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:
Interestingly comScore has been releasing more mobile data recently. Today they put out some new US hardware OEM numbers, together with high-level mobile user activity data. Most of the data are flat vs. numbers they put out just a month ago.
Top US handset OEMs (total market, not smartphones):
Activity, comparing April with March release:
Here's a recap of recently released comScore data on mobile app and browser usage by content category:
Finally here's recently released Nielsen data showing the hierarchy of apps utilized on US smartphones and feature phones:
Yelp said that in May it had 32 million unique visitors, making it one of the leading local sites on the Internet. The company also released some data about iPhone usage, which are quite impressive. This is verbatim from the associated Yelp blog post:
Sites like Zillow and Trulia have expressed that about 10% to 15% of traffic comes from their mobile apps. The Yelp number is huge by comparison and shows how significant mobile has become to the company's overall brand and strategy.
Yelp's content and use cases, in most cases, are a direct fit for mobile. Non entertainment related verticals might not see the same levels of traffic and usage. But the data above illustrate that the mobile market and mobile strategies cannot be put off by publishers and advertisers for much longer.
Yelp has also taken another step in the direction of Foursquare et al by adding badges:
Now when a user checks-in to a combination of businesses, they will be able to earn "Yelp Badges." Badges you earn will help show off where you're checking in. For example, if a yelper loves to get their nigiri on at sushi restaurants, they can earn the "Sushi Sensei" badge . . . Once earned, badges can be shared with friends both via the Yelp iPhone app, as well as on Twitter and Facebook.
If users are checking into the same businesses in a given time period and/or neighborhood, they can also earn "Royal" status. Got the most check-ins at a business? You're the Duke, good sir (or Duchess, for the ladies). Most Dukedoms in a 'hood? You're the Baron! Most in the city? You're the King! . . .
The good people at Nielsen have just released some interesting survey based data about mobile applications and their relative popularity. Nielsen surveyed "4,200 people who had downloaded an application in the past 30 days."
Nielsen says that 21% of American mobile phone owners had a smartphone in Q4 2009. The number is now closer to 24% per Nielsen, our data and InsightExpress. The most popular smartphone apps, according to the Nielsen survey, are Facebook, Google Maps and Weather Channel.
The following graphic shows the category breakdown with smartphones in yellow and feature phones in blue. One interesting thing to observe: regardless of handset type the category leaders are essentially the same. Smartphones just seem to make it easier for people to do what they're already doing otherwise.
While weather and maps are both local and two of the top three categories, many more of the categories on the list address offline activity: travel, entertainment/food, movies and some portion of the shopping category.
Below are the top apps by smartphone platform, according to the survey:
Notice that Facebook is the top app on all platforms other than Android. Google search is also not among the top apps except on the Android platform.
Late last week Opera released its lastest State of the Mobile Web report, showing just how much of a boost the browser has received from being on the iPhone:
ABI research released survey data (n=1,000 US consumers) that show growth in daily mobile Internet access and healthy mobile response rates to ads. Here's what the data show at the top level:
This is just one survey in a sea of surveys. These metrics are apparently for all mobile users; smartphone user behavior is different, with more engagement and greater response to ads.
We have data from proprietary Internet2Go surveys and third party sources that show daily mobile Internet access between 30% and up to nearly 60% (for smartphone users) depending on the survey and population. Accordingly the ABI numbers are very low in terms of smartphone users but generally high in terms of the overall market.
In terms of ad response rates, there's AOL-Universal McCann data from mid-2009 that show "38% of smartphone owners have taken acton in response to mobile ads." But generally response rates to mobile advertising are 10x to 20x comparable PC-Internet-based advertising.
Regarding coupons and promotions, there are a lot of data (attitudinal and behavioral) that show greater and more positive consumer response to deals/offers than the reluctant acceptance suggested above. The numbers go up if users own smartphones and use the mobile Internet, but it's also true of SMS users:
Android and the iPhone are the rising stars in Gartner's new handset figures -- especially Android. RIM has also made gains internationally. Once again smartphone sales are driving the market in Q1. Awaiting the launch of Windows (7) Phones later this year Microsoft-powered handsets continue to lose ground.
Smartphones now represent between 22% and 24% of all handsets in the US market. As these figures grow so will mobile Internet usage. In Europe several markets are in a comparable position.
In the US market right now it has become a three-way race between RIM, Apple and Google. Outside the US Nokia remains dominant.
One of Apple's competitive differentiators, the size of its app store, is going away at least vs. Android. Right now Apple has more than 200K iPhone apps to Android's 50K or so. But 50K is probably sufficient for most consumers and the relative size of the app stores will cease to matter. Furthermore most iPhone developers are building Android versions of their apps.
I've noticed that Verizon is also advertising the fact of Android apps to try and close the perception of a competitive gap between the iPhone and Android.
What's also interesting to see develop is advertising around particular Android handsets. In one TV commercial for the Moment or Behold (I can't remember which) Samsung is seeking to differentiate via the handset's screen as well as seeking to create an image of mystery or sophistication around the device. By constrast the Verizon/Motorola Droid remains targeted toward males with a kind of "kick ass" attitude. This kind of image building will be both challenging and critical for the various Android OEMs in an effort to build sub-brands within the Android universe.
Accordingly, how these Android hardware OEMs seek to both emphasize and de-emphasize Android in their marketing and TV campaigns will be fascinating to watch. They need to communicate to interested prospects that these handsets are Android devices but then quickly move on to focus on other features: better cameras, screens, proprietary UIs, etc. as principle points of differentiation from other Android devices.
Putting aside the operating system fragmentation issues, the dozens of Android OEMs and the evolving hardware ecosystem is both a strength and a weakness for the platform.
Amid the multi-billion dollar five-year mobile ad forecasts there is skepticism here and there. One source of some of that skepticism is former DoubleClick CEO Kevin Ryan. According to a piece appearing in the the Wall Street Journal, Ryan said that he didn't think mobile advertising was going to be as big as everyone is predicting:
But Kevin Ryan, the former CEO of online-ad company DoubleClick, said he doesn’t see mobile advertising delivering on those promises soon. Mr. Ryan, who left DoubleClick in 2005 and is the founder and chairman of high-end retailer Gilt Groupe, said that he has long been asked about mobile advertising and that “the real answer” is that he doesn’t think mobile is going to be as big as people think — although he learned very quickly that “the answer that people want to hear is that mobile is going to be huge.”
“Even today … there is almost no mobile advertising,” he said at an Internet, media and telecom conference held by financial-services firm Jefferies. “The screen is just too small,” even on many of today’s smart phones. Mr. Ryan said the iPad is the first mobile device he’s seen that could deliver compelling advertising to consumers.
The business of forecasting ad spending is largely an academic exercise. What really matters is whether there's an audience and whether ads in the channel are effective.
We know from many different sources, including InsightExpress and DynamicLogic, that mobile display advertising outperforms its older online cousin handily.
We also know that there are roughly 70 to 75 million users of the mobile Internet and that people are searching, using LBS and checking product pricing and reviews at or near the point of sale. Accordingly, there's considerable "commercial activity" (though little or no "e-commerce") happening on the mobile Internet.
We know that SMS marketing helps "close the loop" and make traditional media more measurable and interactive. We also know that it's a channel almost unique in its capacity to reach teens and younger audiences.
It's true that ad dollars take longer to show up than consumer audiences; that was equally the case with the Internet, and still is to a large degree today. And it's also true that the most effective uses of mobile advertising and marketing may turn out to be things like couponing, mobile loyalty and CRM functions, rather than pure awareness advertising. However marketers are still testing and trying to determine the most effective uses of mobile and how to best integrate it into overall campaigns.
It would be a mistake to see the mobile channel as ineffective or otherwise ease off the accelerator because of articles like the one above or skepticism about mobile ad revenue potential. That entirely misses the point.
Mobile consumers are already there, mobile commercial activity is there. Marketers that delay or turn away will simply miss the opportunity.
The latest installment of the never-ending coverage of who's winning the smartphone handset war involves the release of NPD data for Q1 2010 (US market). The firm said that RIM was number one but that Android had edged the iPhone for the number two position:
PD’s wireless market research reveals that based on unit sales to consumers last quarter the Android operating system moved into second position at 28 percent behind RIM’s OS (36 percent) and ahead of Apple’s OS (21 percent).
Strong sales of the Droid, Droid Eris, and Blackberry Curve via these promotions helped keep Verizon Wireless’s smartphone sales on par with AT&T in Q1. According to NPD’s Mobile Phone Track, smartphone sales at AT&T comprised nearly a third of the entire smartphone market (32 percent), followed by Verizon Wireless (30 percent), T-Mobile (17 percent) and Sprint (15 percent).
Those Q1 quarterly sales data again:
The data are based on self-reported consumer survey data. Overall marketshare data from IDC and comScore show Apple ahead of the various Android handset makers:
Source: IDC 5/10
Here are the comScore smartphone data (US):
This morning IDC put out its global smartphone market share figures. The company said that the smartphone market grew at more than double the rate in Q1 of the overall mobile handset market:
According to the International Data Corporation . . . vendors shipped a total of 54.7 million units in the first quarter of 2010 (1Q10), up 56.7% from the same quarter a year ago. In contrast, the overall mobile phone market grew 21.7%. Converged mobile devices accounted for 18.8% of all mobile phones shipped in 1Q10, up slightly from 14.4% in 1Q09.
With an improving economy, all endors shipped more units though there were some share shifts according to IDC:
Nokia shipped more units but remained flat in terms of market share. RIM lost share and Apple and Motorola grew, Apple dramatically. The HTC and Motorola numbers are largely (though not 100%) surrogates for Android.
Measurement firm comScore released some new mobile US marketshare data today (Jan - March 2010). It shows 30% of mobile users browsing the Internet on their handsets. If we extrapolate that's at least 75 million people.
ComScore uses a smaller number of mobile subscribers, 234 million, as its base than CTIA's 285 million or the 250 million claimed as subscribers of the four major US mobile carriers. Here is the hierachy of handset OEMs by marketshare according to comScore:
The figures above reflect overall US marketshare not smartphones in particular. The most recent smartphone numbers from comScore for the US market were released in April:
Below are the most recent "content usage" figures and activities:
Update: Apple reportedly has a 5% share of the overall US mobile handset market according to comScore (via AllThingsD):
Research firm InsightExpress has released results of a quarterly consumer survey (n=1,050, Q4 2009) that segments mobile users into three categories:
Intensives constitute 23% of the mobile audience according to InsightExpress. A majority (68%) own smartphones and are mostly 18 to 44 years old (86%). This group as the name suggests are very involved with their devices and utilize them heavily (mobile Internet, texting, videos, applications, etc.).
This group is the most open to ads on mobile handsets:
Over half (53 percent) agree that they “Look at advertisements to see what I should purchase” while 44 percent agree that they “Make a want list” of products advertised.
Casuals make up 24% of the audience and are less involved with their devices. A lower percentage (15%) own smartphones; they're 35 to 54 (59%) and largely female (65%). According to InsightExpress they use their devices for texting and picture taking:
Almost three quarters (73%) text once a week, 43% take pictures once a week, and 21% send pictures once a week.
Almost half pay attention to mobile ads (46%); they “Look at advertisements to see what I should purchase."
The Restrained category constitutes 53% of the mobile audience. They almost all (96%) own non-smartphones. A majority (57%) are older than 45 and they're less affluent than the other groups. They do look at mobile ads though:
47% agree that they “Look at advertisements to see what I should purchase."
All this is largely intuitive: smartphone owners are more engaged and affluent. They also tend to be somewhat younger than others. The percentage of smartphone owners extrapolated from these results is just over 18%. Nielsen by contrast estimates the number at 22%. We just conducted an online survey in which 30% of 1,300 respondents had smartphones.
The female-dominated casuals segment is primed for movement into the intensives category. Verizon marketed "Droid" to males; someone should develop a smartphone that targets females (which the iPhone already attracts) and moms in particular.
As a final note, the survey reveals general openness to mobile advertising. Roughly half of all mobile users are "looking at" mobile ads and open to their influence. These numbers should encourage mobile marketers and are dramatically less negative than earlier research showing outright hostility to mobile advertising.
In the roughly two and a half weeks since the Opera Mini browser was approved for the iPhone it's already had a dramatic impact on Opera usage and metrics. The following statement was part of the morning's PR missive announcing the latest State of the Mobile Web report:
[T]he iPhone is already the third-most popular handset for Opera Mini users worldwide, according to Opera’s State of the Mobile Web Report. The release of the iPhone also portends changes to the top 10 list. According to preliminary numbers, the United States may soon have the fifth-most Opera Mini users, displacing Nigeria, South Africa and Ukraine on its ascent up the list.
Here are screens showing then hierarchy of sites and handsets using Opera Mini in three markets for March, 2010:
If you're having any trouble seeing the lists above, you can get the full report here.