which worries them because, if a self-confessed phone freak like him is hanging back on their offerings, where is the huge crowd of mainstream consumers they are going to need in order to recover their investment? It could take years for them to materialize in the required numbers.

Two mathematical equations are on a collision course. The industry’s math says that, with exotic new services on offer, consumers will find the money somewhere to pay for them. Consumer math, at least as calculated today, is starting to resent the monthly amount that existing voice-only cellular services are costing them, and is looking for ways to cut back even on that investment. There are enough markets like Japan and South Korea where 3G systems are already up and running to show that Consumer Math could trump Industry Math for quite a while after the 3G upgrade becomes available. Both countries found that it has taken several years and several rounds of price-cutting before consumers felt good enough to trade up in significant numbers to the new data and entertainment features on offer.

American carriers are being cagey about their 3G sales results to date, but industry analysts tell us that there are fewer than five million 3G phones in use in the USA, i.e. only about 3% of the market. Worse, a third of those phones are not even connected to 3G services, implying that some technophiles are more interested in their phone as a fashion accessory than as a conduit for infotainment in new and exciting forms. This thought is echoed in Japan, whose pioneer market status has seen customers upgrading to the new phones , yet actually reducing their individual monthly expenditure on services.

Some new services do seem to be finding a market. Delivery of data services to cellphones has doubled in a year in America, and big carriers like Sprint Nextel, Cingular and Verizon count on these for around ten percent of their revenue already. Sprint Nextel point to a million music downloads in the four months since their October 2005 launch (some were freebies, they admit), while Verizon claims that in a similar period its customers used their handsets to send over 7 billion text messages and more than 130 million photos.

Yet it seems that in some cases manufacturers are not adding new applications to their handsets in response to real consumer needs and demands, but simply because they can. How badly do people want their telephones to do all those other things anyway? We don’t yet require our dish-washing machines to double up as microwave ovens or lawn-mowers, after all. And much cellphone-to-cellphone data traffic can be handled by conventional non-3G handsets anyway.

Industry analysts Forrester Research put their finger on an underlying problem that may go even deeper than pricing issues: most people still look at these devices as simply telephones. Says a Forrester report, “The biggest impediment is not pricing or technology, but consumer behavior”.

And it is consumer behavior that will have to change if the cellphone market’s Next Big Thing is to take off. Will users click with the notion of viewing and exchanging TV clips on their mobile telephones? Will consumers on the move pop for an additional $10-$15 a month in order to download (slowly) and watch (on a very small LCD display) news items, sport clips or MTV rock videos? Particularly when they can catch the same fare at home for free — quicker and on a bigger screen?

When the verdict comes through, it will be coming to a very, very small screen near you.

It’s not a bag, it’s art. Fashion and luxury goods purveyor LVMH (Louis Vuitton Moet Hennessy, in full) is marking its 150th birthday with a serious espousal of the fine arts, opening an art gallery in its Paris store on the Champs Elysees. With the Louis Vuitton brand already bringing in over a quarter of the group’s $17 billion annual sales, LVMH can afford it. Already between three and five thousand visitors a day (mostly tourists) are crowding in for a look, putting the gallery-in-a-store ahead of all Paris attractions except the Notre Dame cathedral and the Eiffel tower. More eyes are now scrutinizing featured works by American Vanessa Beecroft at LVMH than those paying homage to the Mona Lisa down the road at the Louvre. (Says artist Ms. Beecroft: “I am not being used to sell bags, but to clean up the conscience [sic] of a sophisticated brand”. How then do we still explain the enigmatic smile on the face of the comparatively neglected Mona Lisa? She evidently has a top-of-the-range Louis Vuitton purse hidden away in her gracefully-folded hands. (Source: The Economist, Pi Market Research).

NOTE: Today is Mother’s Day..buy your mum something Sweet!

Marital Misconceptions

The New York Times recently ran a “Pop Quiz on Marriage”, whose aim was to de-bunk some of the misconceptions we all carry around on the Great Institution of Matrimony. Some of the observations in the piece are so fascinating, Pi wanted to summarize these indicators of changing American mores on the website.

* No, women are NOT more enthusiastic about marriage than men. Since the year 2000, more men than women in America described marriage as their ideal state. Men have become happier with their marriages than women, and in divorces it is predominantly the wives who want out of the marriage.
* No, second and subsequent marriages are NOT significantly less likely than first marriages to end in divorce. Divorce overtakes 43% of first marriages, but 55% of re-marriages. If children from a prior marriage are involved, the failure rate rises to 65%. Some couples are trying to raise the odds of success by taking each other’s teenage kids along on the honeymoon.
* Born-again Christians are NOT less likely than their secular fellow-citizens to divorce. 35% of American born-agains have divorced (vs. 37% of atheists and agnostics), and 23% of the born-agains have divorced twice. America’s highest divorce rate is in the Bible Belt.
* Yes, it IS true that there are more long-term marriages now than in the past. The reason is a demographic quirk. Divorce rates have manifestly climbed in the last half century, though they have fallen again since their early 1980s peak. But the overriding reason for more long-term marriages is longer lifespans. As a result of old age being prolonged, more couples get to celebrate 40 years of marriage than at any time in human history.
* There are many who assert that throughout human history society has always seen strong marital commitment as the foundation-stone of public virtue. They turn out to be WRONG, however. The ancient Greeks held that love in its purest form was between two men. Philosophers in ancient Rome and theologians in the early Christian churches held that loving your wife too much (or “uxoriousness”) was a betrayal of one’s higher obligations to God or country. Many early Christians thought that marriage was inescapably tainted by its inclusion of sex, (a notion which eerily re-surfaced in the diaries of the late Ronald Reagan). And centuries of Chinese culture have puts the relationship between father and Number One Son far higher than that between husband and wife.
* Those who believe that one-man-one-woman has always been the favored form of marriage also turn out to be WRONG. More societies have opted for polygamy than monogamy, by a comfortable margin. Indeed, the first five books of the Bible cite one-man-many-wives as the marital norm. Some societies have gone the other way, with one woman taking multiple husbands simultaneously. As the NYT feature points out, most of human history has put a higher priority on acquiring in-laws and appropriating property than it ever put on sex or love.
* The notion of young Japanese women instinctively longing to be “good little wives” also seems to have been proved WRONG. In surveys conducted four years ago three-quarters of American schoolgirls agreed that “everyone needs to marry”. In Japan, 88% of schoolgirls disagreed.