Mobile Services Beyond Messaging? Excellent TNS Global Survey Reveals Tons

While that Nokia market share collapse is going on, there is life elsewhere. I've been chronicling on this blog the rise of the mobile data economy since my first book came out on the topic more than ten years ago. Early on we saw services around very basic digital technologies like SMS and WAP. Then we started to see more powerful services like MMS and gradually HTML web based solutions for mobile. Now we see smartphone apps and QR codes and Augmented Reality and a whole host of newer technologies. 

The data on their usage has always been scarce, and I have been eager to publish here when we had global or regional or sometimes even national data on significant mobile service use. I've chronicled the long rise of SMS text messaging which is now nearing 'Peak SMS' user, usage and revenue levels (SMS has not yet peaked, don't worry, but Peak SMS is coming soon, as OTT services are rapidly cannibalizing the users and usage, especially the heavy users). I've reported here on this blog that SMS has reached 5 Billion active users by end of 2011, and generated revenues of 126 Billion dollars. MMS is the second most widely used data service on the planet, still growing strongly globally, which has 2.5 Billion active users and generated 39 Billion dollars in 2011. Then I've occasionally reported on some of the early 'mobile web' users and usage, like news, search, gaming, music and advertising on mobile. Today I have something magnificent, on the more advanced uses in mobile, courtesy of TNS.

TNS has run a global survey across 57 countries covering 48,000 people on all six inhabited continents. It is one of the largest if not the largest survey of its kind in mobile usage, with a harmonized set of questions. And differing from most major global surveys done in the past decade, they didn't bother with the basics of who uses a camera on their phone or who sends SMS text messages, haha, those are widely known. TNS went digging much deeper. Who uses QR codes for example (!) and the mobile wallet, etc. They also surveyed who download apps, who use WiFi on their mobile phones and who use the mobile web ie do browsing on the phone. Very VERY interesting findings.

I've been digging through the numbers, you can actually go and see the individual data on very many data points, for each of the 57 countries, so wherever you live, I suggest you go see your country (or if its not included, then some of the neighboring countries). This is remarkable data, out in the open and public domain. Thank you TNS for a brilliant study and for making so much of the data available.

BIG PICTURE: APPS & WEB

So, lets start first with the big picture. TNS surveyed mobile phone users (not networks for their 'subscribers' so this is pretty accurate human usage data, not skewed by stats where some countries now have over 200% mobile phone subscription penetration rates. But as TNS only reports the data as percentages (and I couldn't find a global number), I calculated each of regions, as I use in the TomiAhonen Almanac series of annual statistics, and then used the actual 'unique user' statistics from the Almanac to calculate regional usage data for each category TNS reports. Then I added them up, so we get the following, quite astonishing usage numbers:

Mobile Browsing, ie 'mobile web' or 'wireless internet' use on mobile phones has reached 1.6B unique users, based on TNS data, and calculated across the regional unique user numbers of my Almanac for year 2012. This is measured data by TNS, and it removes multiple users by the same person - ie if you have a Blackberry and iPhone, and do your emails on your Blackberry (thus using the internet on a phone) and do your web surfing on the larger screen of the iPhone (also using the internet on that phone), you are using the mobile internet on two devices. But you are one person. TNS data, when multiplied across the current unique user base globally, tells us there are 1.6 Billion unique people using the mobile internet ! (remember, some of these will use the internet also on a PC). This compares by the way to 1.8 Billion that I counted as total subscriptions used for mobile browsing (allowing multiple handsets by one person). Very consistent data. And yes, the world has about 2.4 Billion active internet users so the 'midway point' of how many people use a mobile phone to do (at least some of their) internet surfing has obviously passed years ago, not like some misguided analysts keep promising that this point will come in the near future. It has happened already! Get over it. Most of the users on the planet who access internet content on browsers, do so on mobile phones, not on PCs or tablets. Obviously this type of browser-based activity is not limited to smartphones, most featurephones have full HTML browsers and even older basic phones tend to have simple WAP browsers. Still, 1.6 Billion unique mobile internet users, that is a massive number, where the global total of PCs is under 1.4 Billion and they are not all yet connected to the internet..

Apps are a big growing area of excitement in mobile. How many mobile phone owners use apps today? 1.1 Billion worldwide. Note, this is significantly more than the total installed base of all smartphones in use of about 900 million worldwide today. Why is that? Because obviously it includes apps downloaded to simpler, 'featurephones' that usually accept Java or Brew based apps. Yes. 1.1 Billion people currently download and use apps on their phones. Big opportunity indeed. But do remember, this is a vastly fragmented world, with 350 million Androids, 275 million Symbians, 150 million iPhones, 80 million Blackberries, 30 million old Windows Mobiles, 12 million badas, 9 million newer Windows Phones, plus many hundred million Java/Brew based featurephones. And tons of small OS platforms like Palm, LiMo, MeeGo, Maemo, etc. And keep in mind, the mobile web user base is dramatically bigger.

WIFI USERS

Then lets take a look at the WiFi threat to the industry. Who is using WiFi? This is very useful data, we haven't had anything like this before in the public domain. Out of 6 Billion mobile phone subscriptions in use in the world, and 4.0 Billion unique users, how many access the internet via WiFi? 1.0 Billion thats who. Yes, again, more than the total installed base of smartphones at about 900 million (because many featurephones include WiFi). What is that as a percentage of all unique users? Yes, 25% of the global mobile phone user base is already using WiFi services today.

This is one area which has a very clear regional split, according to the TNS findings. When I grouped the 57 countries according to my TomiAhonen Almanac split to 8 regions, we find WiFi usage divides like this: in the Industrialized World 35% of us use WiFi on our phones, but in the Emerging World markets, only 12% do so. The highest use is in Advanced Asia-Pacific where 42% of us use WiFi on our phones. Meanwhile the lowest use is, not surprisingly, in Africa where only 3% of mobile phone owners use WiFi based services on their phones.

MOBILE SOCIAL NETWORKING? BIGGER THAN FACEBOOK

And what of social networking on mobile? This is a massive number. We've heard that the majority of Facebook users today access FB on their mobiles, but what is the global number for social networking users on mobile? According to TNS numbers, again multiplied by the unique users as per my Almanac, we get to .. 1.3 Billion currently active users of social networking on mobile! Yes, thats QQ and Mobage and Cyworld and Mig33 and all those other social networks that I identified recently on this blog in the first global survey of the space. 1.3 Billion say 'Communities Dominate Mobiles' haha.. Excellent.

QR CODES, M-WALLET

And what of QR Codes and Mobile Wallet. These are VERY interesting numbers too. QR Codes are rapidly gaining acceptance worldwide. How many of us use them? 380 million already are active users of QR codes globally. Japan, Hong Kong and South Korea lead globally with 60%, 47% and 43% of their mobile phone owners currently using QR codes. But even regionally, while Advanced APAC region leads (27%), North America (19%) and Western Europe (14%) are rapidly following suit. 

How about mobile wallets. Here the TNS study has perhaps had some questionnaire issues, when we look at for example Philippines and Kenya numbers, so this is not 'mobile payments' users or 'mobile banking' users which will be significantly bigger, but lets consider this as a 'floor' level for more advanced mobile wallet solutions perhaps. The real user number of mobile payments is definitely bigger. But yes, what did we find? The world today has 290 million users of mobile wallets. That is also a very big number considering how recent the innovation is.

There is very much more in the TNS data, please go dig through it for yourself. Let me end here with two relevant regional splits of the advanced service usage, that is new data for us globally:

MOBILE SOCIAL NETWORKING USERS, REGIONALLY

The number of users of social networking, as a percentage of all unique users, and a total number are:

REGION . . . . . . . PERCENT . . . ACTUAL USERS
North America . . . 34% . . . . . . . 114 M
West Europe . . . . 31% . . . . . . . 127 M
East Europe  . . . . 16% . . . . . . .   54 M 
APAC Advanced  . 40% . . . . . . . 149 M
Asia Developing . . 13% . . . . . . . 474 M
Middle East . . . . . 29% . . . . . . .   74 M
Africa  . . . . . . . . . 11% . . . . . . . 113 M
Latin America  . . . 33% . . . . . . . 200 M

TOTAL  . . . . . . . . 33% . . . . . . . 1.3 Billion

Source: TomiAhonen Consulting May 2012 estimate, based on TNS Global Survey April 2012 and TomiAhonen Almanac 2012 
This data may be freely shared

QR CODE USERS REGIONALLY

And this is exciting to see, the first global survey of QR Code users, by the same methodology, split regionally for you:

REGION . . . . . . . PERCENT . . . ACTUAL USERS
North America . . . 19% . . . . . . . 65 M
West Europe . . . . 14% . . . . . . . 59 M
East Europe  . . . .   5% . . . . . . . 15 M 
APAC Advanced  . 27% . . . . . . . 99 M
Asia Developing . .   1% . . . . . . . 36 M
Middle East . . . . .   6% . . . . . . . 16 M
Africa  . . . . . . . . .   1% . . . . . . . 16 M
Latin America  . . . 12% . . . . . . . 74 M

TOTAL  . . . . . . . . 10% . . . . . . . 380 M

Source: TomiAhonen Consulting May 2012 estimate, based on TNS Global Survey April 2012 and TomiAhonen Almanac 2012 
This data may be freely shared

Lovely to have such good strong data on how this industry is growing. Thank you TNS ! And anyone who is interested in recent global mobile data, remember the TomiAhonen Almanac 2010 edition (still very recent data) is totally free for you, complete and uncensored, as my gift to my readers. Please visit Lulu.com to download your free copy of TomiAhonen Almanac 2010 Free Edition.

Comments

[cycnus]

Wow... APAC developing percentage is really high in QR and also in social networking.

[Tomifan]

@Tomi
Could you sync the regional split of mobile wallet in Asia to your claimed Nokia Money users in India? Sounds to me that about every single mobile wallet in India is Nokia Money if both numbers are legit.

[Francisco Moreno]

I was hoping you'd speak a bit more about the decline of BBM, and the ascent of WhatsApp, Viber, Skype, and iMessage as texting platforms.

With regard to genuine, normal human beings scanning and using QR codes, I think the definitive blog is:

http://picturesofpeoplescanningqrcodes.tumblr.com/

[Baron95]

Tomi, SMS *revenues* have peaked overall and have started to decline in Asia and Europe.

The Ovum Feb/2012 report records that in 2011 $13.9B in SMS revenues has been lost to IP. With the trend accelerating.

iMessage (not BBM) is the biggest driver of the decline now. In the first 3 months since iPhone 4S/iMessage launch, 100 million iMessage accounts were activated and 26 billion iMessages were sent (again read the Ovum report).

A few other datapoints for you to get the magnitude of the decline. Swisscom just reported that their SMS revenues fell by 28% this quarter driven ENTIRELY by displacement to IP (again, mostly iMessage).

Tomi, you do a great job (probably the best) reporting on past numbers. But like with Nokia/Symbian vs iPhone, I think you are severely underestimating how fast the shift from the insanely priced SMS revenues are escaping to near free IP traffic.

This is similar to the fact that mobile browsing only started in earnest once Apple launched the first fully functional browser on a phone.

Unlike the klugy BBM that requires creation and registration of BBM IDs, iMessage is automatic and transparent to end users. If the recipient has an iOS device the message will be rerouted to iMessage transparently.

Similarly, Facetime is completing the (never caught on) UMTS video calling and (together with Skype and the like) eating into calling minutes.

Further, this is teaching advanced users that all they need from operators is a fast, low latency, low cost dumb data pipe.

Perversely, it is also making rich Americans, Europeans, Asians, pay much, much, much less per message than poor people around the world on pre-paid SMS phones.

I.E. the carriers have predatory pricing for the poor, while the rich, well informed consumers escape the charges.

You, should be blowing the whistle on this

[Baron95]

Now some more datapoints that are important for future trend predictions - again, you need to look at the early signs. The future will not be a linear extrapolation of the past.

In the US market, which, despite what you may think, is shaping the present and future of smartphones and mobile computing, the trends are setting up for a huge inflexion point.

The latest NPD data, shows that, in the US, 2/3 of phones sold are smartphones, and of those, a full 90% - that is NINETY PERCENT - are either Android or iOS.

I think the trend is clear - in the very near term, there will be two (at most three) OS/ecosystems controlling near all the handsets.

What does that mean? Well, if Google manages to roll out an iMessage equivalent, and if the two interoprate, then all of a sudden you can see a near collapse of excess SMS revenues.

Now, add to the mix, that these phones over the next two years, given the replacement cycle, will all move to high-speed, low latency LTE, and will be there most of the time.

Well, suddenly Facetime and Skype calls over IP will have near full reach, will be in fact higher quality than cellular calls and will be basically free.

Tomi, that is the disruption that I'd like to see you cover. No, operators can't fight it. Apple is unstopable - carriers that don't have the iPhone lose high value subscribers. Apple will continue to add convenience and operator toll bypass features into iOS. Google will use that as an excuse to add the same features to Android.

This is just the very beginning of control moving away from operators and operator-aligned OEMs (RIM, Nokia, DoCoMo OEMs).

[cke]

@Baron95 - and there comes the decline of the operator "orifices" that Jobs railed on about.

[So Vatar]

@Baron,
these are comments coming from your side that I like much more, more content instead of arrogance.

I largely agree with your comments, but there is one issue that won't go away that easily, at least here in the USA with the monopolized carriers:
In order to do the IP based things you describe you do need a data connection. And the spectrum is owned by the carriers. So, logically they will shift their revenue (and profits) from "legacy cell phone functions" to IP based revenues using their spectrum. There is technology available to determine (via package inspection) which services are used over their networks (IP call, IP messaging, browsing, etc). The revenue shift is already under way, as unlimited data plans went away, carriers disallow certain services (tethering) etc. So, our great monopolized carriers will not go away without a fight as long as wireless spectrum is rare and in their hands.

Of course consumers hqve a way around it: Forgo the wireless 24 month contract data plan and use the smartphone data connections primarily on WiFi. Further proliferation of WiFi hotspots - which already are available at home, at many work places, some public transport systems, and many businesses (Starbucks, coffee shops, hotels etc) in addition to an optional supplemental on demand carrier data connection (usage based) are a possibility for consumers to get many of the benefits of an expensive data plan for a fraction of the cost.
Now, if one has to be connected all the time in order to check facebook and check in with foursquare, then you need AT&T et.al, they will take care that your wallet doesn't get too heavy.

Additionally I see an opening forming to disrupt the legacy carriers. We'll see how this will turn out and who the disruptor will be.

[Baron95]

@So Vatar - not exactly. With pure cellular call, *ONLY* the mobile operator can initiate or complete the call - customer is captive. Same with cellular SS7 SMS - captive.

With IP, the user is no longer captive. If the operator charges too much for data pipe, user just shifts more and more of their usage to WiFi - either free-public or paid-public or home or work.

With LTE and all services via IP, the user is empowered to do data rate arbitrage. If I am home, at work, at a library, at a starbucks with WiFi, I use that. Or I pai $10/month for a service like Boingo, and sign up to the minimum carrier data plan.

Plus the IP services have many, many advantages for the user. For example, I can use iMessage and FaceTime and Skype when I am on a plane at 30,000 ft using the on-board wi-fi service. Cellular SMS and cellular calls and cellular data are useless in that environment.

Make no mistake. 5-10 years from now, operators will not be able to extort advanced users in advanced markets to the extent they do today.

This is equivalent to what happened to the railroads in the US once trucks and interstate highways developed. Suddenly what railroads could charge for freight, was limited to the lowest long distance truck freight charges.

They went from a monopolistic position, to an also ran and lost 90% of the US freight business in a couple of decades.

AT&T already went to a flat all you can eat domestic SMS plan because of iMessage. Not my opinion, De LaVega said that last week.

[So Vatar]

@Baron:
Isn't that what I said? No?

[Baron95]

Sorry So Vatar - I replied from my phone and had only seen the first part of your post. Yes. Agreed.

I don't think Tomi understand what is happening with SMS in the iMessage (et al) era. It is shocking that in 3 months, Apple moved 10% of the SMS traffic to iMessage.

[elina]

I have to say,I dont know if its the clashing colours or the bad grammar, but this blog is hideous! I mean, I dont want to sound like a know-it-all or anything, but could you have possibly put a little bit more effort into this subject. Its really interesting, but you dont represent it well at all, man.

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[CIO]

Nokia is bankrupt; here's why:
- Pending massive costs associated with future layoffs at Nokia (my very optimistic estimate is around 4 billion Euro?),
- Massive costs associated with NSN failure including pending layoffs (2 billion Euro?),
- Pension fund costs (1 billion Euro?)
- Pending tablet failure (1 billion Euro?)
Now just add up cash Nokia will burn each Q due to failed Windows Phone strategy (1B euro / Q?) with falling Symbian sales and bankruptcy is guaranteed. It is also unlikely that anyone will acquire Nokia. Google/Apple or Microsoft would only be interested in patents and certainly would not like to deal with closing Nokia factories, dealing with thousands of NSN employees (especially unions) and various other liabilities. This is the same reason why they couldn't sell NSN despite being desperate. Sorry to say, but Nokia is already gone. It's sad to watch. Tomi's strategy to save Nokia could probably help to recover this company up to last month, but now it is too late and everything will pretty much end on July 19, unless they'll take WorldCom path.