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It's technology, stupid
Comment by Jane Simms

I wrote two articles recently which, technophobe that I am, fell well outside my comfort zone. One was on Carphone Warehouse's planned acquisition of AOL's UK internet access business. The other was on the video, computer and internet games industry. I spoke to lots of technology analysts and players in the market and I learnt a lot of really interesting things.

I now know my DSs from my PSPs, my Wiis from my Gizmondos, I share observers' concern that Sony might have gambled its future on Blu-ray and I am intimate with the triple- and quadruple-play offerings being planned by the big telecoms and technology companies.

But there were two particularly interesting things that I learnt. One was that video, computer and internet games are very good for us, and that the industry needs to find a way to extend the market from the hardcore gamers into the mainstream so that society as a whole can benefit. Another thing I learnt was that the reason so many people have such problems trying to install broadband is nothing to do with the technology or the companies that supply it; it is customers' ineptitude.

These nuggets were imparted to me not by biased vendors, but by supposedly impartial analysts from highly reputable research houses.
UK consumers spend more on video and computer games than they do on health clubs, the cinema or nightclubs-an alarming statistic for anyone concerned about the health of the nation and the growing problem of obesity in children.

But it was a straight-faced analyst who told me that one of the big merits of interactive internet games is that they encourage a switch from a "lean-back" culture-that is, watching TV or a film-to a "sit-forward" culture, in which children are exposed to a virtual world. They also help children develop complex social relationships and learn the value of working to earn the money they need to accomplish a specific goal.

I suggested joining a junior football club and getting a paper round might achieve the same objectives-with a bit of fresh air and exercise thrown in. Ah, yes, but they don't build the hand-eye co-ordination that video games do, he replied. OK, tennis then? He came back with a line about the cognitive and intellectual benefits video games confer. I started to talk about the merits of a good book, but he didn't really seem to get it.

Why is the idea of technology for its own sake so seductive? I like the comment of Thornton A May, chief psychographer at US executive advisory firm Toffler Associates, that: "Technology doesn't make you less stupid; it just makes you stupid faster."

Carphone Warehouse is not stupid at all. Its positioning as the consumer's friend and guide through the labyrinth of handset, tariff and network options has served it well in the mobile phone market. It ought to be able to deploy its trusted brand status to even more lucrative effect in the rapidly developing and increasingly complex world of converged mobile and fixed telephony, broadband and online content. Goodness knows, we're going to need some help.

But instead of doing that, it has become a broadband supplier itself, through its Talk Talk sub-brand, investing heavily to buy the scale that will allow it to compete with the likes of BT and NTL/Telewest. In the process, Carphone Warehouse has lost some of its trusted brand status by delivering appalling service to customers who signed up for the "free" broadband offer it launched back in April. It had completely underestimated demand for the service.

It also underestimated the strategic implications of going head-to-head with its suppliers. Chief executive Charles Dunstone was "surprised and disappointed" that Vodafone, which is planning its own broadband offering, switched its monthly contracts business to Dunstone's high-street rival Phones4U, undermining in a stroke the impartiality his business was built on.

From kids' video games to big kids' boardroom games, it seems that whenever technology is involved, everyone puts their brains into neutral, forgets about their customers and joins the stampede.

Jane Simms is the former editor of Financial Director and Marketing Business.

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