Hard Estimates: Amazing Mobile World Milestones for 2011
4/22/2011 by: Tomi Ahonen
Witnessing the results for the first quarter of 2011 only makes us casting an eye into the next months and foresee what kind of milestones we will hit during this calendar year.
SEVEN BILLION PEOPLE
And while I love my stats in the mobile industry, this year planet earth will take the limelight, as we will hear the planet's population passes 7 Billion people alive. It was 6.9 Billion last year. So the really big number we need to prepare for this year is 7B.
5.8B MOBILE SUBS
Let's move to the big mobile and tech numbers. If you think 5.2 Billion active mobile phone accounts was an impressive number at the end of last year, think again. We are already past 5.3 Billion and we are fast headed to the number of 5.8 Billion at the end of this year. That means a (nominal) mobile phone subscription penetration rate of 82.9% per capita for Planet Earth. What can I say about that number? Mobile dwarfs any other media or technology; even radio was passed several years ago. We are past most comparisons, like only 4.2 Billion people use a toothbrush etc. So let's use comparative stats. Mobile phone accounts at the end of the year will be 5 times as big as the total number of fixed landline phones! And some smart people argued way back when, that it was 'impossible' for mobile phone accounts to ever bypass fixed landline accounts...
I am projecting the "6B" figure, six billion active mobile phone subscription numbers to be passed in the Spring of 2012, and that the planet's penetration rate will exceed 100% per capita by late 2014. Yes, less than three years and we'll have more mobile phone accounts in the world than all people alive, from babies to grandparents.
That number obviously includes those customers who have more than one phone or account. What of the number of unique mobile phone owners on the planet, actual people who have at least one mobile phone subscription and at least one phone? That number will near 4 Billion this year, I project we'll end the year at a bit over 3.9 Billion unique mobile phone owners/users on the planet, for a real penetration rate of 55.7%. Considering much of Africa lives on less than $1 per day, and that the planet is past 50% real unique owners of mobile phone accounts, this is a massive number too.
4.6B PHONES IN USE
What of the true count of mobile phones in use globally? That number sits between the number of uniques, and the total subscriptions. Every unique owner has to have at least one phone, but not all who have multiple accounts, will bother with a phone for each account. In most countries the prepaid SIM card allows for many accounts to be easily managed on different networks, while using just one phone. Increasingly in the Emerging World markets, phone makers now offer dual SIM (Subscriber Identity Module) or even triple SIM phones. My projection has the world with 4.6 Billion actual mobile phone handsets in use by the end of the year. Against the total planet's population, it is 67% per capita. Compared to personal computers, its more than 3x as many, against TV sets, about 2.5 times as many. And obviously while most of the phones today are not 'smartphones' they are quite advanced computer-like devices. Like we could read in my 2010 TomiAhonen Phone Book on all the stats about the phone industry, over 96% of all phones in use worldwide have at least a basic browser, more than 94% have a color screen, 77% have a camera, 68% have a memory card slot and 59% can do basic apps via Java or Brew. It's very easy to think of such capabilities as being a 'modest' pocket computer, even where they are not true smartphones (at the end of last year, only 17% of the installed base of phones worldwide were smartphones).
So if we just use last year's number for the installed base, and multiply by this year's total of handsets, the world will have more than 3.5 Billion cameraphones in use at the end of this year - for a planet of 7 Billion people. Yes, literally there will be a camera for half of the population. Like I've been saying for a while now, for 9 out of 10 people worldwide, who have ever taken a picture, the only type of camera they have ever used, is a cameraphone. The Nikon or Canon that you may carry in your travel gear, is for the wealthy portion of the planet. Most cannot afford a stand-alone camera, and will use the cameraphone instead.
Oh, and one more stat. Last year 71% of all phones in use had a 'real', HTML-compliant web browser (the rest of the basic browsers were WAP compatible). What is 71% of 4.6 Billion phones? 3.3 Billion. Yes, the number of phones with a 'real browser' is almost 3 times as big, as the total connected number of all personal computers of any kind, that are connected to the web, including desktops, laptops, netbooks and tablets. Is your website already mobile enabled?
700M SECOND PHONES
Second phone statistic we can share here is a mind-numbing one. At the end of this year, globally 18% of all people who have a mobile phone account will walk around not just with two or more accounts, but carrying two mobile phones in their pockets! That's 700 million 'second phones' in use! It is a massive number. Note that is is more than all portable personal computers of any kind. It's almost as big as the total number of smartphones (and many smartphone owners walk around with two smartphones, i.e. one Blackberry and an iPhone etc.). My joke that the youth can simultaneously carry on two SMS conversations holding a phone in each hand, is more and more becoming a reality. Note that these are not second subscriptions used for 'data' connections with a 3G data dongle for the laptop - that would be a third subscription, if you also walk around with two phones. That's three active paid mobile phone subscriptions upon a single individual. Astonishing, isn't it? That's not necessarily the 'mass market' consumer (yet) but is typical of those working in the high tech and media industries already today, and university students of course...
ONLY 39% ARE SINGLE SIM
There is another fascinating statistic that stems from the previous paragraph. As the planet proceeds to more accounts per person, especially with the proliferation of prepaid accounts, we will end the year, where less than four out of ten mobile phone customers, in fact 39%, will be of the kind who can survive with only one account (and only one phone). Yes by the end of the year, 61% of us will find it useful to own more than one mobile phone subscription. And some respected analysts still say this industry is "near saturation". How clueless they are.
WORLD'S REAL GIANTS: NOKIA AND SAMSUNG
Let's start with Nokia. By the end of the year, there will be 1.8 Billion Nokia branded phones in use worldwide. There is one Nokia phone for 27%, almost a third of the total planet's population. No consumer brand has ever been as widely spread as Nokia is today. This is the first time in the planet's history, that one brand has an active user base of more than a quarter of the total population of our world. Yes, Nokia is suffering this year with its smartphones strategy but as a consumer electronics brand, it utterly dwarfs such traditional giants as Sony, Panasonic, Philips etc. Oh, and Nokia will pass a production milestone of 3.5 Billion phones manufactured in its history, so again, if we count all phones with a Nokia logo, including countless millions no longer in use - there would be a Nokia phone for half of the planet's population alive.
But then what of number two? Samsung has started to motivate its staff that their target is to overthrow Nokia and become number 1. Samsung has been growing its market share quite strongly recently. It is not beyond feasibility, that they might end the year with about 23% market share for the full year 2011. Then counting back over the past few years, the total installed base of Samsung branded mobile phones in use would pass 1 Billion. If that doesn't happen this year, it will happen next year. Consider Timex, who sold a little over 1 Billion of its wristwatches. They did it over a 50 year span, and at no point in time, was there a Timex ticking on a Billion wrists. Or Sharp, who invented the electonic desk calculator. Counting all Sharp branded pocket calculators and desktop calculators they ever manufactured, they recently celebrated their 1 Billion milestone. But never 1 Billion used at the same time. Any other tech? Only measured in the hundreds of millions if we look at things like the Sony Walkman. But Samsung will shortly have 1 Billion active users of their mobile phones. Quite a milestone indeed.
LIMITED BY LITERACY: 4.5B WILL USE SMS
If we project SMS user base growth to this year, using last year's growth rate, we'd be near 4.8 Billion or even 4.9 Billion. But the reality of human kind is now factoring into SMS. We are at the limits of literacy. In Europe 85% of mobile phone subscribers are active users of SMS, in some Asian countries like China it's at 90%, so the organic growth is nearing its limits. Even the laggards, USA and Canada are catching up; the USA is already past 74% in active users. And then we go to places like Africa, Sri Lanka, Bangladesh, Pakistan, India, etc and we do find that SMS is used by the literate parts of the population, and growth is slowing as we approach national illiteracy levels. I do project SMS user growth, but this is the first year that I am seriously reducing my projection to far less than the historical average, simply because of literacy reasons. SMS growth will come to an end during this decade and the first signs of the growth slowing down - will finally (probably) be seen this year. And if not, nobody would be happier than me to be wrong on this. But I am now projecting we'll hit about 4.5 Billion active users of SMS, the most widely used data application on the planet, obviously.
In regards to SMS, the service is increasingly now being 'discovered' by traditional media brands and I see SMS adoption in all sorts of industries from game shows on TV (Deal or No Deal in America earned 56 million dollars out of SMS votes last year, so it's no longer just 'American Idol' who know how to use SMS in American TV - countries like U.K., Germany, Croatia, Sweden - all switched their reality shows to SMS voting) to Top 40 style pop music hit shows, that receive tens of thousands of SMS votes to suggest which song is the most popular radio hit of the week. The same goes for SMS in advertising, just last week New Media Age of the UK reported, that after a decade of using SMS (and MMS) in advertising, such major UK advertisers as Domino's Pizza and Coca Cola are still increasing their use of SMS! Domino's went so far as to call SMS on par with the most effective ad platforms and by far the fastest. So don't think for one moment that the use of SMS as a media channel will slow down any time soon (do you have SMS central to your mobile strategy?).
MMS PASSES 2.4B
The second most widely used data platform is not the Internet, it is not Facebook or Twitter or YouTube or Google etc. It is MMS, not just 'picture messaging' but literally MMS stands for Multimedia Messaging Service. Multimedia. Not just pictures, but also sounds, also video clips and also longer texts than 160 characters of SMS. I am teaching in my media and advertising workshops that MMS is the media brand's dream, the ultimate interactive multimedia - media - platform. Better even than SMS! And its user base keeps expanding. We passed two billion active users last year; should hit 2.4 Billion by the end of this year. Note that MMS is twice the size of global e-mail, nearly four times bigger than Facebook. And the content providers love it. The US TV show Pretty Little Liars experimented with MMS last year, got 12% of its audience to sign up for weekly updates including a preview of the next episode, sent via MMS. This as an 'experiment' by the ABC TV network. In Asia MMS revenues already exceed SMS revenues and in many markets like China, MMS is a standard staple in the media landscape. In Europe, it's a patchy world, with Norway at one extreme (84% users use MMS), but in other countries like Germany - very low numbers still. My media contacts tell me that the USA now leads
Europe in the use of MMS by media brands, and I am not surprised. The Americans are fast to smell money, and MMS is all about the money! Like I keep saying, Mobile is the Magical Money-Making Machine!
M-NEWS, MOBILE ADVERTISING - mAD
The world is loving mobile as a news channel, it is the news brands who struggle to capitalize on it. But m-news is growing by leaps and bounds. By the end of the year we will have 2.5 Billion consumers who are actively receiving news on their phones - most of those will be paid news, most of the news will be on SMS and MMS, not via smartphone apps (yet). But note, already this summer we will pass the point where a third of the planet consumes news on a phone. Not a 'third of mobile phone owners' - I mean literally, a third of the planet. I teach to Western audiences that mobile is the 7th mass medium, but in the Emerging World mobile is not the seventh, not the fifth, third or second. It's not even the first medium - for many media consumers in the less affluent countries, mobile is the only mass medium! If you want to know the cricket score in India, odds are you will find it on your phone, not via a newspaper, TV, radio or the Internet...
And where there is media, there is advertising. Mobile advertising is in silly growth stage right now. Every major credible media and advertising exec is falling over each other to give ever more bullish forecasts about how much advertising and marketing will transit phones this year. I am projecting the total number of mobile phone users who will receive ads on their phones will hit 3.7 Billion people. By the summer, we'll be at the point, where half of the planet's population will have seen ads on their phones. This is twice the reach of ads on TV and 7 times more than the daily circulation of all newspapers. I have no numbers of the use of advertising on radio (not all countries and all radio networks have advertising) but the total number of radio receivers worldwide is 3.9 Billion and certainly not all of them will be used to receive ads. So if you're an ad-man, you need to become a mAd-man (or woman...). I think it's apropos that the heart of the advertising industry is Madison Avenue of Manhattan, as the ad industry now is migrating to the mAd industry.
TANTALIZINGLY CLOSE TO ONE TRILLION U.S. DOLLAR REVENUE
Mobile industry is already a Trillion-dollar industry and it is not the only trillion-dollar industry (think of oil etc.). However, mobile industry is the one reaching that massive milestone the fastest, meaning mobile is literally the fastest-growing giant industry in the economic history of mankind. But that number today includes services, handsets, and networks (and accessories, apps etc). The 'services' part of mobile - our voice calls, SMS text messages, mobile internet access, etc - even when we remove the costs of the handsets and network infrastructure, is shortly going to be worth one Trillion dollars. I think we will not hit that level this year, we will fall a couple of Billion dollars short of the big T, but it will be tantalizingly close to a Trillion. And some analysts may actually call it at a Trillion this year. I think we'll pass that next year, but we have to see. That time is very near.
MOBILE VAS $100B
The messaging services will approach $190 Billion in service revenues this year, will pass 200 Billion dollars in 2012. But the 'non-messaging' premium data services will hit a massive milestone this year, passing 100 Billion dollars in total value. That is like three times Hollywood or almost as big as global radio, and yes, far bigger already than the size of content revenues (including advertising) on the internet.
This was a preview of big numbers coming for 2011. For those who need more numbers, and the 'real' numbers of today, rather than the projected numbers of tomorrow, remember my two resources for you. The latest annual edition of my Almanac, the TomiAhonen Almanac 2011 has all the latest stats for the total mobile industry effective January 1, 2011. It has 94 tables and charts. And for those who are specifically interested in the handset market, last year I released the first edition of my Phone Book, a statistical review of smartphones, dumbphones, featurephones, installed bases, market shares etc relating to handset market. Both eBooks are formatted for small screen and cost only 9.99 Euros. Take a look at TomiAhonen Almanac 2011 and TomiAhonen Phone Book 2010 for more.
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