(Note: This is the second of a two-part series, The Mobile Planet. To start with Part One, Blurring The Lines Between Work And Play, click HERE.)
Thanks to the mobile smartphone, we are living in an increasingly connected world. For the purpose of our discussion, a smartphone is defined as any voice handset with an advanced operating system, features and capabilities that resemble a PC. According to Flurry, “The rate of IOS and Android device adoption has surpassed that of any consumer technology in history.” The following report helps to define the mobile phenomenon and reveal its characteristics. Advertising Age recently released its annual Mobile Fact Pack 2013 which was an important source for this article.
Platforms, Mobile Ad Spending
In May 2013 about 44.3% of the total U.S. population owned smartphones or 141.04 million subscribers. About 67% of those subscribers access the internet on their smartphone daily and rarely leave home without the device. Growth remains robust and is expected to hit 50.1% in 2014; and 55.4% in 2015 or about 177 million U.S. subscribers. By 2017 eMarketer predicts the market will include 79.8% of the U.S. population or around 260 million subscribers, an incredible level of penetration.
Currently there are two main operating systems—Google’s Android which now has 52.4% of all U.S. smartphone subscribers (about 73.85 million; up 1.5% Y/Y) and Apple’s IOS which has 39.2% (about 55.26 million; up 7.3% Y/Y) according to ComScore. Blackberry has seen its market share tumble over the past few years as its hardware and software functionalities increasingly lagged behind its innovative competitors. For example, Blackberry had 11.4% in May 2012, but a year later tumbled to 4.8% (6.77 million subscribers). Microsoft Windows is the fourth largest platform with a 3% share.
Verizon Wireless (31.7%) and AT&T (30.9%) are the two largest ISPs or networks that operate smartphones. Sprint (12.8%) and T-Mobile (9.2%) trail in third and fourth place respectively. Smartphone subscribers have exceeded all growth expectations going from an estimated 110 million subscribers in May 2012 to 141 million a year later.
Apps use differs by platform (Android or IOS) but Facebook, Pandora Radio and YouTube apps show up in both Top 10 lists. App categories common to both lists are weather, maps, email and search.
Consumer Behavior, Socials
For many users their smartphone device is a 24/7 window to the world with direct access to their friends. They carry it with them everywhere and refer to it frequently. Therefore, time spent engaging with the tiny screen has grown.
Mobile usage is now outpacing all other digital behavior according to eMarketer’s July 2013 data. Overall digital time spent daily expanded from 4:33 (four hours, thirty- three minutes) in 2012; to 5:16 in 2013, a 15.8% increase. Mobile now commands 2:21 of that five-plus hours, slightly higher than 2:19 online using laptop and/or desktop computers.
When time spent with digital is compared against other media, we see it is growing while the others are shrinking. TV and Radio time spent daily have both fallen. TV fell 2.5% from 4:38 to 4:31 in 2013. Radio shrunk from 1:32 to 1:26 or 6.5%. Time spent with Print (newspapers and magazines) has suffered the most, losing 15.8% from 38 to 32 minutes.
Facebook is the No. 1 social network when measured by monthly U.S. mobile unique visitors, netting about 109.55 million according to Media Metrix. Twitter is No. 2 with about 35.1 million. Pinterest can claim third with 26.28 million monthly mobile uniques. However, when one looks at “Digital Population” which is unique visitors across both desktop and mobile, LinkedIn moves higher in the ratings. (Unique visitors for digital population: FB-182.534 million; Twitter-62.577 million; LinkedIn-61.174 million; Tumblr-47.794 million; and Pinterest-46.641 million.)
Mobile Ads Are Smaller
Past, present and forecasts show strong smartphone optimism, but nothing spells confidence like ad dollars. Here too, the story is compelling as brands struggle for consumer attention. Total U.S. mobile ad spending increased from $4.3 billion in 2012 to $7.65 billion in 2013. eMarketer forecasts the expenditure will rise 400% to almost $28 billion in 2017, just four years from now!
But making the transition from desktop to mobile ads has not been easy or smooth. In fact, the mobile ad market is facing big challenges. Michael Learmonth writes in the Advertising Age 2013 Mobile Fact Pack, “The challenge is that every user that shifts from a PC to a mobile device represents lost advertising revenue. The problem is part structural: Phones in particular have much less real estate for advertising and traditional banners are less appealing than they are on PCs.”
Social media giant Facebook however seems to have reversed the trend. “Just a year ago, it looked like the shift of users from desktop PCs to mobile spelled big trouble for the social network,” says Cotton Delo, also in the Advertising Age 2013 Mobile Fact Pack. “But Facebook decided early on to integrate the desktop and mobile user experience, so news-feed ads look the same on both screens and advertisers have been largely agnostic about which they appear on.”
As a result of its innovative approach, Facebook saw its mobile ad business surge 41% year over year. “Facebook did it by creating an immersive unit and breaking down the walls between PC-based display and mobile,” says Learmonth. “By the end of the year you can imagine a new divide emerging: the brands that have successfully made the transition to mobile, and those that haven’t.”
So where are we on the curve of smartphone innovation? Certainly we are past the early adopter stage and well into the fat section of the bell curve. This Fall pundits expect Apple to introduce one or two new iPhones and will assess and obsess endlessly about how they match up against other top of the line favorites such as the HTC One, Samsung’s Galaxy S4 and Note II phablet, Nexus 4 and the Moto X. It’s likely we will also see new wireless rate plans move into the mainstream where the consumer spends more up front on a phone, but gets lower monthly rates without a long-term contract. and the battle for new breakthrough features will surely continue.
Personally I’m waiting to get a chip installed behind my ear that lets me activate and experience everything just by thinking about it…