There's a comment piece in today's IT Week that I read with interest, despite finding it a little puzzling. It's by Daniel Robinson, who explains "Why high Arpu is bad news for you".
Arpu is, as business-headed types will probably be aware, short for "average revenue per user". So, if something has high Arpu, it makes more money per customer than something with low Arpu. Fair enough, and a basic business technique - getting existing customers to generate more revenue. Let's hand over to Robinson:
Over the last year or so, I've lost count of the number of press releases from handset and wireless device makers that breathlessly promised that new products will deliver "fantastic growth in Arpu!" or other similar phrases.
On the face of it, this seems a puzzling way of selling handsets. When a manufacturer claims that its device delivers higher Arpu than rival products, it is basically boasting that its new phone costs you more to run than rival models. This is like a car manufacturer advertising its latest model with the slogan "burns more petrol per mile than any other car on the road!".
It's certainly a question that we should look at: ("are handset manufacturers on the side of the consumer") but one that's pretty easy to answer. Not really, no. They are businesses, and their clients are actually the phone networks rather than the phone users.
Just last week, Jack blogged about Motorola's decision to pull the plug on an iTunes phone... because not enough networks were interested. I'm not sure customers would have had the same opinion.
In fact, I'm not even sure consumers are particularly interested in what handset they have, as long as it does its job and looks OK. The rise of South Korean handset makers like Samsung and LG stand as testament to this: apart from a handful of early adopter, phone obsessed gadget twitchers, function and price is much more important.
And ultimately it is the networks that distribute and promote most phones, so a Motorola, Nokia or Samsung claiming they can drive up Arpu should hardly shock. Consumers just aren't their target market.
