Aptus Consultants

By any measure the growth of the iPhone has been pretty phenomenal. Over 25 million have been sold worldwide, while Orange claim that they sold 30,000 on the first day they made it available on their network. The recent decision by Tesco to sell it will probably maintain this sales growth.

The reasons it has been so successful are quite complex. It is certainly not its standard phone features; indeed compared to other mobiles its functionality is pretty mediocre. What it does benefit from is the association with the ‘i’ branding, a good user interface and sleek design.

However its trump card is probably it huge library of over 90,000 apps which are small programmes that users can purchase or download for free. Just like apps on facebook, they range from the frivolous to the genuinely useful, but are all ultimately designed to increase the user’s benefit from owning the phone. Companies have recently been falling over themselves to get in on the act, and in the last month NatWest, Tesco, FT and Glaxo Smith Kline have all announced the launch of their own iPhone apps.

In to this maelstrom of activity we now have More Th>n’s Car Claim app which allows users to capture key claims information at the time of the accident, while also interfacing with the iPhone’s GPS and camera functions. On the face of it this might seem like an ideal way of helping solve the issue of drivers not collecting the right details, but will it really make a material difference? Let’s do a little maths:

• The iPhone is a 'Smartphone' and according to the latest industry figures it accounts for 17.1% of sales of this type of mobile. However Symbian (Nokia) and RIM (Blackberry) still account for 44.6% and 20.8% respectively, so while iPhone’s share is growing, it by no means dominates the Smartphone sector.
• As the cost of technology and data access has come down there has been a growth in the sale of Smartphones, but even so, they still only account for 28% of the new phone sold in the UK. Apply the 17.1% to this and it suggests iPhones only account for about 4.8% of new phone sales.
• Now lob in to the pot the fact that people typically keep their phones for at least 18 months. iPhones have been around for just over 2 years but they were certainly not enjoying a 4.8% sales share when they launched. So let’s be generous and assume that they have 3% share of the UK phones actually in circulation.
• Last but not least, not everyone who has an iPhone will download the Car Claim app. Let’s again be generous and suggest they get 10% take up, a far higher rate than most apps ever achieve.

So there we have it, the percentage of drivers who might benefit from the iPhone app is about 0.3%, not really enough to make a material impact on the 38% of cases where the correct information is not collected following a claim.

In mitigation of this bleak scenario it could be argued that iPhone sales will continue to grow rapidly and so the penetration of the Claim Call app may grow on the back of this. However, iPhone sales will increasingly come under pressure from the Google Android mobile operating system. This is an open platform which manufacturers such as HTC and Motorola are rushing to exploit, delivering mobiles which have similar quality user interfaces to the iPhone but which are arguably far better devices. We are also now seeing a growth in the volume of apps designed specifically for the Android platform, which now number over 20,000. The upshot is that any increased penetration for Claim Call on the back of the growth in iPhone sales is by no means assured.

Now of course there are other reasons for More Th>n launching the app than just improving claims notification. iPhone apps are a hot media subject, so there is certainly a level of PR exposure to be gained from the launch. There is also the marketing potential that comes from people having a branded app on their phone, although it is not clear whether More Th>n will necessarily have access to their contact details.

If however the objective is to really help drivers after a claim while also cutting claims costs I would suggest a far more pragmatic approach. Nearly everybody texts and it is perfectly possible to build a text based, easy to use, universally available claims notification process to provide help to the driver when they most need it. Enhancements can include ‘click to call’ for claim escalation and a WAP link for data capture for those with mobile internet access.

Now this solution might not seem as sexy as an iPhone app, and it might not grab the headlines, but it will certainly be more useful for a greater number of drivers and will also deliver greater savings to the insurer. For the second blog in two days I find myself using the quote:

 “To select well among old things, is almost equal to inventing new ones”