Here are the "big four" in the US:
Total: 264 million (not counting smaller carriers). CTIA says there are 285.6 million total US mobile subsribers.
The gap between the two leaders and the smaller carriers certainly argues in favor of some sort of combination, which has previously been rumored and even supported in principle by Sprint CEO Dan Hesse.
The current state of mobile commerce -- purchases made on mobile devices -- is not dire but most users aren't buying things over their handsets. There are a number of semi-contradictory surveys and studies in the market about the health of m-commerce:
In contrast to buying there is a great deal of "shopping" and price comparison lookups going on in stores on mobile devices. However there are two companies in particular that already have very healthy m-commerce businesses. The first, eBay, said that it was on track for $1.5 billion in sales from mobile devices in 2010. Amazon is the other.
Yesterday Amazon reported second-quarter earnings that included more than $1 billion in global sales from mobile devices:
In the last twelve months, customers around the world have ordered more than $1 billion of products from Amazon using a mobile device," said Jeff Bezos, founder and CEO of Amazon.com.
Are these two companies simply leading indicators of where the market is going or are they exceptions, suggesting that it may be a long time before others achieve comparable mobile success. My view is somewhere in-between.
These are two strong and, in Amazon's case in particular, trusted brands. In addition Amazon (like iTunes) has stored credit card information, removing fricition from the m-commerce process. The credit card and the challenge of entering 16 digits on the small screen is by itself enough to kill 99% of mobile transactions.
Over time consumers will feel more comfortable buying a wide range of things on their handsets, but it will take time for retailers, etailers and others to assimilate best practices and properly address the needs and use case of consumers on the go.
The following are some "takeaways" by Citi analyst Mark Mahaney from the recent IAB Mobile Marketing Conference in New York (we didn't attend):
These data reflect a nice snapshot of the market today. There's higher engagement with mobile ads but the medium is more complex and challenging in some respects, as the search data suggest. Android is an increasingly viable #2 platform to the currently dominant iPhone.
Feature phones (and SMS) should also not be neglected. While smartphones in the US constitute about 23% of the market, that means non-smartphones are 77%. While the numbers will become more balanced over time there are still lots of people on feature phones in the US and around the globe.
Apple posted impressive quarterly results and "record revenue" for its third fiscal quarter. The company announced revenue of $15.7 billion and net profit of $3.25 billion. This compares to revenue of $9.73 billion a year ago.
Hardware sales were as follows:
Apple slightly beats consensus estimates on unit sales it appears and, revenue-wise, strongly exceeded expectations.
Read more on Techmeme.
Research firm Forrester conducted a survey of European mobile users and found -- few surprises here -- that most respondents are not transacting on mobile devices. Here are the high-level datapoints:
The firm says, however, its earlier survey data show more engagment with these activities among smartphone users:
28% of European iPhone owners research products for purchase, while 13% of them report purchasing products via mobile at least monthly
Compare this to earlier Insight Express (US) data, which show much higher levels of smartphone activity in stores:
Source: Insight Express, June 2010 (n=1300 US mobile phone users)
In addition, recent Compete data show heavy smartphone usage to find local stores/businesses:
We discussed in the past that a major obstacle to so-called "mCommerce" is the need to enter 16 digit credit card numbers on a tiny screen. Even a smartphone screen is very awkward. Stored credit card numbers with trusted online etailers (e.g., Amazon) or payment platforms will fuel mobile-online purchases by removing the credit-card-entry fricition.
Mobile "commerce" should not be confused with mobile "shopping" or use of phone for shopping purposes. Smartphone owners, as the IE data above suggest, are using their handsets extensively in stores and in the shopping process on the go.
Two earlier US-based surveys show more interest in mCommerce among mobile users than the Forrester survey data:
ChangeWave released a new survey of 4,028 US smartphone owners that looked at future intent to purchase and customer satisfaction. The survey included polling about iPhone 4 and Droid Incredible. It showed Apple and HTC to be among the winners and RIM, Palm and others to be among those suffering by comparison in the survey.
The firm noted that overall smartphone demand is growing:
[C]onsumer interest in smart phones [is now at] unprecedented levels – with consumer planned buying now at an all-time high for a ChangeWave survey.
As mentioned, Apple and HTC gained in the survey while demand for RIM and Motorola waned. (That may change with today's release of the Motorola Droid X.) RIM also suffered Customer Satisfaction. According to the survey findings:
RIM . . . has fallen to sixth place in terms of customer satisfaction (30%) – their seventh consecutive quarterly decline."
Notwithstanding the snafu over iPhone 4 antenna problems ("death grip") -- this survey was conducted before the controversy erupted -- satsifaction levels are much higher for Apple than its smartphone rivals.
Here's a final and interesting observation about BlackBerry devices from ChangeWave:
In recent quarters RIM models appear to have lost their 'cool factor,' and the onus is now squarely on RIM to regain consumers' confidence in their products.
We haven't done any polling but if in fact that interpretation is accurate and RIM has "lost its cool" that could be quite damaging for future sales. Younger users were buying RIM devices in surprising numbers, partly because they've been aggressively discounted but also for their texting capabilities.
Fashion and image have been among the strongest selling features of the iPhone and certainly the Droid devices at Verizon in the US.
In addition, as demand for apps and the Internet on mobile devices grows, RIM is in a weaker position with its current smaller selection of apps and generally weak mobile Internet experience. However the company has vowed to change that with a better browser and renewed emphasis on its app store.
In Millennial Media's latest "mobile mix" report, the company put out data showing the "mix" (hence the name) of devices on its network. Most of the numbers were flat compared to last month. However despite the continued growth of Android devices, the iPhone actually grew vs. May's data.
Here are a few of the findings:
Compare data from May's report:
What we've got is a very clear three way hardware race: iPhone, Android and RIM. But in terms of developers it's only about iPhone and Android.
Citi financial analyst Mark Mahaney put out a research note this morning that discussed the new comScore search market share data. Here's an interesting bit about mobile from the note:
comScore doesn’t include Mobile Search results, which are likely growing very rapidly for GOOG — perhaps triple-digit Y/Y growth % and now accounting for almost 10% of total GOOG queries.
Let's assume that figure is accurate -- comScore and Nielsen don't have good figures about mobile queries -- what would that 10% mean in concrete terms? Ten percent of 10,292,000,000 monthly queries is 1,292,000,000 or more than 1 billion monthly search queries coming from mobile devices in the US alone.
In Q1 Google made just over $2 billion from search in the US on Google.com, out of $6.7 in total revenues. Taking the simplest approach and assuming that Google makes the same amount on every query (which it doesn't), 10% of that Q1 US search revenue would be just over $200 million.
In mobile there are fewer ads but higher response rates. The actual revenue is probably less than $200 million.
If these figures are anywhere in the ballpark, however, it's not crazy to suggest that mobile could be a billion-dollar revenue stream for Google within five years.
Comscore today released an update of mobile marketshare figures for the US smartphone market, as well as general mobile user behavior data. What they show at the top level is that Android has grown whereas the other smartphone platforms are flat to declining. These data run through May and don't yet reflect the launch of the iPhone 4.
Below is the market-share chart. Android has made a meaningful gain again:
In addition comScore captures mobile user behavior across a range of activities:
What's interesting here is that some of the other survey based data out in the past few days show higher levels of activity in a number of these categories: SMS, mobile Internet access and social network access on mobile devices.
In particular, Pew's data show that roughly 40% of mobile users accessed the Internet on their handsets. Now, that may be all inclusive and not simply "browser-based," as in the comScore numbers. But there's a meaningful discrepancy between the Pew number (extrapolated from a survey) and comScore's number.
Also out today is Pew's data on mobile Internet usage. The recent telephone survey of more than 2,000 US adults sought to explore how many went online via mobile devices (including laptops) and what users were doing on those devices. The big -- and not-unexpected finding -- is that people are becoming progressively more engaged with the Internet on mobile devices, with daily usage frequency increasing.
Here are some selected data points from the new report. In terms of the overall sample:
All these numbers are larger if younger users (18-29) are segmented out of the general sample population. For younger people:
The report also found that African Americans and Hispanics are more engaged with mobile devices than Whites generally:
[M]inority Americans lead the way when it comes to mobile access—especially mobile access using handheld devices. Nearly two-thirds of African-Americans (64%) and Latinos (63%) are wireless internet users, and minority Americans are significantly more likely to own a cell phone than their white counterparts (87% of blacks and Hispanics own a cell phone, compared with 80% of whites). Additionally, black and Latino cell phone owners take advantage of a much wider array of their phones’ data functions compared to white cell phone owners.
Another "headlline" from the report is that 55% of mobile Internet users are online via their mobile phones at least once a day and 43% are access the mobile Internet "several times a day." According to Pew's numbers that would mean a daily US mobile Internet audience of just over 41 million people. This doesn't consider mobile Internet use by peope under 18.
Insight Express (IE) has put out some very interesting data this morning (coming to me via IE's Joy Luizzo) that confirms our own research and what we've been writing about for quite some time: consumers are increasingly using their handsets in stores, while shopping. In addition, they're very interested in and open to deals in context.
Some people want to look for deals themselves and a large number of people want deals pushed to them.
The data in IE's new mobile shopping report are based on a June consumer survey of 1,300 US adult mobile users. A whopping 82% said they used their mobile devices in the store, while shopping.
Source: Insight Express, June 2010 (n=1300 US mobile phone users)
Separately 72% of those open to deals expressed interest in having coupons and offers pushed to them, with almost 30% wanting to receive them in a store:
Source: Insight Express, June 2010 (n=1700 US mobile phone users)
The report also shows that smartphone owners are more engaged than non-smartphone owners, as one might expect.
People (males 25-34 with smartphone in particular) are using phones in the store, in front of products to make buying decisions. They're checking reviews and prices, as well as looking for deals and discounts. IE says that 53% of male mobile shoppers have smartphones.
Historically males have been adverse to using coupons, but in mobile (and even online) the "stigma" associated with coupon use is largely eliminated. Accordingly, IE reports that in its survey male smartphone users "over-index" (vs. the general population) for coupons in specific categories:
Finally, 51% of mobile male shoppers want to look for deals themselves vs. 39% who wanted offers pushed to them via SMS. Last week Placecast published similar findings: mobile phone owners want offers and are very receptive to those coming to them via SMS.
Related: Knowledge Networks found:
Among those who use a smartphone with applications ("apps"), 40% refer to apps at least "sometimes" when making decisions while shopping . . .32% already say they are more inclined to buy from companies that advertise in apps – a much higher proportion than for other emerging platforms.
Metrics firm Compete has just released some top-level data from its Q1 2010 Smartphone Intelligence survey. Some of the findings are very compelling. In particular, smartphones are driving users "from search to store." According to Compete's data (n=705):
Nearly one in three smartphone owners has called or stopped into a local business after finding it using a local search application.
The following are largely verbatim findings from the release:
Regardless of the specific figures here what we're seeing is many people adopting smartphones as their primary Internet access device. The social networking data most directly reflect that. That's one of the very big takeaways.
In addition, in the local search data above we can see how immediate consumer needs, manifested in local lookups (in apps or via search), can translate directly into store visits and purchases.
One of the opening slides at any and every mobile conference used to be one showing how many PCs there were compared with the number of mobile devices in the world. I grew very tired of that slide because the yawning gap between hardware categories seemed increasingly obvious: there are a lot of mobile handsets in the world. Enough already!
However, a newish estimate from ABI Research says that there will be five (5) billion mobile subscriptions across the globe by the end of the year. This isn't devices per se, it's accounts presumably. But the figure would generally correspond with devices. By contrast, depending on which firm you consult, there are roughly 1.2 to 1.4 billion PCs in use around the world. That means there are or will be almost 5X the number of mobile devices/handsets as PCs by the end of the year.
I was struck by the five billion number so I'm reproducing the slide, despite railing against it in the past:
Sources: ABI Research, Gartner, IDC, Forrester (2009 - 2010)
Morgan Stanley has forecast that Internet access on mobile devices, on a global basis, will exceed PC access by 2014. That's already true in some developing countries, but it's aggressive for the West and developed world. Nonetheless the day will come in the next several years.
According to a Piper Jaffray survey (reported in Fortune), three-fourths of iPhone 4 first day buyers were existing iPhone owners who were upgrading:
Various estimates have put first day sales at between 1 million and 1.5 million iPhone 4 units. This is good news (of a sort) for Apple but not as good for carrier AT&T, which is subsiding all the phones.
Obviously the phone is hugely popular but it isn't winning as many coverts as past iPhones. Most of the would-be switchers have already moved over. And increasingly competitive Android devices make people less likely to switch.
Yet there's still demand among non-AT&T customers for the iPhone that Apple is failing to capture. Previous surveys have indicated substantial demand for the iPhone, for example, among Verizon customers:
If the data in these charts is representative of the broader US market, they represent millions of iPhone units that Apple is not selling -- and that are going to Android or other handsets -- because of AT&T exclusivity.
Unprofessional headline? Perhaps. However, as we all know, it's only a matter of time before mobile access to the Internet on a global basis exceeds fixed-line access. Morgan Stanley, for example, has projected that this will happen by 2014. It won't happen as quickly in the West; however in developing countries it may happen sooner.
Now, a new report from Interpublic subsidiary agency Initiaitve shows some interesting and surprising things about mobile Internet usage and behavior. The company conducted a survey of 8,000 consumers in several countries: the UK, Italy, US, Sweden, China, India and South Korea.
The agency counseled that mobile advertising be used to "amplify" messages from other media. It also says that smartphones be partly thought of as devices that can respond to ads from other media. Ironically, mobile gives some "new life" to traditional media.
There are many other findings in the report about mobile Internet activities, apps and mobile payments.
The larger point that these data illustrate is that smartphone owners in the West and all mobile users otherwise are making this most personal of computers their primary Internet access device.
Marketers and publishers will need to contend with that reality sooner rather than later.
According to a survey released last week, conducted by BIGresearch for the National Retail Federation (n=9,578 US adults), a majority of those 18-34 years old (51.4%) now want Internet access on their mobile phones. And 18.5% of that group is planning to buy a mobile phone in the next 90 days.
Overall "41.5% of adults want a cell phone with internet access, compared to just under one-third (32.6%) who said so in July 2008."
In tandem with Internet access, people want email access on their phones. An equivalent number (51.1%) of 18-34 year-olds said they wanted email access on their handsets compared with "28.1% in January 2006." The average who wanted email, across all age groups, was 42.6%.
Roughly 42% of US adults 18-55 said they were intending to buy a new mobile phone in the next 90 days.
If that number can be extrapolated to the larger population it would represent almost 100 million new mobile phone buyers, a near majority of whom would probably be buying smartphones for their mobile Internet capabilities.
The penetration of smartphones in the US today is about 22-23%. Nielsen has predicted that by Q3 of 2011 smartphones will exceed feature phones in the US. The data above would support the idea of an acceleration of smartphone adoption.
Mobile ad network Millennial Media is now putting out two reports on a regular basis: one about mobile advertising (SMART) on its network and the other about devices (Mobile Mix) on its network. Consistent with other networks and data vendors in the market, Millennial has seen considerable Android growth. But the iPad is also growing dramatically.
According to Millennial:
Below are some of the report's charts, showing the hierarchy of devices and operating systems on Millennial's network. In addition, the company shows the percentage breakdown of developers working on the various smartphone operating systems.
Compare AdMob's most recent mobile metrics report (April, 2010) in terms of devices and operating systems on its network:
Other than the iPhone and the top three Android phones, there's a different array of devices on both lists. The top Android device on Millennial's list, the Nexus One, doesn't event show up on the AdMob list. The AdMob list shows no RIM devices among the top group, whereas the BlackBerry Curve is the number two phone over at Millennial.
Comparing operating system share on the network also reflects the differences between Millennial and AdMob. Below is AdMob's US operating system share graph for April:
Millennial (top four):
AdMob (top four):
Each of these company specific reports needs to be taken with some caveats and caution. The discrepancies and differences between the networks illustrate this. However, both companies show similar trends: the growth of Android handsets, which makes sense give how many there now are, and the rise of the iPad (AdMob discussed that last month).
Yesterday at the SMX Advanced event in Seattle I moderated two mobile panels: one on location-based services and one on mobile advertising, and specifically paid search on mobile devices. Earlier in the morning Microsoft's Yusuf Mehdi in a keynote conversation mentioned some statistics that were quite impressive regarding the differences between mobile and PC search user behavior.
He was describing the pattern of research that PC search users engage in -- typically multiple sessions that span a week or multiple weeks in some cases. According to Microsoft's data that time frame is radically compressed for mobile searchers.
Below is some data from a slide presented by Microsoft during the paid search session that expands upon Mehdi's remarks:
Source: Microsoft analysis
What Microsoft is capturing here is the time it takes consumers to begin and complete a search for specific information on the PC and on mobile devices. In the first cell above on the left, the dramatic finding is that 70% of mobile searchers conclude or complete their search process in about an hour.
What this presumably reflects and supports is the notion that mobile searchers are looking for information to make a decision quickly. This could be about a product in a store or a place to eat or a movie and so on. Regardless, most of these mobile search queries are commercial (directly or indirectly) and they're going to be fulfilled or completed, in the majority of cases, in the real world -- offline.
New mobile metrics firm Ground Truth released data showing that US mobile data/Internet usage builds throughout the day, peaking in the evening at roughly 9pm:
Ground Truth found that in the month of April, 32 percent of daily page views occurred between 7:00 p.m. and midnight, with the highest volume occurring at 9:00 p.m., local time . . .
The figures from Ground Truth's April census of 4.24 million Americans show that from 4 a.m. onwards, Mobile Internet usage (as measured in page view consumption) climbs steadily throughout the day, with usage intensifying after 6:00 p.m. and peaking at 9:00 p.m., when 7.2 percent of all page views occurred. Throughout the workday (9:00 a.m. until 5:00 p.m.), an average of 54 percent of Mobile Internet users browse content, with workday usage heaviest around 4:00 p.m.
Assuming these data accurately reflect the broader usage patterns of US mobile subscribers (which is a reasonable assumption given the sample size) there are obvious advertising implications, around "day parting." It would be interesting to discover whether smartphone and feature phone users' habits parallel one another or whether they're distinct.
My guess would be that it's the latter, because smartphones enjoy higher levels of engagement and they are broader information and entertainment devices.
Nielsen yesterday released more mobile data that offer a range of interesting insights into the US smartphone world. Nielsen now asserts that smartphones comprise 23% of US handsets. If we assume a base of 250 million mobile subscribers (CTIA says it's more, comScore uses 234 million), the 23% translates into 57.5 million US smartphone users.
According to Nielsen's data almost 90% of iPhone and Android users have accessed the mobile Internet within the past 30 days. Various surveys we've done have indicated ranges from 37% to more than 50% of smartphone users tapping the mobile Internet on a daily basis. In the Nielsen data application use is almost as high as mobile Internet access. In addition, location-based services/GPS (probably maps and directions rather than Foursquare) come in as one of the top mobile usage categories.
According to Nielsen, RIM and WinMo have lost share, while iPhone and Android have directly gained at their expense.
Compare comScore's most recent US smartphone data (Feb 2010):
There's also some interesting data about loyalty, showing iPhone and Android loyalty -- with Android owners being somewhat more open to buying an iPhone next vs the other way around. I've argued that Android sales would probably be directly impacted if the iPhone were more broadly available from carriers other than AT&T: