THE CAR AT 800 M
The car. Worldwide there are about 800 million registered automobiles. About a hundred years old, this innovation (the gasoline powered car is a vast improvement over its predecessor the steam-powered car) has literally altered landscapes, the way we work and live, and introduced countless huge support industries from the tyre manufacturers to petrol stations to the motel industry to service and repair garages etc.
Movies and TV have idolized the car from muscle cars anywhere from Bullitt to Starsky and Hutch and James Bond's Astons to the cheap cars such as Herbie the Luv Bug (the Beetle) and the Italian Job (Mini). For several generations a car was the ultimate aspirational gadget, what young adults would use to define their identity. It is very rare for a given person to have two or more cars (in active use) - with Hollywood and the ultrarich being the obvious exceptions. Yes, families can have more than one car, but then typically one is the father's car, the other is mother's car, etc. Note that the car also has a lot of vanity features and customization to reflect each personality starting with the vanity license plates.
TELEPHONE 1.3 B
The telephone. And I'm now only talking about the fixed landline, traditional phone. The first home phone connections were sold as serious alert services, such as fire alarms for the wealthy. The original concept of the phone never included an idea that people would use that device for idle chat. Today there are 1.3 billion fixed landline phones in the world. The telephone touched all parts of life, changing just about all of it, from teenagers flirting on the phone, to families connecting to relatives far away, to businesses employing secretaries for busy bosses, to answer their phones.
Gradually phones became customer service tools, so whole traditional commercial areas were drastically altered - going to the bank, now you call them up. Or buying airline tickets, now you call a calling centre. Need to rent a hotel room, car, call up the toll-free phone number. All these were activites we used to have to do in person, in the nearby bank office, or travel agent, etc.
TV 1.5 B
The TV. Invented before the war, but introduced to the mass market in the 1950s, today there are about 1.5 billion TV sets in use in the world. TV changed our home. The living room of today is set around the TV set, and comfortable TV chairs - or suitable reclining parts to couches/sofas are the norm in many a home. The TV transformed the mass media industries soon taking the lead of it, today dominating the media landscape, perhaps nowhere as clearly as the advent of MTV and music video was to music on radio. New industries were born from TV production houses to video rental firms to the whole 35 billion dollar videogaming industry. Old industries transformed like the advertising industry which today is almost driven by the ad spend of given TV campaigns, with the other media almost as optional extras, at least for major acounts.
TV brought aspirations as well, older generations hoped to become TV announcers or presenters at game shows etc. Young generations of today hope to become famous by being on a reality TV show. Originally TVs were intended as family devices, but today it is quite common for a young single person to have two TV sets or more (eg one in the living room, another in the bedroom), so in the industrialized world there are a growing part of the population where TV ownership exceeds given segments of the human population; I believe that shortly (if it hasn't happened already) the USA will become the first country where the absolute count of TV sets in use exceeds the per-capita population.
Televisions at 1.5 billion. Thats a big number. What we also need to understand, is that TV is often shared, especially in Asia where families are also large. So you might easily have 6 or even 10 watching the same TV show. The reach of TV is much beyond the 1.5 billion sets in use.
CREDIT CARDS 1.4 B
Credit cards came along in mostly in the 1970s. Today 1.4 billion people carry at least one card. A dramatic innovation in the use of money, there now are many forecasters in the financial world who suggest there will come a time when traditional cash will disappear totally. Credit cards changed human consumption. Now we don't have to wait to our paycheck on Friday to spend - or have to save several months to be able to afford a new plasma screen TV. We can charge it, and pay it off in installments on our credit card. Plastic money has changed so much of commercial transactions that many businesses now require it. Try renting a car or booking a hotel room with cash only.
There are some aspirational dimensions to the credit card, as for the young it is a kind of right of passage - most countries it is illegal for under 18 year olds to have credit cards - and American Express (with its Gold and Platinum etc cards) has pushed these aspirations further. There are then the affinity cards from Manchester United and NY Yankees onto the World Wildlife Foundation. Typical users of credit cards tend to have a few, so if you get one (and use it), very soon you apply for another one and may have Visa, MasterCard and American Express all, plus maybe a couple of specialist cards like one for the petrol station or your favourite department store, etc.
PC 850 M
The personal computer turned from a garage geek's gadget into a mass market device with Apple, about 1980. A lot of computers have been sold, but they also become obsolete very fast - the typical replacement cycle is now three and a half years. So the actual installed base of personal computers in use is well under the famous "billion users of the internet", at about 850 million PCs (because some of the billion internet users access via mobile phone, PDA, or via a cybercafe or campus computer at the university etc). Perhaps surprisingly to many reading our blog, the majority of those are still desktop PCs, it was only last year that worldwide more laptops were sold than desktop PCs worldwide. Still, 850 million PCs. A big number, sure, just passing past the amount of automobiles last year, but still far from say fixed landline telephones.
With the desktop PC while there is the ability for a lot of customization, there is not much identification or affinity to it; with laptops its the opposite. Not perhaps much we can really do to customize the internal (hardware) configuration of the laptop, but often - especially for younger users - the covers of the laptop get plastered with stickers etc. Ferrari even has some laptops authorized to its red colour schemes etc. Very many PC users have more than one PC, but that is because the older ones are obsolete, we tend to use only one, unless one is a work (employer) computer and the other is our personal home computer.
INTERNET 1.1 B
And while the Arpanet was developed by the US military for decades, the internet emerged into the mainstream in 1994 when it was on the covers of Business Week and Time. Very rapid growth resulted and today 1.1 billion people around the world access the internet. The internet "changed everything" according to the mantra, and truly its reach is enormous from investment banking to retail to travel to education to farms and forestry management (forest managers in Finland track every individual tree for example).
You might be tempted to think those access via a personal computer, yet already in China, Japan and South Korea the majority of internet access is via mobile phone. In total over 750 million people access internet content via a mobile phone today - most of those also have a personal computer, obviously - and yes, still today, most of these people put more of their traffic to the web via their PC than their phone, although this is changing fast. And still today, slightly more, about the total PC population or about 850 million people, access the web via a computer.
During 2007 the first cross-over will happen, with more users accessing via phone than PC. Fascinating data coming on that usage as well, the Japanese regulator reports that those who access the web via mobile phone do so more frequently than those who access via a PC. Similar data now coming from several converged (broadband and mobile phone) web services like Flirtomatic in the UK. Its no wonder Google's new CEO Eric Schmidt, says the future of the internet is mobile.
THE MINNOWS, PDA, PS2, iPOD, TiVo, DIGICAM
Then lets mention the minnows. There is a wide range of recent gadgets that are very popular with the press, but are actually minnows in the big pond of life. I am talking about the PDA, Playstation and other gaming consoles, the iPod, the TiVo box (PVR ie Sky+ box), the digital camera, and the camcorder. Adding all of these populations together will not reach a billion, so these really are small potatoes. Yes, these are fascinating, but they are trivial to the big picture in life. They do not support whole industries and while their users can be fanatical about them (the uncle who videotapes everything, or the gaming teenager).
Lets understand their scale. The total shipped PDA population is about 85 million, most which are replacements. iPod is reaching 85 million shipped (and many, probably not the majority) going as replacements so the installed base is smaller. PVRs are now appearing on many high-end DVD recorders and in digital TV boxes, but still total PVR shipments don't break 100 million. The same is true of camcorders, under 100 million total shipped (many as replacements). Gaming consoles have shipped near 200 million units, out of which 150 million are second generation (PS2/Xbox) or newer. The (stand-alone) digital camera has achieved shipments of near 300 million, quite impressive but not in the billion unit (or near) volumes of the big technologies in this blog and yes, those too, in many cases are replacements of earlier digital cameras so the total user population is much less than 300 million.
THE GOLIATH, MOBILE PHONES 2.7 B
Now we have context. 800 million cars, 850 million personal computers, 1.3 B fixed landline phones, 1.4 billion credit cards, 1.5 billion TV sets. How many mobile phones in use today? In use today, yes, 2.7 billion (technically 2.7 billion in January, not December). They sold 950 million phones last year and the total worldwide mobile subscriber base grew from 2.1 billion to 2.7 billion. Three times as many mobile phones as automobiles or personal computers. About twice as many mobile phone owners as those of fixed landline phones or credit cards. And almost twice as many mobile phones in use as TV sets.
Phones are very aspirational. We project our personalities via the interchangeable covers, various decorations, stickers, and the massive industry of ringing tones. We customize our phone services further with ringback (waiting) tones, welcoming tones and background tones. Young people assign the same kinds of value to their emerging personality, their own perceived coolness etc, through their mobile phone, like older generations did with their first car.
Phones are replaced every 18 months (and this is still shrinking). America, USA and Canada are dead last in the industrialized world, with much of the developing world passing them in phone penetration, yet even USA reached 75% penetration. That is per capita, not per household penetration as used for fixed landlines and TV sets for example. And yes, per capita means counting all babies and deaf great-grandparents, not only the adult population. The Western European average per capita penetration is already 110%, leading countries like Italy, Taiwan, Hong Kong and Israel have penetration rates at about 140% (yes this is per capita). And yes, over 100% penetration rate means that some in the population have more than one phone (and are charged for using both/all)
In the industrialized world, everybody who can talk and knows numbers, and can still hear and remember numbers - has a mobile phone. A recent story from Los Angeles tells us that a homeless person was accidentially dumped into a garbage truck, and faced being crushed. He used his cellphone - I kid you not - to call the emergency number and was rescued. When the homeless carry this technology, everybody has it.
And the non-industrialized world? Catching up really fast. China adds 6 million phones every month, India adds 7 million phones every month. Bear in mind that the total phone population in countries like Finland, Norway, Denmark and Portugal - each countries with 120% or more penetration rates - is less than 6 million units total. China and India both add that amount every month.
Africa is in a hurry to increase phone penetration after the OECD study found that increasing mobile phone penetration results in the greatest benefit to the GDP of an emerging country. Better benefit than providing computers, electricity, roads etc. You don't need a literate population to have benefits from phones, but you do need literacy for personal computers. You can use phones without electricity as the many hand-cranked battery rechargers in use in Afghanistan for example will testify.
CONTRAST THEM TO THE PHONE
But wait. The phone can't actually transport us like a car can (although all car owners around the world now have a phone in the car with them as they drive) but consider all of the other technologies mentioned. Computers? The phone is a small computer. Nokia has started to call its top-end N-Series smartphones as mobile computers, not mobile phones. In fact a typical high-end smartphone can match the performance of mid-range laptop computer only five years ago.
Internet. I already mentioned that already three countries have seen the tipping point, more people now access the web via mobile phone than via PC in China, Japan and South Korea - and obviously all internet content in those countries is formated for the small screen rather than the PC screen. This is an inevitable trend and the future of the web is definitely on mobile.
MESSAGING IS BIGGEST DATA APP ON PLANET
Consider the biggest application, messaging. On the internet there are about 1.5 billion e-mail boxes, maintained by about 800 million people. But two thirds of mobile phone users are active users of SMS text messaging. Thats 1.8 billion people texting. More than twice as many people are active users of SMS as are active users of e-mail. Even Americans are catching this - proven to be addictive - service. Last year over 42% of Americans were active in SMS already. Meanwhile a British survey found that SMS is preferred over voice calls. Not among the youth, among the whole population.
Think about that for a moment, and then re-evaluate your plans to communicate via e-mail, whether you do it for commercial reasons, advertising reasons, personal communications or business contacts. E-mail is opened in 24 hours and replied to in 48 hours. SMS is read within 15 minutes on average and responded within 60 minutes. 65% of e-mail is spam, less than 10% of SMS is spam. E-mail is so last year (or last decade actually). If this seems wild to you, remember something our bosses used to swear by, called fax? Nobody communicates by fax anymore. Soon e-mail will face the same fate, an outmoded form of slow and tedious communication that reaches so few. Voicemail? Stop using it and get with the times. The Finnish Prime Minister for example has a voicemail greeting saying he doesn't listen to voicemail, send him a text message instead.
Credit cards? Many mobile operators offer full branded credit card functionality on their phones from South Korea to Norway; in South Korea five separate credit card services are available on the three mobile networks. The biggest advantage that mobile banking and credit on phones have over credit cards, is that there is no age limit to having a phone. So a youngster may be ineligible for an actual credit card, but will usually be allowed to sign up to a pay-monthly (postpay) phone account. This functions as short-term credit, if you can pay for example at McDonald's by mobile phone as you can at all McDonald's restaurants in Slovenia for example. Eat your burger today, pay for it next month when the phone bill comes in. With credit transfers between subscribers (sending money to your phone) as invented in the Philippines six years ago, young people today have their first access to consumer credit and digital money via their mobile phone.
Imagine the near future. It exists in South Korea of course. Visa in South Korea will ask its Korean customers do they want the optional free plastic card mailed to them as well; this in case the Korean credit card user expects to travel abroad where they might need the old-fashioned plastic card for credit. In South Korea almost 100% of credit card based point-of-purchase sites accept payment via mobile phone credit (and charge) cards. Thus the locals no longer carry the plastic. Oh, and your phone can replace your keys as well, in Japan they're already building apartment buildings where door locks are operated by mobile phone.
TV? Last year was the big launch of various TV broadcast services direct to mobile phones. Yes we've had streaming and video clip download TV services for mobile for five years, but the true cable TV digital set-top boxes, inbuilt into the mobile phone - as well as video quality recording (in-built TiVo or Sky+) - into the mobile phone were introduced. Again South Korea leads. Two years from launch almost 10% of South Korean phone users watch digital broadcast TV on their phones. Meanwhile TV broadcasters and producers are discovering the mobile phone and interactivity. While Pop Idol (American Idol etc) formats have typically been the top-watched TV shows from Australia to Norway, and thus commanded top dollar in advertising revenues, the Pop Idol formats have earned a windfall of over 700 million dollars out of text messaging votes.
2.7 billion users. Every one of those can be reached via SMS text messaging. Imagine the reach of your blogsite or website. You can reach a maximum of 1.1 billion people if you use the web. But using SMS, you can reach two and a half times more people. Not to mention that SMS reaches them immediately, while they might not access the web until next week.
Oh, lets not forget the minnows. PDA? All smartphones have at least basic PDA functionalities while top smartphones like the Communicator are the most expensive PDAs on the market totally thrashing lesser PDAs in their range of full ability. Gaming consoles are converging to mobile units, from the playstation side PSP and from the phone makers starting with the now-discontinued Nokia N-Gage. The world's most played videogame? Snake. iPod? Last year sold under 45 million iPods. But last year sold over 300 million musicphones. I will return to this topic when Apple release its final numbers for the Christmas season, in about a week, but yes, that battle is totally over, with musicphones outselling iPods at more than 7 to one. And yes, many many surveys find that people are using their musicphones to listen to MP3 songs and to buy music directly to their musicphones. But yes, more of that in a separate blog soon.
The TiVo box ie PVR/DVR/HDD (Personal Video Recorder/Digital Video Recorder/Hard Disk Drive videorecorder) like Sky+. First phones appeared last year in South Korea with built-in PVR functionality and now are becoming a standard feature on TV-phones. The digicam? My new Nokia N-93 has Carl Zeiss optics and optical zoom, better than many mid-range snapshot stand-alone digital cameras. In 2005 already half of all phones sold were cameraphones so cameraphones outsell digital cameras by more than 4 to 1 and for the vast majority of the planet, not their primary digital camera, not their primary camera of any type, but their only camera is their new cameraphone. Mainstream top end cameraphones now feature 3 megapixel resolutions while the top-end Samsung has a 10 megapixel resolution. And for the video camera. The amateour mass-market digicam is now the cameraphone. We see it daily, just now with Saddam Hussein's hanging, something is caught on video. Not by videocam, but on a cameraphone. For the minnows, the big shark gobbling them all up without much even trying, is the mobile phone.
WHAT OF RADIO
Tomi you skipped radio. Yes I did. There are more radios in use than there are mobile phones, although that time will come around 2008-2009 when this last champion will be also crushed. I've seen recent radio stats of anywhere from 3.2 Billion to 3.8 Billion. The problem with radios is that they "cluster" with a few users, particularly Americans and Europeans. We have dozens of radios. There is one in the HiFi at home, another in the boom box. A third in the car. A fourth in the kitchen clock. A fifth in the bedroom clock-radio. Some of our phones, walkmans, TVs etc have built-in radios. They now sell digital radios for us, many have smaller portables and many variants of still functional older versions of all of the above.
But outside of the industrialized world, radios are rare, barely more prevalent than TV sets. So in terms of the number of users, worldwide, there are less than 2 billion people who have a radio. But out of those, the 700 million Americans and Europeans then have something like three radios each on average. Very many of the radios go unused. Many of us don't listen to radio (voluntarily, so ignoring the radio that may play in the taxi cab for example). And while we may switch from the kitchen radio in the morning to the car radio on our way to work, etc., we don't listen to more than one radio at any one time (typically). And for the young, this has all but been replaced by MTV and other music video sources.
Oh, PS, yes, many phones today ship with built-in FM radios, digital radio is coming next to a phone near you. And you can access hundreds of streaming web-radio services on your mobile phone.
And if anyone mentioned the wristwatch? You must be an old fogie. 73% of the population now uses the mobile phone as their portable clock. Not all of those have abandoned their wristwatch, but look at the under 30 year olds around you, more than not, they don't have watches anymore. That is why Seiko and Casio are rushing SMS-alert watches to recapture this segment of a market slipping away.
SO HERE IS THE BIG PICTURE
2.7 Billion phones in active use. There is a subscription for 40% of the planet's population. Maybe 10% of those are multiple subscriptions (in Europe and Industrialized Asia mostly) so perhaps 2.4 Billion people or 36% of the planet's population actually carry at least one phone.
During 2006 they sold about 950 million mobile phones. More phones sold last year than the total installed base of personal computers in use. Out of the 950 phones sold last year, two in three had built-in cameras, 30% had MP3 players. Four out of five had colour screens. All 950 million could access the web (at least via WAP), and all 950 million could send and receive SMS text messages. Over two in three were high speed (at least GPRS/EDGE/CDMA2000 1xRTT); while one in five phones sold last year was a 3G phone.
WHERE IS THE MONEY
The mobile telecoms industry earned 725 Billion dollars last year. 135 Billion of that was mobile data revenues (the majority of which is SMS text messaging but over 45 billion dollars was mobile content revenues). The mobile data industry is rapidly cannibalizing other industries - global music industry earns 16% of its revenues from mobile phones (mostly ringing tones); videogaming earns 14% of its global revenues from mobile.
By far the biggest business opportunity of our lifetimes, the mobile telecoms industry grew by 16.8% last year - many times the rate of global GDP growth, but the sheer economics of these numbers mask enormous success. The growth in dollar terms, from 2005 to 2006, was 105 billion dollars. Yes you read it right. The growth alone last year made new money for the industry worth 105 billion. Why were you not in, sharing in that enormous growth pie? This is not hype-money of investor hopes. This is real revenues, billed to customers, faitfully paid. Honest dollars. A 725 Billion dollar industry which grew by over 100 Billion. Before the decade is over, mobile telecoms will be bigger than the global automobile industry, or the global armaments industry, or the worldwide airplane manufacturing business. And yes, mobile telecoms service business, not counting handsets sold or networks, is already twice as big as the global IT (computer-side, not counting telecoms) industry.
Data service revenues in mobile (so if we ignore the phone as a voice device, and only consider the data services side of this gadget), at 135 billion dollars in 2006, are as big as - the total internet content industry, plus the internet advertising revenues, plus the global videogaming revenues, plus hollywood box office revenues worldwide, plus the global music industry, combined.
Remember the car? Before the car there was no Motel 6, no Exxon/Esso. Think of how much the fixed landline phone and TV changed the way we work and play, and how many new industries they spawned or changed. Think of the credit card, PC and the internet, how radically our world today changed. And how much money could be made from anyone from the guy manufacturing leather wallets (credit card slots were not in wallets in the 1960s) to the coffee shop manager (witness Starbucks and laptop users).
The phone is bigger in its reach than the car, TV or internet. It will make bigger changes in the next decade than any of these did. The phone adds the combined utility of the fixed telephone, internet, computer, credit card, and TV. The phone will impact your life in more ways than we can imagine, because of its multi-functionality aspect, and its reach. And because it will cannibalize some or all out of every other pretender on this list except the car. But even for the car, how many unnecessary trips have been cancelled, or the driver re-routed when we were able to reach the driver on the cellphone in the car. Honey, could you stop by and pick up Mary on your way...
Whatever your business or interest, going mobile now will give you a competitive advantage. But going mobile next year will be a desperation move to stay in the game.
Don't miss out on this. Mobile is the biggest opportunity going. Where is your business? Where is your mobile strategy? Talk to Alan or me if you'd like some assistance in finding your place, opportunity or market space (oh, and you can get a rapid start by reading our book).
FREE INFORMATION - for those who would like to understand the basics of the mobile telecoms industry, its current size, replacement cycles, second subscriptions, mobile content revenues, SMS texting usage etc, I have written a concise 2 page Thought Piece on Size of Mobile Industry. Send me an e-mail to tomi at tomiahonen dot com and I'll send it to you for free.
UPDATE 5 - I've added the updates to where these numbers will go during 2007 and a rough time-table of when you can expect to see 3 billion subscribers, 100 billion in SMS texting revenues etc. See it here: Coming to a Headline Near You
UPDATE 4 - We now have official verification in April 2007 of this finding (the 2.7B number) by the trusted source of telecoms subscriber data, Informa. Please see this posting 2.7 Billion now verified by Informa
UPDATE 3 - I've added now my latest thoughts on how powerful Mobile will become as the 7th Mass Media. Not the dumb little brother of the internet, but rather mobile to the internet is as superior as TV is to radio. Read it at Mobile as the 7th Mass Media
UPDATE 2 - I have developed my thinking about how content migrates from the lecacy (fixed PC based) internet to the mobile internet. The latest installment of that thinking is here: As Web Content Migrates to the Mobile Internet
UPDATE 1 - Since I wrote this blog entry, Apple released its iPhone. If you'd like to read a handicapping of how that "new entrant" will fare in this cut-throat market, please read the blog, Handicapping the Race: iPhone markets and rivals.
UDATE Dec 10 2008 - I've just published my annual statistical review about the overall size of the mobile industry for end-of-year 2008. All new numbers so if you are interested in the "big picture", you may want to read this blog entitled Trillion with a T: Newest Giant Industry is Mobile
NOTE - that blog covers all of the topics in this, older blog posting, so unless you want to read about the history of mobile, I suggest you hop over to the newer blog where the current numbers are discussed.
nice article ;)
Posted by: free mobile resources | January 08, 2007 at 09:19 AM
Outstanding essay, and one that will be liberally quoted by thousands for years. Congratulations.
As a fellow writer I’m curious, how long did it take to preare?
Regards
Jon Peddie
Posted by: jon peddie | January 08, 2007 at 09:24 PM
Great article Tomi
Only thing I'm not at all convinced by is your estimate of 750m people accessing Internet content by phone, nor that the "the majority of internet access is via mobile phone" in China, Japan & Korea. Majority as measured how? Pages viewed, hours of use, # of times used per month, bytes or pixels consumed, $ of goods/content bought? Are you including walled-garden content? This figure also implies a very substantial # of prepay users are regularly accessing the Internet on mobile, which seems counter-intuitive.
I've yet to see a survey compiled from an analysis of website logs which suggests that any more than a tiny fraction of pages are delivered to browsers other than PC-based IE or Firefox/Mozilla-type. There's a small sliver of Opera, although that could also be PC or even settop box based, but mobile must be in "other". Sure, quite a lot of access is via WAP, but even so, I still doubt that it's a particular meaningful proportion of total usage, outside of Japan.
Amusing fax anecdote: I finally had to buy a fax last year, as it was the only way a lot of clients (in the tech industry, including some mega-corps) would do business with me. In fact, I needed to send a legal document to a huge mobile organisation last week. The only options: fax or courier.....
Posted by: Dean Bubley | January 09, 2007 at 12:10 AM
Dean you luddite...
Nice to see you here as always. On the Korea, Japan and China more than half users on mobile, these all from official figures. Its not usage, it is users. We know each of these have relatively low PC penetration rates, so for most who want to access web content, the phone is the only device. Also there is obviously a great mid-ground of users who have both a PC and a cellphone for web access.
And on the 750 M users, yes I am counting walled garden usage, obviously, as most operators are still walled gardens. But if you access Google or Yahoo on your home PC via broadband, or your laptop and a WiFi connection, or your smartphone and a mobile operator (on its portal, part of a walled garden) it is still web access to Google or Yahoo.
The usage is different, but on that too, like I said, the Japanese telecoms regulator just reported late last year that users on mobile internet are more active than users who access via web. Japan has the most advanced mobile internet ecosystem, obviously, from the launch of i-Mode (and its copycats by the other operators), so all internet content that exists in Japanese, is available on mobile, and is formatted primarily for the small screen. China and South Korea have modelled much of their mobile internet - including the generous revenue-sharing etc - on Japan.
Also - you make a very valid point on the usage. I totally agree. There are four separate transitions which will happen at different points, from the PC based internet to the mobile phone based internet. One is devices. That happened years ago, as today more than twice as many phones have browsers than all PCs in use. The second is users accessing the mobile internet. That is still lagging, but mobile will soon overtake PCs on this. The third is revenue. As mobile content is mostly charged, and web content is mostly free, this will happen much faster. But last is total usage (time or megabytes consumed). That will take a long while to transition from PC based web to mobile phones. Yet that will inevitably happen too, as the phones close the gap between PCs and the necessary elements are optimized (screens, access speeds etc)
But you're right, while user numbers are almost neck-to-neck PC vs mobile internet, the usage is very strongly lopsided in favour of PCs, still today.
Thanks for writing Dean
Tomi :-)
Posted by: Tomi T Ahonen | January 09, 2007 at 06:49 PM
Hi Jon Peddie
Sorry I missed responding to you somehow. Thanks for the comment. This article is an update of themese I've spoken on and written about for many years, including in each of my four books. So this is the kind of thing that comes from my spine, instinctively. I live and breathe these numbers and analogies - and I am constantly invited to discuss and explain these to global companies on all continents.
So its not a fair answer to say I did the above in two hours. While the physical typing and editing took about two hours, it reflects years of refining of those "stories" in it. I couldn't do a similar piece say on the internet industry even though I worked for New York's first internet service provider (OCSNY) from before the internet became mainstream, and have been closely involved with the web ever since.
Thanks for writing. Because I missed out on replying to you in a timely way, I'll send you also an e-mail to tell you I've replied.
Sorry about that
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | January 12, 2007 at 07:54 PM
Great article. Thanks.
Posted by: Pradeep Sethi | January 14, 2007 at 08:10 PM
Thanks Pradeep
Tomi :-)
Posted by: Tomi T Ahonen | January 16, 2007 at 04:03 PM
An incredible article. Thank you doesn't suffice. Your data will be invaluable for citing in my upcoming book.
Posted by: Cameron Moll | January 18, 2007 at 07:36 PM
Thanks Cameron
Let us know when your book is out, if this kind of data is of use in your book, we will want to read the book...
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | January 18, 2007 at 09:47 PM
Tomi,
This is another just excellent post providing real value to those of us who speculate about the future. I can only echo the thanks and kudos already given.
Posted by: Ken Camp | January 20, 2007 at 08:37 PM
Thank you Ken. I sometimes wonder when I do my longer "thought pieces" if anybody ends up reading it to the end, but you guys here have really given me nice feedback that these kinds of thoughts are also worthwhile in this blogging experience where often comments are shorter than a paragraph...
Oh, and PS - Cameron Moll - you're sending us a lot of traffic from your blogsite. Thank you for the very nice words there and I'm very happy to see the readers visiting us here.
If you want to read his comments, it is at this link
http://www.cameronmoll.com/
Thanks!
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | January 20, 2007 at 09:56 PM
Great article Tomi! What surprises me the most is the percentage of people accessing the Internet through their mobile phones in China, Japan and South Corea... Really astonishing.
Will you publish some of the sources you used to write this article?
Regards,
Giacomo
Posted by: Giacomo Vacca | January 22, 2007 at 02:37 PM
Tomi,
Just a quick line to tell you how much I enjoy your writings. You have supplied our company with countless research points and marketing tips. Thank you for all of your research and comments, both here and with the Forum Oxford. As we expand into North America, we will continue to point people to your book and blog site.
Cordially yours,
Giff Gfroerer
i2SMS North America
Posted by: Giff Gfroerer | January 23, 2007 at 04:07 PM
Dear Griff,
Thanks for your kind comments, we try to give good value to our community.
We welcome any new members to CDB or Oxford forum
thanks for posting
Alan
Posted by: alan moore | January 23, 2007 at 07:54 PM
I think your article was great, Tomi. I just wanted to get that out of the way. I must say I have trouble believing your video game statistics, though. Nintendo has shipped well in excess of 200 million consoles in the portable market alone, many of which are still in use. Well over half of U.S. citizens report that they play video games (which means over 175 million users here alone). I remain skeptical of your statistic. I understand that you meant 200 million consoles shipped that were still *in use*, but even then I think the figure is more like 300 or 400 million.
Wikipedia link on console shipments:
http://en.wikipedia.org/wiki/Best-selling_video_game_consoles
Posted by: Dave | January 26, 2007 at 02:19 PM
Hi Dave
Thanks. I went to check my sources, and first, it ignored handhelds. But of the classic console types, my latest source is the Financial Times of 10 Nov, 2006, which had first generation consoles (eg Playstation 1) shipping a total worlwide of 130 million. And then said second generation (PS2, Xbox etc) shipping 152 million consoles by 2006. The article had not counted the newest 3rd gen consoles.
So yes, also to me, that number seems surprisingly low, but I looked back through my previous data eg 2005, 2004 and it is consistent. Also remember, its a very "Western" and "Industrialized world" thing, videogaming consoles. So if for the sake of argument we split the 150M into three (America, Europe, Asia) then we'd get 50 M in North America. Against USA + Canada population of 330 M, you'd still get a Playstation2 or equivalent for every 6.5 people. Toss in some PSPs and Nintendos, and say average 2 using a console, these numbers seem easily compatible with the stat of half of Americans playing videogames.
Oh, and the Wikipedia stats seem consistent with ours, when you remove obsolete consoles and hand-helds.
Thanks for writing
Tomi :-)
Posted by: Tomi T Ahonen | January 26, 2007 at 05:24 PM
How fun! I love practicity, for as long as it doesn't stop the world from spinning.
Do you think third world countries (or "in development" countries) such as Mexico show the same behavior tendencies?
- dOna the Laggard.
Posted by: daniela bermudez | January 28, 2007 at 05:59 PM
... practicality, not "practicity" (Spanglish problem).
Posted by: daniela bermudez | January 28, 2007 at 06:04 PM
Hi daniela (Hola!)
Thanks for stopping by and posting the comment. Yes, I think the same patterns hold in the developing world, but with significant adjustments for economic factors. The very wealthy in the cities will illustrate almost identical behaviour to that in cities in Europe or Asia, but the majority of the population is so poor that they struggle to gain access even to a minimum phone and service. Still, one of the beauties of the mobile phone in the third world is that you don't need to be literate, to be able to get most of the benefits from a mobile phone. But if you want to use a PC, you have to be literate.
In fact in the third world you don't even need a reliable electrical supply (for the phone) - as there are even hand-cranked rechargers for mobile phones, that are used for example in Afghanistan where electricity supply is very unreliable today.
Many of the stories from the developing countries are heart-warming, such as the one village in Senagal Africa, where there is no mobile phone coverage in the village. But a farmer noticed that if you climb to the top of a tree in his yard, you would find radio coverage and could get connected to the phone network. He has put up a ladder to the tree, and rents out his phone. Local people in the village come to his house, pay him for the phone, and climb up to the tree to make calls. Before that connectivity, they would have to travel to the nearest town which would take all day walking. Now they can connect.
The benefits from adding IT/telecoms capacity for us in the developing world, such as a new computer (or Vista operating system) or upgrading our phone or getting faster speeds to our broadband, can be felt. But they are only incremental benefits.
In the developing world, if you have NO connectivity at all - no fixed landline phone, no computer, no internet, no mobile phone - in that world, whatever is your first connection, makes an unimaginable change to your life.
That is why the mobile phone is so incredibly compelling in Latin America, Africa and parts of Asia. Especially for the poorer people, it is the most amazing improvement in their lives.
Thanks for writing
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | January 30, 2007 at 02:16 AM
How refreshing to read an overview on the core trends written with such clarity. As someone who is living and breathing FMC, I would be fascinated to have your view on the likely winner in the race to deliver mobile connectivity. WiMax is the driving force in all that we do, albeit 802.16d and it's new sibling 802.16e aren't actually compatible with each other (although there is, quite understandably huge interest surrounding the concept of the merged standard whose working title is System 1). The irony is that user expectation and demand seems to have outpaced network operators' ability to supply, and whilst there seems unannimous agreement that many will choose access 'the web' through mobile devices in future, few agree exactly how genuinely pervasive computing will be delivered. It is my personal belief that we have only started to scratch the surface of the capabilities of fixed wireless networks as users access a multiplicity of communication, entertainment applications and public security systems that will compliment the mobile applications. With so many competing visions of how 4G will be delivered (WiMax merely being one of them) it would be interesting to consider whether it will be the fixed line telecoms giants going wireless, or the mobile carriers expanding into fixed services that will rule the roost (not that mobile networks have had it all their own way in recent years either).
Posted by: Piers Corfield | February 04, 2007 at 03:05 PM