The Five Billion Phone World Analyzed
8/6/2010 by: Tomi Ahonen
Three weeks ago, we heard that the world now has 5 Billion mobile phone subscriptions [for a planet with a total population of 6.86 Billion]. Today I want to stay away from the phone wars, and talk about the mobile consumer. So let's dig into some consumer numbers and facts, to explore the users of mobile.
So let's start with the "5 Billion" figure. It is measured per-capita. As we approach the 6.8 Billion subscription level - the planet is likely to reach 100% mobile phone subscriptions for every person on the planet, by about 2013-2014 - I find an interesting metric to use is the "mobile phone subscription for everybody older than" metric. Lets count down the age, assuming every subscription is divided to every adult starting from the eldest, and going down in age [obviously that is not reality, but it's a cool count-down]. Today the five billion mobile phone subscriptions would cover one active paid mobile phone account, for every adult person and every teenager down to age 15... [by the end of the year 2010, that will be down to age 13... you see what I mean, this will be a funky way to count down to age zero over the next four years].
5 Billion mobile phone subscriptions means the equivalent of a mobile phone for every single person on the planet age 15 or older, across every continent, beyond illiteracy, beyond electricity, beyond poverty etc. Now, obviously that is a totally artificial metric and does not reflect the reality - African mobile phone penetration rate is currently barely over 50%, but it's an interesting way to consider the growing subscription number. But regular readers know TomiAhonen Consulting provides industry stats often that nobody else does, about the industry users, services, revenues, traffic etc. So let's dig into that 5 Billion subscriber number a bit. The real insights.
HOW MANY IS MANY?
Not every one of the 5 Billion mobile phone subscriptions is a 'unique user' because some people have 2 phones, some have 2 accounts or more - and some of those with multiple accounts do not have 2 phones... So how does it break down? I explained the break-down in the TomiAhonen Almanac in 2010 for end-of-year 2009 numbers. Here is the updated breakdown:
But then there is the phenomenon of users with more than one account. So we can't just subtract 3.6 Billion from 5.0 Billion to find how many those customers with two accounts are. I have been tracking those details too and here is the update.
- 5.0 Billion total active mobile phone subscriptions on the planet
- 4.1 Billion actively used mobile phones carried by mobile phone users
- 3.6 Billion unique mobile phone subscribers with at least one active account and phone
Of 3.6 Billion unique mobile phone subscribers, 2.5 Billion have only 1 account. 1.1 Billion Have two or more accounts, and already 300 million people have 3 or more active mobile phone accounts. Of those 1.1 Billion people with more than one account, 500 million have also 2 phones that they carry around regularly. Yes, one in seven of the mobile phone owners on the planet, already walks around with two phones in their pockets. In Western Europe that is well past half of all mobile phone users.
DISCUSSING THE DIGITAL DIVIDE
So while we are on that topic of Europeans, let's go across the Digital Divide, from the 'Industrial World' where 1.2 Billion relatively affluent humans live, to the other side of the Digital Divide, to Africa, Latin America and less wealthy parts of Asia, where 5.6 Billion people live. That is the part we call the 'Emerging World' [previously known as the Developing World and earlier called the 'Third World'] A few words about their lives with mobile.
Concentration of Human Population
The penetration rate of mobile subscriptions in the Emerging World is 59% today. While we in the 'Rich World' see now over half of all phones and subscriptions migrated to 3G, in the Emerging World only 4% have a fast data connection for their mobile phones using a 3G network. That means most of their 'mobile web' surfing is basic WAP style browsing on very modest phones and on quite slow networks with typically GPRS speeds. Here in the 'West' we are just at the point where a third of all phones are smartphones. Across the Digital Divide, smartphones account only for 8% of all phones - and a significant portion of those are second-hand [mostly Nokia GSM based] smartphones... This is no market for the iPhone 4…
Talking about second hand phones - well over 300 million of all mobile phones in use in the Emerging World are second hand phones - accounting for 14% of all mobile phones in use in that part of the world. Yes, they want to have cases for their phones but not to prevent a 'Death Grip', it's to 'preserve' the phone is pristine condition, as the phone will be probably resold later, and it needs to be in good condition to preserve as much of its original purchase price as possible. It's a very different world, the Emerging World, when we consider how many old abandoned smartphones we have in our desk drawers, that were very modern a couple of years ago... Perhaps time to recycle some of your old phones?
LETS GET SOME CONTEXT
At the end of 2009 the world had just under 1 Billion automobiles registered and in use. There were a little over 1.1 Billion fixed landline telephones. There were 1.2 Billion personal computers of any kind in use [including desktops, laptops, netbooks and tablet PCs]. The world had 1.6 Billion television sets and 2.2 Billion banking account holders. But 3.6 billion unique humans on the planet have at least one mobile phone and account. They walk around with 4.1 Billion currently used mobile phone handsets, and they support a total of 5 Billion mobile phone accounts that generate telecoms traffic and revenues. This is a gigantic industry that towers over most others.
And that puts the multiple subscription number into vivid context. 1.1 Billion people are not just in love with mobile, they are so addicted or dependent on it, that they already support two separate active mobile phone accounts for themselves, or more. It's not that there are more mobile phone accounts than fixed landline phones by a ratio of more than 4 to 1, it's that for every still-active fixed landline phone, there is a person on the planet so in love with mobile, that the person has 2 or more mobile phone accounts. No wonder the fixed landline business is in terminal decline...
SNAP SNAP SNAP
Early cameraphones were pretty puny and most 'serious' camera freaks considered them jokes. Now we are getting ever better cameraphones, even the iPhone is up to 5 megapixels [and LED flash, finally] and Nokia's new N8 features 12 megapixels, on real, serious, Carl Zeiss optics, and a 'real' Xenon flash. Cameraphones are growing up. And we consumers love them. Not every phone is a cameraphone yet, and not every cameraphone has its camera used - but worldwide the active users' base of the camera feature has now passed 3 Billion consumers. Wow. The stand-alone camera business is stagnant, selling about 100 million digital cameras per year. The cumulative shipments of all digital cameras ever made, is about 700 million to now, the active installed base is perhaps half that number. And some of the active digital cameras are with the serious professionals and semi-pro's who easily have several digital cameras [and perhaps even a classic film-based camera too].
So we are now at the point, where when counting active users on the planet, the number people using the camera on a cameraphone, outnumbers the users of any other type of camera, digital cameras and film-based cameras - by 10 to 1. Wow. By far, for most people on the planet, the only camera they have ever used is one on a phone. And those pictures are not printed, by the way. And most are not sent via email or saved on a PC [remember, the world has only 1.2 Billion personal computers, not all of those are connected to the internet, and many are PCs with people who use more than one, so the actual user base of PCs is far smaller still]. Most of those pictures are not sent by MMS either. The most of the pictures snapped on cameraphones, are never removed from the cameraphone, they are only consumed by the person who took the photo, and perhaps shared by showing the phone itself to another person. The second most common way to share pictures is 'side-loading' i.e. via Bluetooth or via microSD memory cards, shared with friends. 4 out of 10 mobile phones in use today have a memory card slot, and 6 out of 10 have Bluetooth. That is how pictures move, if they are moved. Most are never moved from the cameraphone which took the snaps...
The world's biggest camera brand is Nokia, which has now over a Billion users. Wow. Canon, Nikon, Minolta, Konica, etc had never even 100 million active users of their camera brands. And Nokia's first cameraphone came 8 years ago. Double-wow. And all stand-alone digital cameras, and all film-based cameras ever made over more than 150 years - has not reached a billion cumulative shipments. Yet Nokia has that in active users. No wonder Nokia obsesses about Carl Zeiss optics and megapixels and real Xenon zooms and even offers cameraphone tripod mounts...
And do remember, even for very modest 'Africa' models of very cheap cameraphones with modest VGA or 1 megapixel basic cameras - a cameraphone will have a color screen. So we have an active user's base of 3 Billion people who use a mobile phone for non-voice, non-messaging - but picture/screen related uses. Yes, almost twice the number of people looks at the color screen in their pocket, as the total number of television sets on the planet. That was our 3 Billion number.
LET'S GO MAD
So I have told you what are the numbers 5 Billion, 4 Billion, 3 Billion and 1 Billion. It leaves us with the 2 Billion number. What might that be?
The world has now passed the point, where two Billion of us have received an advertisement on our mobile phone. [So 'mAd' is mobile advertising obviously]. Yes, out of all mobile phone subscribers its 'only' 40% but the gigantic numbers in mobile hide enormous scale. Remember those television sets? 1.6 Billion. And not all TV channels worldwide broadcast advertisements. Yes, 1.2 Billion PCs exist but less than that are connected to the internet, so less than 1.2 Billion personal computers will be able to receive ads via the internet. But 2 Billion of us have received ads on our phones, essentially twice as many as have seen an ad on a PC.
How's that with newspapers? The worldwide circulation of newspapers, free and paid, was under 480 million last year [and newspapers are dropping dead left and right, in the tough economic conditions worldwide]. So 4 times more people receive ads delivered into their pockets, than onto their daily newspapers. Wow. Are you impressed with the hot new Apple iPad? It sold 3 million units in its first quarter. Let's assume Apple does that rate for a year, and the world would have about 12 million iPads in use next year at this time. How much bigger is 'real' mobile advertising, delivered to 'real' mobile phones? Try 167 times bigger - this a year from now, if we assume awesome iPad growth rates [mobile advertising reach is 650 times bigger than total installed base of iPads today.]
Two Billion people on the planet receive ads onto their phones. That's 40% of all mobile phone subscribers. Its 3 out of every 10 people alive on the planet! So if you thought it was impressive that mobile advertising was the only form of advertising to actually grow revenues in the economic crash when all other advertising forms declined; and last year that mobile advertising grew by 70% in revenues - you aren't seen nothing yet. The world's most personal gadget, the world's most pervasive technology and the world's most beloved device - our mobile phone - is now also a powerful advertising and marketing platform, reaching further than the PC based internet, or television or newspapers. Like I say, the mobile is the last thing we see before we fall asleep, and the first thing we see when we wake up. Just this past week we learned that in the UK, the youth who sleep with their Blackberries under their pillows, have started to call the BB, the Blackberry, as their 'Baby'. Sleeping with the Baby. Yes. BB. Baby. Blackberry. Pretty cool.
For anyone wanting to reference the numbers - all numbers, facts and stats mentioned in this analysis, that was not separately credited, is based on the TomiAhonen Almanac 2010, where obviously some statistics have been now updated for August 2010 levels. So please feel free to reference any of the numbers mentioned here and provide a link to this analysis if you want. You do not need to ask permission to republish any of the stats or facts.
A COUPLE OF PLUGS
First, I want to mention the podcast we do monthly with Peggy Ann Salz at the M-Search Groove. My monthly podcast is about the latest stories related to the statistics of the mobile industry. It's a short nice peppy chat with Peggy about what's hot in mobile, so if you want more on the numbers of the industry [and its free] this is a good place to visit monthly.
Then we have our 7th Mass Media course at Oxford University again coming up in mid October, in Oxford, England. The course is only 2 days in length, an 'executive' course with the media and mobile focus, looking a lot at the consumers, the media, the advertising etc plus obviously 7th Mass Media special issues, like the myths in mobile, and the unique benefits we have in mobile to deliver services that even other digital platforms like the PC based internet, digital TV, DVDs etc cannot deliver. The course lecturers are David Cushman, Alan Moore and me, and the course runs Oct 12-13. If you wanted to 'really' know this industry, this is the ultimate course with us, the three authors who have together published probably more on these topics than anyone else. Please see the Oxford University website for course outline and more info including booking info.
For those who want a two-page handy guide on the main numbers for the mobile industry, please remember my free 'Cheat Sheet' is always available. To get the PDF file emailed to you, just send me an email to tomi [at] tomiahonen [dot] com.
And for those who want a more thorough set of stats and numbers and charts and facts on the mobile industry, the TomiAhonen Almanac 2010 is the best value at only 9.99 Euros, giving you 184 pages with 84 charts and tables, with all the facts you ever wanted to know about mobile today, from handsets to networks to consumers to services to apps to revenues to profits to the digital divide. Best of all, the PDF format eBook/mBook is formatted for the small screen, so you can carry all the industry numbers in your pocket anywhere, right on your smartphone [or laptop, Kindle, iPad etc]. To see sample pages including several of the actual tables and charts, see the ordering pages for the TomiAhonen Almanac 2010 [this Almanac is not sold anywhere else, not on Amazon or any other bookseller].
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