The ultimate number in technology is upon us. Within months, literally, only months now, we will reach the point in time that there are more active mobile phone connections on the planet than human beings alive. Not 100% penetration 'by households' or 'by adults'. No. I mean 100% mobile penetration per capita. By humans alive. Counting literally everyone from babies to great grandparents.
This is totally, comprehensively unprecedented in the human history of technology. No tech ever, no tech, has even come close. Not television sets, not Playstations, not PCs, not Walkmans, not radios, not cars, not motorcycles, not even bicycles; not credit cards, not even bank accountsl; not books in print, not newspaper circulations; not the reach of electricity or landline telephones or even running water; not wristwatches, not toothbrushes, not even pens and pencils.. have been as widely used as mobile is today. And now comes the ultimate milestone. The first time ever, there will be a consumer technology that exceeds the whole human population by its size.
Source: TomiAhonen Consulting August 2012, TomiAhonen Mobile Forecast 2012-2015
This data may be freely shared, this image may be freely used
This is the big picture. This is the biggest story there ever was in any technology, ever. The most widely reaching technology ever - by a massive margin by now - and what is more, mobile is not just a telecommunication tool, it is also a digital, interactive mass media channel. It is also a payment channel. And it is the ultimate technology cannibal.
This is your primer to understanding the most radical, utterly disruptive technology there ever was, and what it is doing now, and where it is headed next. This is a long blog, so set yourself some time. But if you are in telecoms, or media, or advertising, or the financial industry, or in travel, or retail, or education, or healthcare, or well, almost any industry from farming to fishing to forestry to funerals - mobile will change your life. This is your guide to your digital future. Do grab a cup of coffee and follow me after the break here to an adventure into the electronic eldorado, the digital klondyke that we call mobile. We are about to pass the Mobile Moment. That point in time, where humans for the first time ever, found a consumer technology that had grown larger than the total human population itself.
And a brief comment about why me? Why would some Tomi T Ahonen be telling you this on his Communities Dominate blog? Not because Forbes calls me the most influential expert in mobile, no. Because someone was going to be there, to see it from the start. Someone saw this massive Trillion-dollar industry at its birth. I was not smart enough to invent this industry, and I was not clever enough to get myself into a career where this was happening. It was all total coincidence, but there would be one country, where mobile first became a mass market (that was Finland). There would be one country, where mobile first exceeded all 'expert' views in its growth and size, where mobile actually grew past its fixed landline telecoms 'big brother'. (That too, was Finland). Then there would be one country where mobile would pass the conventional wisdom of 'one mobile phone per one human being' (that was also Finland). This set up the logic that leads to today's blog article. It is only possible to predict that some day mobile phone accounts will exceed humans alive, if some people are willing to walk around with two mobile phones (or at least, two or more mobile accounts, even if sharing them on one handset).
And that happened also, obviously in Finland. But there were three major telecoms operators/carriers in Finland at the time. The one where this was first observed was the biggest of the challengers in mobile - Radiolinja as part of Elisa Group. And there, before this was public domain data, the first to see the data suggesting these astonishing revolutionary trends, would be the team that examined subscriber growth - that was my team. I was literally the world's first person to see the early data, in the country where it first happened, at the carrier/operator that first measured the phenomenon. My first calculation on the trend was done on my trusty PDA at the time, the HP LX 200 that I carried everywhere, and I sat in my fellow colleague Mikko Heijari's office, when I first examined the fresh data we had just received, and I then made a preposterous projection, what if this trend were to continue...
This is a picture of a young 37 year old Tomi T Ahonen, managing the unit for my employer, Elisa Group what was then the biggest revenue and profit engine in telecoms: International Calls. And one of my projects back in 1997 was the world's first fixed-mobile service integration project that had me jump 'to the dark side' of mobile soon thereafter..
Since 1996 I have known, from data I have personally seen, from data that was not yet even released to the Finnish regulator and far less to the competitors, that mobile phone subscriptions would grow to pass fixed landlines (which happened in Finland exactly on that projection, by 1998) and also, that this was partly fuelled by the bizarre notion of multiple subscriptions. I was talking about this at telecoms forecasting conferences internationally as early as 1997 - and I was seen as a lunatic, a total heretic, obviously by my peers at that time. So it brings me great pleasure to track the path we have travelled since that first astonishing data point, that we looked at with Mikko, and I calculated, and then took to our boss, Matti Tossavainen at Elisa. And I am happy that this industry moves so fast, that I am still alive to see the ultimate proof. It is only months to the point where the human race sees the first consumer technology, that has more users than humans alive.
You will start to see that statistic reported by some analysts eager to grab headlines already towards the end of this year, 2012. By my current projection, we should pass the point when there are more active mobile accounts (prepaid and postpaid, combined) by about February or March of 2013. But that time is so near, we don't count years anymore, now it is down to months. And the stories will start to break - albeit a bit prematurely, before this year is done. So lets put the biggest number of all time, into its proper context. This is also intended as background material for various journalists and analysts who may be writing about this unprecedented moment in human history. The Mobile Moment in History.
Unprecedented, yes. An overused word often in hyperbole. But literally, unprecedented, yes. There has never been any consumer technology that exceeded the total number of humans on the planet by its reach. The planet has currently just over 7 Billion people alive. Automobiles have only reached about 1 Billion registered and in use. Personal computers do a bit better, at about 1.3 Billion when we add up all desktops, laptops, netbooks and tablet PCs like the iPad. Television? Is approaching 2 Billion TV sets in use worldwide. The Internet? When we add all PC based users, and all shared users (families sharing one PC at home; and PC based internet shared at various internet cafe's and computer labs at schools and libraries), and add all mobile phone based users (smartphones, basic 'dumbphones' including HTML web and the more basic WAP) we get past 2.4 Billion users. Radio receivers? There are about 4.1 Billion of those across the planet. But we will have over 7 Billion mobile phone connections live and active very shortly. We are already past 6.4 Billion now in August of 2012 and the industry grow that fast, yes, that within months we will hit the 7 Billion number.
Yes, literally, no technology has been as widely spread, used by as many people as mobile. Wristwatches? No. The peak production of watches happened early in the last decade and their sales are now in gradual decline. We hear from various statistics regularly that the trend is away from wristwatches, to use the clock on the mobile phone. The writing instrument? Paper and pen? The humble pencil? Yes, very VERY widely used indeed. Except that 800 million adults are illiterate and have no use for a pen or pencil. Add to that about 1 Billion kids too young to go to school yet, and yes, the market for people who have even learned to read and write is only 5.2 Billion. And what of that ubiquitous technology, the toothbrush? I reported earlier an MMA statistic that the world has 4.2 Billion users of toothbrushes, which was I believe based on calculations on access to running water. The truth is actually a bit worse. A more thorough analysis including the sales statistics and replacement of toothbrushes reveals an even lower number, alas. The number of people who do use a toothbrush according to the 60 Second Marketer is only 3.5 Billion people. But the world will pass 7 Billion mobile phone connections live and in use, by around the time when year 2012 turns into 2013, give or take a few weeks.
DVD players? No, VCR's? No. Playstations? No. All gaming consoles, PS family, Xbox and Nintendo? No. What if we toss in all portable gaming devices, Gameboys and PSPs into the mix, added to gaming consoles? Nope. Digital cameras? No. Any type of stand-alone cameras, digital or film based? No. What if we add camcorders, videocams and even any Super 8 film cameras that might still be in use today? No. Walkmans? No. iPods? No. Any type of portable music players including all cassette walkmans, all portable CD players, all stand-alone MP3 players and iPods - combined? Not even close. Home CD players and CD players in portable boom boxes? No.
There has NEVER been a technology in use on the planet that has 7 Billion active users or active paid accounts. Newspapers have a global circulation of about 450 million. Fixed landline phones only reach about 1.1 Billion landline telephones. Multi-channel TV systems, all cable TV, satellite and digital TV combined reach under 1 Billion television sets. Credit cards have under 2 Billion unique users (many of whom have multiple cards, though) and banking accounts reach under 2.5 Billion total unique users worldwide. If you have insurance for your home or car, the total unique user base of insurance is well under 2 Billion. But we are shortly reaching the point of 7 Billion active mobile accounts. Wow. This is a truly astonishing point in time.
So you may have heard that mobile is important to your industry or business or department or job. But what do others think of mobile? The first industry to feel the mobile invasion was fixed telecoms, obviously. Those battles were fought in the late 1990s and early in the past decade when many still thought it possible for fixed landlines to survive or 'to win' against mobile. Today fixed landlines are a niche in telecoms, mostly serving business customers and in residential uses, mostly only the internet connection. If you still have a home fixed telecoms landline (a third of Americans, over half of Finns have already abandoned the landline) and its connected to a telephone (rather than serving the internet connection or perhaps your home fax machine, haha) and it rings - will anyone answer it? No. Because everyone in your family knows that if the home fixed landline phone rings, it can't be for them, because their friends call the mobile number directly. Isn't this true? Yet a decade ago, if the landline rang, we answered it. Now if it rights, its either a wrong number or a sales call.
TO SEE FUTURE, LETS REMEMBER RECENT HISTORY
The cellular telecoms revolution did not start with Marty Cooper's famous Motorola phone. The first commerical cellular '1G' First Generation analogue telecoms service did not commence in Chicago on Ameritech using that iconic Motorola phone in 1983. No. This industry started in 1979, when NTT of Japan launched the first commercial cellular mobile telecoms service for Tokyo with 30 base stations and a hideously expensive cellular telecoms service using carphones. So this mobile telecoms industry is now 33 years of age. Very young indeed. And its is taking scalps. It is claiming victories. The landline business? The fixed landline business is going, going, gone. I was just at LAX Los Angeles International Airport and walked by a wall that used to have a whole bank of payphones. Not anymore. I remember writing about it somewhat cautiously, early in the past decade, that at some point those payphones will be gone. Now increasingly they are. Finland was the first country to decommission all payphones and phonebooths.
The analogue version of mobile telecoms could not really do much other than eat into the telephone business. But then came digital. GSM launched commercially in 1991 in my native Finland, on the Radiolinja network (part of Elisa Group, one of my former employers). That ushered in the era of modern mobile telecoms including competition in mobile. With digital came the opportunity to offer new services, services we could not do in the analogue days of cellular telecoms. First up? SMS text messaging.
Matti Makkonen (then of Telecom Finland) inventor of SMS Text Messaging who later when we both were employed at Nokia, mentored me, and was the informal godfather to my Consulting Department at Nokia
Ah, SMS text messaging. Invented by Matti Makkonen then of Telecom Finland (now part of TeliaSonera) for which he won the Economist Award. Matti didn't make any money on his world-changing invention, as SMS would then be integrated into the standard of GSM. The first machine generated SMS were used for testing networks in 1991 but it soon was put to commercial use. The first commercial text message, sent from a mobile phone to a mobile phone, was also on the Radiolinja network in Finland, using a Nokia mobile phone, by Nokia's Riku Pihkonen to another Nokia phone in late 1993. Mobile would never be the same. Up to that point, it was totally correct to call this the 'mobile phone' industry or 'cellphone' industry. But SMS text messaging changed all that. In just 18 years, by 2011, SMS text messaging passed voice calls in the total number of users on cellular networks. Yes, you read that right. Today there are more people with a mobile device who use SMS text messaging, than who use voice calls, globally. We should no longer call it a mobile 'phone' or cell 'phone' anymore. I am trying to remember to call it only a 'mobile'.
And what of other digital text-based communication? How about email? Well, SMS text messaging passed email in total users way back in 2002. eMail has 3.1 Billion active email accounts in use today, according to Radicati. SMS has 5.8 Billion active users according to the latest count by Chetan Sharma. SMS is by far the most widely used 'data' application and service on the planet. Yes, SMS is almost twice as big by users and reach, than email. SMS is more than five times as big as Facebook. And even those who are heavy smartphone users, who have subscribed to various 'OTT' services like Whatsapp or Blackberry Messenger or iMessage or Skype, will be using SMS regularly - the latest survey in July of 2012, of 2,000 smartphone owners in the USA and UK, found that 92% of smartphone owners still use SMS, even though most of those will have some kind of OTT services installed on their smartphones. And get this - of smartphone users - 69% say they 'would be lost without SMS'. Yes, SMS is addictive, has been proven to be addictive in university studies from Belgium to Australia. As addictive as cigarette smoking. The very latest University of Chicago study now in 2012 found that also Blackberry messenger and the use of Twitter on mobile produce similar addiction as SMS text messaging. That was our first - first - innovation in mobile. 19 years ago. SMS text messaging was launched commercially in Finland on Radiolinja/Elisa network. And here we stand today, consumers say they would be lost without it.
MOBILE MEDIA STARTS WITH MUSIC
So then started the innovations. The first major industry to be hit by mobile digital disruption was music. In 1998 a simple innocent-seeming innovation happened in Finland, when a local internet provider asked to have premium price access to email via SMS. The mobile operators.carriers asked, are you serious? You want to charge a premium so you can send emails to our mobile phone numbers, as SMS? You are aware that the length is only 160 characters? Yes, that brave little unprofitable ISP in Finland said and suggsted that the carriers keep a third of the money, charging about one dollar per message. The carriers thought this was some email-to-SMS gateway solution to perhaps enterprise customers. And they laughed all the way to the bank. And then the traffic started to build. The billing systems whirred money and this little ISP was starting to receive massive monthly payments from each of the three carriers. There could not possibly be that much email traffic at these astronomical rates. A few months later, when the carriers looked into what that was - it was the ringing tone.
Little Finnish unprofitable ISP called Saunalahden Serveri ie Saunalahti (later renamed Jippii Group and now part of Elisa) had invented the downloadable paid ringing tone, in the Autumn of 1998. The mobile data services industry - the mobile media industry in fact, had been born. Saunalahti's ringing tone business went profitable within weeks. The whole ISP went from loss-making to profits within months. And soon innovated into areas of downloadable logos and other early 'premium data' content. The 'merger' that resulted in Elisa taking over Saunalahti some years later, is said to have been a reverse takeover, the Saunalahti people negotiated such a good deal that they ended up taking control of Elisa Group in that 'merger'. The little ISP that could..
The ringing tone concept was a group project within Saunalahti, there is no single inventor of the downloadable paid ringing tone as a mobile content format. But it was a small team. One of the experts on that team was my former Elisa colleague, Sara Melkko (who among her many accolades is also a bronze medal boxer for her weight class haha) who would later join me in my third book, 3G Marketing as co-author.
Ringing tones? Yes. Finland had the first radio chart of the bestselling ringing tones as early as year 2000 on radio station NRJ. A Finnish pop band, Nylon Beat, was the first to launch their newest single as ringing tone before releaseing it as a single or on radio or music video, also in year 2000. 50 Cent was the first major artist to earn more out of his ringtone sales of the hit In Da Club than he did out of the sales through traditional media channels.At its peak around year 2008 the global ringing tone business ran revenues of 5 Billion dollars, three times more revenues earned by the humble basic ringing tone, than total global revenues of the Apple iTunes music store for the iPod. That was ringing tones. While its peak has now passed and most phones can do far more advanced music and often create your own ringtones out of real snippets of your favorite music, the basic ringing tone still generated over a Billion dollars of revenues worldwide in year 2010, twelve years from launch. Over the past 14 years, the ringing tone alone has generated 30 Billion dollars of global digital music revenues out of simple, digital music that can only be played on mobile phones. The Ringing Tone was the first of the original and unique media concepts for mobile. It would not be the last.
The Ringing Tone was only the beginning. By 2002 we saw the birth of the first magical and unique trick in media that was impossible on previous legacy mass media including the internet, when Shazam launched in the UK. Shazam is the music identification service that now serves 150 million customers worldwide, identifies 4 million songs per day and earns 100 million dollars per year. Then we had ringback tones, invented in South Korea, another unique-to-mobile service that is worth several Billion dollars now annually. Then we got the full-track downloads, also invented in South Korea by Sony Music in 2003, with the first artist Ricky Martin selling 100,000 copies of his new tracks as pure MP3 downloads to early Korean MP3-capable musicphones, before his album was released. It was the enormous global success of those early MP3 music-playing musicphones - epitomized in the West by Sony Walkman branded musicphones and early Nokia N-Series, that forced Apple to rush its 'iPod Phone' ie what became the iPhone - to the market in 2007. But while the music industry initially resisted the mobile revolution when it didn't see the value of early ringing tones, it has since taken on music with a vengeance. Warner Music Chairman Edgar Bronfman said in 2006 that "Wireless will become the most formidable music platform on the planet."
The next media content to fall victim to mobile was news. Capitalizing on the speed of SMS, the Finnish newspaper Aamulehti was the first to offer headline news services via SMS. The paid news headlines soon saw the free variant, as Finnish commercial TV broadcaster, MTV3 introduced the totally free news headline service via SMS, where yes, advertising was introduced as the business model. This was year 2000 the birth of mobile advertising. Newsmedia around the world took to SMS and soon also its richer media cousin, MMS. Morgan Stanley reported that in China alone, 40 million consumers have subcribed to paid SMS and MMS based 'tomorrow's headlines today' branded newspaper headline news services - that is equivalent to 39% of the total Chinese newspaper daily circulation, in paid premium news services delivered via mobile news. The telecoms regulator of India reported in 2010 that one third of all SMS text messages delivered in India are some form of media content like news, horoscopes, sports scores, TV votes, advertising etc. And in the true home market of mass media new11, the Associated Press Managing Editors annual conference announced "the future of news is mobile". The APME CEO and President Tom Churley made the definitive statement clarifying how the newspaper editors feel about the internet and mobile as distinct media, and where newspapers see their future: "Media companies lost revenues with the internet but have a chance to change that with mobile."
SNAKES? SNAKES ON THIS PHONE?
And then the next media type to come face-to-face with mobile was gaming. The first videogame on a mobile phone was Nokia's Snake, what became the most played videogame of all time, even more people have played some variant of 'Nokia Snake' than Solitaire on Windows PCs. That will soon by passed by Angry Birds no doubt, but still today, Snake rules the charts. However, Snake was a pre-installed game. I don't count it as a genuine commercial media format and videogame as such.
Some mobile games were created around SMS but what was needed was more an internet-like experience, color screens, web pages, links, and visual characters to 'play' with. That needed the mobile internet. And sure enough, we got that in 1999, when NTT DoCoMo of Japan introduced the world's first full mobile internet service, iMode. Not a crippled web substitute, iMode from the start was built on HTML ie 'real web' and if you like your iPhone App Store revenue share deal of 70/30, where Apple 'only' keeps 30 cents out of your dollar, check this out. NTT DoCoMo's iMode started and still today runs a 90/10 deal, where the carrier only keeps 10 cents out of your dollar. Talk about fair! At this time many carriers were talking that 'fair' was a 50/50 deal and even today in many laggard markets the operator keeps about half of the money. Yes, NTT DoCoMo understood that a truly fair revenue-sharing deal brings the biggest growth and best content, which brings the biggest audience and highest number of traffic. The variety and breadth of content ensures that all content providers will feel compelled to compete and keep their content fresh. A truly 'win-win-win' virtuous cycle. For most of the past decade, NTT DoCoMo's iMode was the world's biggest content, services and app store and served obviously as a model for Apple's iPhone App Store.
NTT DoCoMo holds a very special place in my heart among my reference customers, not just because it is the most innovative and advanced customer in this industry - can you imagine trying to provide consulting services to this company - but also a once-in-a-lifetime experience. This picture is taken - yes - inside the Renault Formula 1 factory. NTT DoCoMo was then the sponsor of the back wing of the car - that is what Voytek Siewierski here is holding. Voytek was the European head of NTT DoCoMo at this time and arranged a private tour for me of the total Renault F1 factory, up to and including the wind tunnel - this on the week leading to Silverstone - and this was 2005 when Fernando Alonso would become world champion for Renault, so this was truly the best of the best. (Domo Arigato!)
What of that 'internet' then? Google said in 2005 that the future of the internet was mobile. Yahoo! agreed in 2006 and said that the majority of internet users will eventually come from mobile phones. The transition point happened in 2010, when both Nokia and IBM reported that the half-point had been reached, of all who access the internet, over half now do access the internet from mobile phones, rather than traditional PCs. Of course users is not usage or traffic, but users will transition first. In Japan, the global leader obviously, meanwhile, already the total traffic has transferred its majority also to mobile users. Today every major internet player is pursuing a mobile strategy from Facebook to Paypal and from Amazon to Twitter. Facebook and Twitter both announced earlier this year that they had passed the half-point of where most of their users now access their services from mobile devices. The Weather Channel reported that point back in year 2005. And by 2005 there really was no doubt, honestly, if you were honest and looked at the big picture. As then CEO of Google, Eric Schmidt wrote in 2005: "Mobile phones are cheaper than PCs, there are three times more of them, growing at twice the speed, and they increasingly have internet access. Mobile is going to be the next big internet phenomenon."
Source: TomiAhonen Almanac 2012
This image may be freely used
So the internet came to mobile from Japan. What of gaming then? Japanese games are often quirky and peculiar to their culture but ranged from Hello Kitty style cute cartoonish games to Western content like Disney branded games to manga comic topics and of course even massively multiplayer role-playing battle games around Samurai themes for example. Soon the South Koreans were also onboard with their similar services on their networks and these two countries counted for half of the global mobile gaming revenues through most of the past decade.
Nokia tried its very bold visionary smartphone, the N-Gage, at a time when smartphones were expensive corporate/enterprise tools for mostly email uses, like the Blackberry and Nokia's expensive Communicator models, as the world's first consumer-oriented smartphone. The world's first gaming smartphone. While it did sell about 2 million units in its two versions, that in Nokia's scale was considered a disaster and the N-Gage was duly killed. Probably scared by that experience, SonyEricsson never released a pure Playstation smartphone and Nintendo stayed away from mobile phones altogether. Yet the mobile gaming grew and grew. Along came a certain Jesusphone, also known as the iPhone, and suddenly an Apple branded smartphone was more used in portable gaming than Playstation Portables or Gameboys. And after 51 attempts at creating a successful mobile game, a small Finnish gaming specialist with a fiery name, Rovio, finally hit it big with their iPhone gaming sensation.. Angry Birds.
Today Angry Birds has passed a Billion downloads and exists on most major smartphone platforms. The company earns about a third of its revenues from the gamers directly, a third out of advertising, and a third from merchandising. There is an official Angry Birds soft drink - get yours when connecting at the Helsinki International Airport in the Angry Birds store - and there are even amusement parks on Angry Birds themes. So how is the gaming industry thinking about mobile as a threat? EA, Electronic Arts, the biggest gaming company was already bullish of mobile gaming back in 2006. By 2012? The 'Olympics' of videogaming - the World CyberGames announced that "WCG will feature awards and finalist games only as mobile games, because all major gaming companies now make the majority of their money on mobile."
ITS A MAD MAD MAD WORLD
So wait! What happened to mAd? The mobile advertising part? Oh, didn't I tell you. Yes, we had the world's first global conference on mobile advertising in February of 2001 in London (that I chaired) and it featured many of the pioneers of the fledgling industry sector. Mobile advertising had a rough start in most markets, growing at modest pace, except, no surprise, in Japan, where Japan's largest mobile operator, NTT DoCoMo, got together with Japan's largest advertising agency, Dentsu, and they created D2C, the world's first pure mobile advertising agency. Japan accounted for more than half of the global advertising spend for the next 7 years and was the first country to breach the 1 Billion dollar domestic mobile advertising market level. It wasn't until the spectacular rise of Admob, coinciding with the launch of the iPhone and soon also Android, that fuelled the global explosion in mobile advertising and marketing. By the time Google bought Admob, the world was serving dozens of billions of mobile ads per month.
Then we suddenly saw a period of hypergrowth. From 2008 to 2009, during the worst economic crisis of our lifetimes, when all other media reported severe declines, mobile advertising didn't only grow - it doubled annual revenues. In the next year, to 2010, mobile advertising doubled again. The past year, 2011, mAd nearly doubled again and was worth 11.5 Billion dollars globally, according to JP Morgan. And most mobile advertising experts are talking this year of growing at nearly double-rate again! Ford, one of the biggest advertisers on the planet, said last year that mobile is so vital to their advertising, that they will always make mobile part of any ad campaign they run in any media. So if Ford runs a TV campaign, or an outdoor billboard campaign, or a cross-media campaign on radio and print - it will always include mobile. And does the advertising industry believe in mobile? Maurice Levy, the CEO of Publicis the second biggest media empire in the world said in 2006: "In a couple of years, most of the advertising you read will transit through your cell phone."
TELEVISION AND MOVIES
And I could go on and on and on, but lets focus on the big picture. So in mass media, what is the biggest picture? By screen size, that is movies, but you know, I meant by revenues and audience, it is television of course. TV came to mobile on two simultaneous innovations in the late Spring of 2001. MTV3 of Finland, the commercial TV broadcaster, created a special abbreviated news clip of highlights of tonight's news, that was served as a downloadable video clip to mobile phones. Except that there was only one phone with the screen and image processing capability at the time capable of showing that clip - the brand new Nokia 9210 Communicator. Even then, to view a 30 second clip, would take 2 and a half minutes of download on the fastest data speeds of that time, on a long since forgotten standard called HSCSD. If we think of today's 3G and 4G, and original basic GSM with SMS and WAP was 2G, this was about 2.1G. Still, it was suddenly possible - if you were filthy rich to afford that brick-sized superphone that had just started to ship - to see short highlights of tonight's TV news. That was genesis. Today's YouTube on your Samsung Galaxy S3 was just some steps of evolution away.
While video on mobile continues to spread and generate ever heavier traffic on mobile, the video viewing of television on a mobile phone has been a poor business proposition. We expect the viewing of TV to be free on our mobile phones. And even with the gargantuan screen size of the Galaxy Note, it still is a poor substitute for our plasma screen giant flat screen TVs at home. But there was another television innovation as well, that happened also in the late Spring of 2001. In Britain, MTV the Music Video channel (no relation to MTV3 of Finland) launched a revolutionary TV show called videoclash. The TV show offered the choice of two videos of similar music style and asked the audience to vote which video should be shown. Vote how? By.... SMS
Television voting by mobile was invented. Soon we had Pop Idols and American Idols and Eurovision Song Contests and China Idols and then all other sorts of TV shows got into the SMS voting and gaming action, from Who Wants to be a Millionaire to Deal or No Deal. The 2010 run of American Idol alone generated 100 million dollars of revenues out of SMS voting. The SMS voting services business is worth several Billion dollars worldwide today.
Then we have the whole phenomenon of citizen journalism pioneered by Ohmy News of South Korea and CNN i-Report among the major global TV broacasters. And what do TV execs think of this pocket screen, the 'third screen' (if counting TV, PC and mobile) or 'fourth screen' (if adding cinema as the first screen). BBC's Director General Greg Dyke said in 2006 "The time is coming where all the traditional broadcast shows will be available on your mobile phone." Over on the other side of the planet in Asia, the CEO of South Korea's largest broadcaster KBS, Yun-Joo Jung said: "The mobile will be the main device to enjoy radio and TV programmes anytime anywhere."
And let me say just a few words about the first screen, Cinema. Yes, movies too are getting into our pockets. The early 'conventional wisdom' suggested that we don't have the patience to watch a full movie on the tiny screen. There were plenty of short film festivals that focused on mobile movies. Then Nokia launched its revolutionary N93 superphone (the 'contortionist' cameraphone/videocamera phone) with 3x optical zoom (ie 'real zoom') and TV out and DVD quality video recording. Suddenly 'professional' level video recording became possible with our cameraphone in 2006. And with TV-out, the screen size limit was busted, now you could watch the phone content on any TV screen. That phone? Shipped with a memory card that featured the full-length movie of Mission Impossible. And did we watch - and show - Tom Cruise from our pockets? Of course we did. Since then we have seen ever more awesome tech squeeze into our pockets from 3D stereoscopic cameras and 3D displays on LG smartphones, to the pico projector on Samsung's Galaxy Beam, to the fully professional HD video recording capability of the Nokia N8 - the first mobile phone to be used by a professional cinematographer, to shoot a full-length commercially launched movie, totally on the cameraphone. Yes. You can use a modern cameraphone to actually shoot a full-length commercial Hollywood movie. So now, what do we think the movie moguls say? Sony Movies said already back in 2006 that full-length movies on our mobile phones will become commonplace. Meanwhile Robert Redford the Hollywood actor and director discussed mobile phone movies at the 2008 Sundance Film Festival, explaining that "to design for short form small screen media, takes more discipline."
HOW BIG IS BIG?
So Strategy Analytics just reported in April, that mobile media will be worth 149.8 Billion dollars this year, 2012. So lets round it off to 150 Billion dollars. That is the result of only 14 years of mobile content. This is the fastest-growing media of all time. And lets put it in context. Recordings? The recorded music industry is worth less than 30 Billion dollars annually. And it is over 100 years old as an industry. In one seventh of the time, mobile has already grown to be 5 times bigger. So take all the music produced and sold from Lady Gaga and Shakira to Rolling Stones and Elvis, and toss in all classical music, all Bollywood songs etc, and take all global music combined - and multply that then by 5. That is mobile media today.
Or gaming? The videogaming industry started in 1972 with the original Pong by Atari in the arcade games, and Magnavox in the same year as the first home console videogame. The videogaming industry is today 40 years of age. And its grown very strongly, it is bigger than music. The global videogaming industry, both gaming revenues, and gaming console sales, combined, is worth about 40 Billion dollars. Achieved in 4 decades. Mobile in one third the time, has grown to be over three times bigger.
What of movies? Cinema is about 120 years of age today. Most obviously thought of as James Bond, Batman and other franchises with various Bratt Pitt, George Clooney and Angelina Jolie movies from Hollywood, there also is a huge movie industry in Bombay, called Bollywood, and another similar-sized movie juggernaut from Nigeria, called Nollywood. Add to that the domestic giant movie industries from Russia to Brazil and from China to New Zealand, and we have the global cinema industry. Its box office revenues are not growing, but the after-sales, from DVD sales to various other formats and licenses like television rights etc, give a total industry size of about 50 Billion dollars. Yes. Movies are 8 times older than mobile, yet mobile media is three times bigger already, by revenues.
I could go on and on. But just to summarize. Radio? Worth about 100 Billion in global revenues - mobile is already bigger. The only two major mass media left for mobile to reach and pass, are print and television, which mobile will easily pass during this decade in revenues.
So that was media, a topic I wrote a bestselling book about in 2008, called Mobile as the 7th of the Mass Media. What of other industries? I have been collecting a series of 15 major global industries that I see heading to a digital convergence space. That includes several media I already mentioned in the above, but adds some smaller but still meaninful industries like the wristwatch and clock industry and the compass and navigation industry (Nokia is already the world's most used clock brand, with 5 times more users than Timex, the only wristwatch to pass 1 Billion watches manufactured over its lifetime - that took 50 years by the way. Nokia sells another 1 Billion mobile phone handsets with an inbuilt clock, every three years - and Nokia is also today the world's largest navigation and mapping company). But these are 'small potatoes' so to speak. Lets mention a few other giants.
The PC industry is headed to mobile. While many laughed at Nokia when they started to call their 'smartphones' the N-Series 'multimedia computers' back in 2005, nobody is laughing anymore when we look at the latest iPhone 4S or Samsung Galaxy S3, these are very clearly powerful pocket computers. In fact, every one of the six largest traditional PC makers has said recently that yes, a smarphone is a computer. HP said so, Dell said so, Acer said so, Lenovo said so, Toshiba said so and yes, Apple is so convinced the future of the company is mobile, it dropped the word 'Computer' from its formal name. Did you notice that? Yes, when Apple first introduced the iPhone in 2007, at that time Apple Computer Corporation changed its name to just Apple Corporation and today Apple calls itself 'a mobile company'.
Yet who of the major computer and tech analysts reports yet combined smartphones + computers industry metrics? This is no longer subject to argument? So who was the one who created the world's first chart of the biggest computer makers, when adding traditional mainframes, all types of PCs from desktops to laptops, and smartphones - added together. It had to be.. me. I did that for you on this blog for the first time in 2008. (and I was crucified for making that chart and daring to suggest smartphones were real computers, haha). And for those curious, here is the latest chart for 2011.
What of money? I say banking, credit cards and even insurance is headed to a pocket near you. That may seem a bit far-fetched and a few years ago we heard major banking and credit card companies say very confidently that plastic was never going to die. Not anymore. Did you hear what Visa said last year? Visa, the first of the major global financial industry giants made its position clear, stating the future of money is mobile. Not portable or plastic or contactless, no, mobile money as in mobile phones. And then there are the governments. Kenya is rushing to the awesome milestone where half of its total GDP - yes its total national economy - will transit a mobile phone. They started mobile money only 5 years ago and this spring, 2012, already 40% of Kenya's GDP was transiting mobile phones according to Chetan Sharma Consulting. The 50% level will be met within a year, possibly as early as end of this year.
This is another once-in-a-lifetime memory, when I was invited by my long-time reference customer Vodafone to deliver the keynote to their first global Mobile Advertising Conference, which just happened to be held at.. The McLaren Center !! Yes, we also got as a bonus, a tour of the McLaren Center. This is Lewis Hamilton's car in the foreground.
Kenya's first mobile payment solution was M-Pesa by Safaricom the Vodafone affiliate. The team that created M-Pesa won the Economic award and one of that team was my dear friend Susie Lonie - we go back more than a decade, Susie and I were both presenting to the world's first mobile commerce conference in London back in 2001. Today Vodafone is spreading the M-Pesa solution to many of its markets from South Africa to India.
Hey, have a guess who invented mobile money? No, not Nokia. No, not Elisa. No, not NTT DoCoMo either. No, in fact none of the classic tech companies. The invention of using mobile to make payments was invented by... Coca Cola in 1998 with their first two vending machines that accepted payment through.. premium SMS. This had to happen in Finland, obviously. One of those two vending machines was at the Helsinki airport, the other, in Otaniemi suburb of Espoo just next to Helsinki, and yes, that is exactly where Nokia HQ is located (and I had my office at the time, when I ran Nokia's Consulting Department). by my fourth book, Communities Dominate Brands, I was privileged to have Coca Cola Chief Marketing Officer Stephen Jones write the foreword. So that was the start. Now where are we headed with this crazy idea of making payments with mobile and using mobile money?
So now its a race of which country eliminates cash first. Sweden was the first national government to start the deliberations of how to eliminate the manufacturing of cash - led in part by the founders of Abba the pop music band, who are lobbying Swedish government officials to eliminate cash for all the dirt and bacteria that paper money and coins attract. The race is on for which country eliminates cash first. Somaliland is in the race as is Estonia as is the Philippines. Japan and South Korea are in the race as is Finland and Norway. But the first country to issue a target date - is Turkey, who say boldly they intend to phase out printing cash in the year 2025. Yes. Only 13 years from now, perhaps the first country takes the step of the elimination of cash. What a milestone, that we all will witness in our lifetimes. Think about it. Cash (initially coins) has been around for 2,800 years! The first standardized metal coins for currency were minted in Lydia, a nation that existed in what is present-day Turkey. How poetically just it would be, if Turkey also becomes the first country to move us beyond cash!
Thirteen years is nothing in tech. Thirteen years ago, year 1999, was when we first got infected with Harry Potter fever and the youngest among us caught Pokemon fever. It was a year when Venus Williams won in tennis and Lance Armstrong in the Tour de France. Ricky Martin sang of Living La Vida Loca, while in the movies we all were amazed by the Matrix, and somewhat disappointed by Star Wars 1: the Phantom Menace. That was almost 'yesterday' and in as little time - you and I will witness the elimination of cash as a payment currency, gradually, from one country to the next. And don't think your nation is immune. In the Netherlands the local retailers are already lobbying the goverment to stop forcing them to accept Euro cash payments, while in Sweden, the labor unions are supporting the end of cash to help many manual labor workers from being robbed for their cash, like bus drivers used to be (Sweden followed the Estonian example of eliminating some cash-related crime by simply outlawing cash payments in a given industry. In Estonia it was parking meters, in Sweden next, it was bus drivers).
So yes. For 140 GENERATIONS there has existed cash. When you and I were born, nobody in their right mind thought cash would end. Yet, in only 13 years, we will be witnessing the end of cash, and that too, will be accomplished by.. our trusty mobile!
So that brings us to retail. What is commerce and retail like, when all consumers pay with mobile phones, rather than plastic or cash? For one thing, it means advertising changes totally, obviously. In Japan today, one in six Japanese consumers alive, has already opted in to mobile coupons and offers from McDonald's. Yes, one in six Japanese citizens alive. And do they ignore those ads on their 'keitais' (Keitai is mobile phone in Japanese) - no. HALF of the Japanese McDonalds registered recipients of mobile ads, redeem those coupons regularly, according to latest Infinita stats in 2011.
And then the power of mobile. We heard from Google last year that the shopping-savvy and price-conscious smart consumers in Hong Kong are already consulting their smartphones before they make purchases in retail shops in the world's largest shopping mall which is the city of Hong Kong. Is that an anomaly? ComScore measured the numbers for the US smartphone users in October of 2011 and found that 52% of US smartphone owners had changed their minds in a store, based on something they found on their mobiles. And now in 2012, a Deloitte study of UK smartphone owners finds almost the same level, 48% of British consumers have changed their minds because of what they found on their smartphones. So Asia, Europe and North America - I think its a safe bet to say, this is a human need, this is not a bizarre freak of some overly mobile-obsessed youth users...
This picture is from the Think Mobile! event series that Google ran where I did keynotes for them here in Asia. See how QR codes can be used even in clothing to help connect to the mobile internet.
But if you are in retail, where is your mobile strategy? Did you know that optimizing your website for mobile will increase its effectiveness in actual commerce? Did you know that 10% of the global population already uses QR codes, as we found out from the TNS survey this spring? QR codes were first launched in Japan and South Korea, where they are used by 6 in ten, and 4 in ten consumers already. But in Singapore a third of consumers already use QR codes, and a quarter of British and Canadian consumers. Do you have QR codes on your marketing materials (and on your business card, and on your personal CV/resume?). If you don't do QR codes, you are as obsolete in today's mobile media, as a 'high tech' company a decade ago that didn't have a website or email address. Do you want me to communicate with you via Fax or Carrier Pidgeon perhaps? I was just speaking at Guatemala's annual advertising industry award gala, and I was very pleased to find how many of the business cards I received had a QR code on it - even in Latin America overall, TNS finds that one in 8 people already use QR codes.
THE NITTY GRITTY OF THE BIGGEST NUMBER EVER
There has never been an industry this overpowering and pervasive - and disruptive. Let me give some final thoughts here. The total subscriber count yes, reaches 7.1 Billion ie the same number as humans alive, within anything between 3 months from now, and 6 months from now. That does not mean every human actually has a mobile phone, obviously. A Two-year-old will not have his or her personal iPhone, although, a 2-year-old is old enough to actually learn to play basic games on an iPhone. And the scary numbers, Westcoastcloud in the UK surveyed families in 2011 and found that 1 in 10 children under the age of 4 have a mobile phone! And while those are not iPhones, not even used old iPhones, yes, still 1 in 9 UK children under the age of .. NINE .. has his or her own iPhone. (I would suggest, those are essentially all second-hand iPhones, the parents giving their old iPhone 2G or iPhone 3G to the child, while upgrading to a newer iPhone 4S etc).
So the real numbers. This is the split at the end of 2012:
7.1 Billion human beings alive
7.1 Billion mobile phone subscriptions
- of those, 5.5% are 'M2M subscriptions' according to Cisco, so 390 million are not used by humans, but rather are various metering and remote control systems, like for example the Nano Ganesh farming irrigation systems I talked about that won an award at the mBillionth Awards in India three weeks ago. So the total number of human being subscriptions out of the total is about 6.7 Billion.
The number of Unique Mobile Users will be about 4.3 Billion. That is 60% of all humans alive, when we eliminate multiple subscriptions and M2M accounts.
- out of those, 44% will have at least 2 active mobile accounts
- and 11% of people who have a mobile will have at least 3 mobile accounts
thus only 56% of us are anymore satisfied with only one mobile account.
If you are measuring media reach, you should not use the 7.1 Billion number, as those M2M connections will never use your media. Then use the 6.7 Billion number, because many of us will be willing to consume media across different accounts and phones.
If you want to find your unique audience, however, it is only 4.3 Billion, and thus this industry will now over-estimate and over-state the true size of the industry by reach, by as much as 65%. Don't be misled by the hype, no matter how good it makes us all feel about this industry.
And if you are in the handsets side, or if the handset type has meaning to your business (iPhones vs Androids vs Blackberries etc..) then the number of handsets in use is about 5.8 Billion. Yes. 5.8 Billion handsets in use, is the number. About 1.2 Billion of those or 21% will be smartphones (but most smartphones still in 2012 will not look like iPhones or Galaxies, only 400 million will be touch-screen type smartphones, said Deloitte this year.
Here the table for you (preliminary numbers, I will give final numbers in February 2013):
MOBILE TECH NUMBERS END OF 2012
7.1 Billion Human Beings Alive on Planet
7.1 Billion mobile phone subscriptions in use
6.7 Billion mobile phone subscriptions used by humans including multiple subscriptions
5.8 Billion mobile phone handsets in use including consumers with 2 phones
4.3 Billion unique mobile users on plant
2.4 Billion second and third accounts by mobile users
1.2 Billion smartphones in use
Source: TomiAhonen Consulting August 2012, TomiAhonen Mobile Forecast 2012-2015
This data may be freely shared
COMPARISON NUMBERS OTHER RELATED TECH END OF 2012
7.1 Billion Human Beings Alive on Planet
7.1 Billion mobile phone subscriptions in use (includes multiple subscriptions)
5.8 Billion mobile handsets in use (21% smartphones, rest 'dumbphones' most of which also can do mobile internet, and SMS, MMS etc basic data services)
4.3 Billion unique mobile users
4.1 Billion FM radio receivers in use (includes multiple radio sets by same owner)
2.4 Billion Internet users (includes PC based, mobile based, and use of shared internet such as internet cafe)
1.9 Billion TV sets in use (includes multiple TV sets by same owner)
1.3 Billion PCs of any kind in use (includes multiple ownership of PCs, tablets, laptops etc)
1.2 Billion smartphones in use (includes multiple ownership)
1.1 Billion fixed landline telephones
Source: TomiAhonen Consulting August 2012, TomiAhonen Mobile Forecast 2012-2015
This data may be freely shared
So that is our industry. The Mobile Moment is almost at hand. Please do celebrate it wherever you speak or write or blog or Tweet about mobile. Lets monitor the big analyst houses who will start to report on this statistic soon, and the various international organizations from the ITU and World Bank and UN on down. And let me end with yet another bit of weirdness. If you are thinking this growth will also start to end soon, that after all, we only have to hands, how many conversations can one person carry on at the same time - I have some news for you.
Lets first ignore the second, third and fourth subscription for the humans. Yes, we have the Blackberry from work, and use the iPhone for personal stuff, and suddenly have fallen in love with our new tablet - thats three cellular connections and mobile subscriptions already there, for many white collar work, employed young adults.
Lets move beyond the humans and the electricity meters and irrigation systems. What of our pets? I have written about the Bowlingual dog collar that interprets dog sounds accurately translating them to SMS. Why is the dog barking? Is it a cat, or is the dog hungry, or does the dog need to go for a walk, or is there a burglar behind our door? And the hunting dog location-based sound-sensitive collar, by which a smartphone owner can monitor where his hunting dog is tracking the prey, and what the dog is hearing.. Yes, pets. Then I told about the cow, Bessie the cow was the first farmyard animal connected to the mobile network, in Canada ten years ago. Now we have actual farm management systems by which cows can be remotely monitored, including anything up to things such as bovine health - when the cow has gone into labor and will soon deliver us a baby cow. Monitored via mobile.
Those are live animals yes, what of other live things? Plants? Agrihouse in Japan introduced the first potted plant SMS alerts, sending the household owner an alert, whenever your precious plant is thirsty and needs to be watered. I am not kidding. And what of those perennially mobile and wandering things - trees. Trees! TREES! With ROOTS that force them to stay in place all their life. Trees have no need for mobile, to telephone other trees, or surf the Playboy-for-Trees pages to look at naked pictures of young sexy trees? No. Trees have no need for mobile. Think again. In Scandinavia the tree management industry uses GPS and GSM tags to mark trees that will be felled, and then monitor their last journey, when the tree is trucked to up to five different saw mills to process intelligently the different parts of that tree, some heading into a tennis racket, another part into some Ikea furniture, yet other parts going to newspaper pulp, etc. They use mobile connections for TREES !!!!! The least mobile of any living things imaginable.
Coming back to humans. Those under-two-year-olds? We now have a company, Exmobaby, that manufactures baby pants for toddlers, that has a sensor to see when the baby diapers need to be changed. Yes. We are not limited in this industry by talking age kids, no, even babies can be connected to mobile. And what of when we die? Japan was the first nation to do cemetaries where they post QR codes on the gravestone, so when you visit Grandpa's grave, you can use your phone to link to the memorial pages, see Grandpa's life, his war medals, his wedding pictures, etc. You can leave your thoughts and prayers, and obviously tell Grandma, that you've visited at Grandpa's grave and you miss him.. Yes, mobile can help us even kind of connect with the dearly departed. When I was in Guatemala I just learned that they have added the obituaries services usually on newspapers to the mobile internet, so we can now send greetings via mobile to funeral services, if we can't attend in person, and read the various notices, prayers and memorials.
And what of our animals. I just read on Twitter last week that there is a Swiss company that has figured out how to measure the emotional states of sheep. Yes, sheep, those woolly animals that flock and are pretty meek. They are hunted by wolves. In Switzerland they have now been able to monitor the sheep heart rate and other body functions, to detect when the sheep is frightened. A sheep will get frightened primarily if it has seen a wolf! I kid you not. Yes, we have now Sheep-to-human conversion, via SMS, where frightened sheep will accurately automatically send SMS alerts to the sheep farmer, to call him or her to help, if there is wolf threatening the herd. Isn't this amazing?
And last, if you think alive humans, their technical gadget remote controls, their household pets and farmyard animals, and even plants from flowers to trees, is the limit, think again. Virtual beings.
Artificial Life was the first company to deploy the mobile virtual girl friend or boy friend to mobile phones, early in the past decade. They were at one point the most downloaded paid game, with 4 million downloads (this was in the era before Angry Birds, when a million downloads was awesome in the early mobile internet). But that virtual girlfriend, a virtual being, was yes, sending SMS to you, if she felt bored or neglected. You pay for her, she starts to add SMS traffic - that you have to pay for. What is this?
Fast forward that to Japan today. The Honda motorcycle K-Tra fan club in Japan has tens of thousands of virtual avatars of the humans. If you are a fan of Honda motorcycles, or a Honda owner - you can create your Avatar, which can then go on virtual hitch-hiking tours of Japan, on your behalf. Having an adventure in Japan, riding with real Honda motorcycle owners. And what? YES !!! These virtual avatars, your virtual alter-egos, yes, are having an adventure and of course, they send messages to you, to let you know how great that adventure is. We have not even started on this part of the journey, when reality meets virtual - via mobile. No wonder Eric Schmidt of Google keeps telling Google's strategic partners and anyone willing to listen: "put your best people on mobile."
But I end this blog article here, at the edge of reality. Yes the Mobile Moment is upon us. We will be witnessing technology history being made. We will celebrate it globally. It is an astonishing milestone. And then starts the gradual decline of many established industries and technologies. Do we really need wristwatches, landline phones, GPS receivers, desktop PCs, music players, gaming consoles, coins and cash, credit cards? At what point will our passport and drivers' licence be only a file stored on our smartphone, that we can flash to policemen or at security checks at airports, and it will be accepted as real ID? That day is coming soon. Enjoy mobile! This is the biggest economic opportunity of our lifetimes and the most disruptive technology that has ever been created.
I keep spreading the story and digging deeper. This is me in South Africa last year still peddling stories about how mobile is growing fast and spreading and we need to study it more (credit to Jonathan 'JMac' MacDonald for the great picture). My hair keeps getting more grey but the story keeps fresh and I love my job telling stories about mobile to audiences on all six inhabited continents. If you or your company needs a seminar, workshop or private strategy session on this industry, how to get into it, how to succeed in it, or how to use it for your gain, please do get in touch with me, I am here only to help.
Oh, if you want to underestand mobile a bit more, I have two freebies for you, and if you are really serious about mobile, one paid item too. First, if you are new to mobile, then go download my 350 page free ebook (we made my 10th book free, the other 11 are paid books, thank you for buying my books and giving me this wonderful mobile lifestyle). The Insider's Guide to Mobile is here. And if you want more stats and numbers, get the 2010 edition of my TomiAhonen Almanac, also free, here. My other paid books and ebooks are here if you are interested in more.
If you are more serious about mobile, see it is essential to your future, and want to get ahead of your rivals, why not buy the forecast to 110 data points across the next few years, see my TomiAhonen Mobile Forecast 2012-2015 - your best guide to the near future of this industry, and your opportunities in it