What happens when majority access web via mobile phone

UPDATE JANUARY 2007 - I have written a follow-up on this, about how content migratest from lecacy PC web to mobile internet

Spotted a telling statistic by Ipsos Research, who reported that at the end of 2005 a total of 28% of all mobile phone users access the internet with their phones. Across the 2.1 billion mobile phone users, that works out to 588 million users. And obviously across the 1 billion internet users at the end of 2005, that means that almost 59% of internet users access the web via cellphone.

First very significant point to keep in mind, is that a large portion of those users have also a PC (desktop or laptop) and access the web also with their PC. Earlier numbers had revealed that of paid subscribers to the internet, 25% was by mobile phone or in other words, 250 million people use the mobile phone as their primary (or only) method to access the web.

So to explain - 250 million access only by mobile phone. 412 million access only by PC (desktop or laptop). And thus 338 million use both PC and mobile phone for web access.

So far so good. Now lets observe the trends. PC based internet access is a little over 12 years old as a mass market proposition and in 2005 PC based internet access growth was dramatically slowing down. Mobile phone based internet access is only six years old and showing remarkable growth. With new smartphones, colour screens, faster access speeds of 2.5G and 3G, and web services customized for the fourth screen, mobile phone based internet is becoming a very compelling offering.

Growth of the PC based internet is slowing down. Growth of the mobile phone based internet is accelerating. Only 41% of all internet access is by people who only access by PC. Already 25% of all internet access is only by mobile phone. Soon more people will access by mobile than PC. How soon? By 2008.

What will this mean to the internet industry? The mobile phone can replicate all services that the traditional PC based internet can do. Yes, the screen is smaller, but that is no absolute obstacle. But everything else we had on the web, including its interactivity, is also available on the mobile phone.

But an internet on the mobile phone delivers four elements that don't exist on the fixed internet. First of all, a mobile phone based internet is totally personalized. Our PC is often shared - such as a university campus computer, or a family computer, or the PC owned by the employer with its limitations and at times access by the IT department etc. But our mobile phone is totally personal.

Secondly the mobile phone is always on. It means that any alerts, urgent news etc can be delivered. With laptops we need to find our access, connect to a WiFi etc network, but mobile phones are always connected and can for example be reached via SMS text messaging for alerts at any time.

Thirdly the mobile phone is always within hand's reach of its users. No other technology is so close to us physically at all times. We don't take our computers to bed with us (well, most don't do that), but over 60% of all mobile phone users take their cellphone physically to bed with them at night. We notice we've lost our wallet in 26 hours. But we notice we're missing our mobile phone in 68 minutes.

Finally - and most importantly - the mobile phone offers a built-in payment mechanism. The PC based internet does not have that. On the traditional internet we need to set up a payment system like Paypal, or we need to submit credit card info etc. But on the mobile phone we can (if our carrier/operator has enabled it) handle any payments at the click of a button.

And for anyone who thinks the lower cost new PCs might reverse the trend. No that won't happen. PCs are paid full price. But in most markets mobile phones are subsidised. While PCs are replaced every 3.5 years, mobile phones are replaced every 21 months. In markets where people have two phones - 20% of Europeans have two phones already - that results in an effective replacement rate of 11.5 months for mobile phones. A new phone every year but a new PC once every four years. The mobile phone is subsidised and nearly "free" while the new laptop still costs something near 1000 dollars. How many times will we bother to replace the laptop, especially when our mobile phone suddenly can do all the internet stuff that we previously needed a PC for?

So returning to my question. What happens when the majority of internet access is done with a mobile phone? It will not take long for the Amazons, Ebays, Googles, AOLs and Yahoos to discover that their users are more accessing via mobile phone than via PC. They will adjust their content to work on the phone and optimize for the small screen rather than for the PC screen.

Sound implausible? Think again. Only 14 years ago the majority of internet access devices were mainframe computers. At that time the web content standard was something called "Gopher". Today nobody formats for Gopher because the internet PC browsers (first was Mosaic, then Netscape, now Microsoft's Internet Explorer) became the predominant access devices.

That is bound to change. The trends are irreversible. The sooner you understand this coming change, the more you can capitalize on this transition both personally, and professionally. Spot the trends now, and be one of the early visionaries to this inevitable future.

Oh, and if you work for a content provider, consider these facts: There are three times as many mobile phones as PCs. Twice as many people use SMS text messaging as use e-mail. Users on the traditional PC based internet expect content to be free, but mobile phone users expect mobile content to be paid-for. Collecting money on the traditional fixed wireline internet is very cumbersome. Collecting money on the mobile internet is built-in. The world's biggest internet company by revenues is not one of the internet darlings - Google, Yahoo, eBay, Amazon or AOL. It is Japanese mobile operator NTT DoCoMo's domestic mobile internet arm, i-Mode. And i-Mode alone makes bigger profits than the five internet darlings combined. Where will you put your best content? On the mobile internet of course.

Then consider the premise of my posting. If the majority of the users are on the mobile internet. And the best content is on the mobile internet. Shouldn't YOU be on the mobile internet?

Comments

[Uri Baruchin]

While the mobile internet will become increasingly important for the reasons you mention, i don't see it passing the PC - As long as reading text and inputting it is so central to interactive experience, mobile phones will not become a major internet access interface as they don't provide a good experience at either.

[Kent]

An awful lot of statistics spouted here, but no references...

[Tomi T Ahonen]

Hi Uri and Kent

Thank you for visiting our blogsite and posting the comments.

Uri - I've been struggling with that very same idea for a very long time - I did start my career with the first ISP in New York City, and then was with Elisa Corporation in Finland where I did the world's first fixed-mobile service bundle (combining fixed telecoms services of Helsinki Telephone and Finnet, with the mobile telecoms arm of Radiolinja); and then joined Nokia right when the world's first pocket internet device - the Nokia Communicator - was launched. I worked in the Telephony Gateways unit which did digital convergence work, and my White Paper on Indirect Access was one of the first documents to describ how the internet could be put on mobile networks. Obviously each of my four books cover this topic in greater detail.

So I hear you. I have been over that road very very many times with colleagues from my internet past, from the convergence viewpoints and those from the biggest player in mobile telecoms.

And I would agree with you, that for those adults who can afford a PC, the PC-based internet is the much-preferred option (for now).

Note this leaves two significant "buts". First, there are three times as many mobile phone users as there are PC users. Most of the world is not as wealthy as you and I, who can access the web on a PC. Most of the world is too poor and cannot afford it. For that part - definitely the poorer people of the world will form the majority also of internet users within a few years - there is no "option" of a PC. It is either "clumsy" access via a mobile phone. Or else there is no access at all.

But an even more relevant point is the inevitable turn of the tide in favour of young people. The teenagers of today grew up playing playstations, using SMS text messaging on their mobile phones. They can send out text messages with the phone held in their pockets or under the table - unseen - with no problems. This new generation will inherit the internet. They will not see a need for a clumsy big public device like a PC, once they have their own jobs and can buy the smartphone that they have always wanted for their own internet use.

So Uri, I can safely agree with you for adults in the industrialized world. But for almost all of the whole of the third world a PC is not an option. And for young people, a mobile phone keypad is no obstacle of any kind, whatsoever.

Kent - I hear you. However, Alan Moore and I tend to write about once per day, reporting on the various matters as they occur. I have all of the other stats already covered either here at this blogsite or in our book (Communities Dominate Brands) or both. Like I mentioned the source of the single new statistic relating to this posting - Ipsos Research for 21 April, 2006 - you will find just by looking back at previous postings at our blogsite, each of the other stats I mentioned. I feel I write such long posts to begin with, I will not repeat all of the old stats every time. I hope you can appreciate that. If for any reason you do not find some stat that I mentioned, please tell me which one seemed to be lost, and I will also point you to that one.

Thank you for visiting our blogsite and posting !

Tomi Ahonen :-)

[Uri Baruchin]

thanks for that enlightening comment.

[Dean Bubley]

"a total of 28% of all mobile phone users access the internet with their phones"

Actually, the stat is "28% of mobile phone owners worldwide HAVE browsed the Internet on a wireless handset" - not do so regularly.

It reminds me of a conference a year ago, when a Nokia representative stood up and said something like "70% of MMS-enabled phone users have sent a picture message". Then someone in the audience asked "Yes, but how many have sent two?"

[Tomi T Ahonen]

Hi Dean

Thanks for the comment. I will agree that there will be a delay from first use, to regular use. And yes, that point between "tried it once" and "regular user" is a very relevant one - in the short term.

If you look at the actual economics of the equation, this point becomes moot. 25% of all paid internet access today is ONLY by mobile phone. PAID internet access. That is 250 million people who pay a monthly access fee to use the web via their mobile phone. Half or more of all internet access in China, Japan and Korea, is by mobile phone ONLY.

So yes, some are trying it, and then they start to get hooked onto it. And some will find the experience difficult the first time. If they are wealthy enough - or have a PC from work etc - they can go back to the PC based internet. But the mobile phone based web is getting ever better in terms of user interface.

When the mobile phone is the predominant access method - like in Japan and Korea - then also the exclusive powers of the phone can be capitalized.

Look at the clumsy user interface of the PC keyboard. If I want to go to a given blogsite or website, I have to enter the address by the very clumsy tool of the keyboard on the PC (like typing now). Wouldn't it be a million times easier if I could use the camera on the mobile phone and point to a fuzzy image on a page and get automatically connected. Without ANY typing of any kind.

If you go to Japan or Korea and look at billboards on bus stops and of print ads in magazines, just like in our Western ads there are web addressses - www.readmyadpage.com or something like that - in Japan and Korea there are the two-dimensional bar codes (the ones that look like square-shaped fingerprints). All you do is point your phone at that barcode, and you have the entry on your phone ! No typing !

This is the kind of innovation we are now seeing as the world transitions to the web on the mobile phone. It gets better. Same for all the 15 million mobile bloggers in Korea. No longer the very clumsy process we have in the West, of picture taking on a digital camera, transferring it via USB cable to the PC, then editing it in the picture software, then connecting to our web service, sign up to movable type or typepad to access our blogsite, then upload our picture. PAINFULLY CUMBERSOME.

In Korea you just snap a picture on your 3G cameraphone, and send to CyWorld, and your picture appears on your blogsite. Simple, elegant. This is the future when the majority of internet access is via mobile phone.

Thanks for writing Dean. I also replied to your longer comments at the Vodafone related posting.

Tomi Ahonen :-)

[Linen Mania]

On a side note, the dotMobi mTLD (mobile top level domain) has just been released and is in the sunrise registration period...the promise of dotMobi is to ensure that those sites with dotMobi extension will be tuned to mobile browsing...

one can expect a number of .mobi web sites - those that conform with standards for mobile browsing - to be online starting Oct 2006

More info on dotMobi can be found at Mobinomy.com - http://www.mobinomy.com , this site also plans to start a dotMobi directory soon

Ec from Home of Home Textiles @ http://www.linens.in

[David Cushman]

Tomi, sorry to drag this one up again - as you know I'm playing catch-up in this arena.
Seems to me the biggest 'failiing' at least of current mobiles is memory. Most PCs offers 160GB+. Most mobiles have to be upgraded to offer 1GB of card memory.
So, assuming all other aspects of the model are relatively accurate, I'd expect to see a growing demand for online storage facilities accessed on the mobile internet.
Offering this may be one way in which brands will be able to draw users to their other services? What do you think - is this something anyone is doing with strategic intent?

[David Cushman]

One more update: Tomi's prediction has to have come a step closer today with 3's announcment of fixed-price mobile internet access and a tie-up with skype, orb networks, ebay, google, yahoo et al. Orb answers my own question (above)

More here: http://fasterfuture.blogspot.com/2006/11/3-accelerates-mobile-web-in-uk.html

[alan moore]

cheers David and thanks for the update.

BTW where are you based?

Thanks for posting

Alan

[David Cushman]

Hi Alan, I'm at emap automotive (and active for mobile purposes) in Peterborough (UK)

[Tomi T Ahonen]

Hi David and Alan

Thanks for the comments and update, David. Good to see your comments here at our blogsite, every time. Yes, I agree, the fact that we have massive storage in our laptops and very puny storage ability (although a decade ago a gigabyte was an impressive amount of storage for a PC) does put limits to the mobile internet. It also "tilts" the service proposition more to network based services rather than those performed on the end-user device. But so is the recent phenomenon of user-generated content at social networking sites. We upload our clips and images for all to go and see. That model of storage fits naturally for mobile phones.

About Three, wow, great move! Thanks for mentioning it. I was heavily travelling last week and didn't really have the chance to comment on it then.

Thanks for writing David! And good luck with eMap Automotive, let us know whenever you guys release services, we'll want to know and blog about it.

Tomi :-)

[el dorado]

Good article.
Thanks.

[Tomi T Ahonen]

Thanks el dorado

Tomi :-)

[aion kinah]

About Three, wow, great move! Thanks for mentioning it. I was heavily travelling last week and didn't really have the chance to comment on it then.

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