Mobile Carriers Show Lack of IQ

Apple iPhone 3GS, Motorola Milestone and LG GW60Mobile Carriers recently found themselves in hot water with a report that Carrier IQ violates user privacy. In case you haven’t heard Carrier IQ is a hidden diagnostic program embedded in 40M+ mobile devices. It monitors usage, location, signal strength, etc. and regularly sends data it to the Carrier. Mobile Carriers claim it is used to improve their network but critics argue it’s yet another privacy gaff. The major Carriers have given a perspective on how innocuous it is and in a rare response, Apple said it was deactivated in current devices and will soon be removed from IOS 5. Apple’s rapid apologetics is a testament that this is a controversial topic. Privacy concerns have escalated this issue to an FTC and Congressional inquiry.

Is it appropriate for Carriers to collect this data at the expense of user privacy? Are Carriers being responsible in managing it? The answer depends on your outlook and is quite subjective, but a more interesting question is: WHAT THE HECK WERE THE MOBILE CARRIERS THINKING! Didn’t they expect this would be discovered at some point and the privacy advocates would come after them? The Carriers (and not Apple) seemed to be blindsided!

My view is that this proves that Carriers are out of touch with their evolving user community. Several years ago, when feature phones dominated the market, nobody would have flinched at this. Carriers would get usage and location data to improving the network because the handset was completely within their domain. However with the advent of the smart phone platform things have changed change. The phone is no longer an extension of the network; it’s an extension of the user!

Some of the most powerful brands (Apple, Google, Blackberry) are built around smartphones. Many studies reveal the power of a brand and the importance of a smartphone. A recent study showed that people actually felt biochemically threatened when their brand was threatened. This can actually be observed using an MRI to show smartphone brand associations triggers the same biochemical response as religious fanaticism . A study in the UK suggests that a third of adults and over half of teenagers are addicted to their smartphone. Carriers – listen up – a smartphone is no longer a “network node.” Trying to control / conceal / inhibit mobile devices will lead to customer dissidence.

I suggest carriers adopt a very simple principal to address this: User Choice and Transparency.

Let users opt-in to data collection and show them exactly what is being collected and why it is important to collect. This transparency is becoming the norm on the social networks which have similar privacy concerns. Google and Facebook show a lot of captured data, and let users manage it. Most users won’t care, but obscurity and lock-in creates fear and uncertainty which inevitably lead to unhappy customers.

A smartphone should be treated more like a computer and less like a traditional phone -and branding around this principal could provide Mobile Carriers with an excellent opportunity differentiate.