Dispatches from the Near Future: Headlines to come in mobile stories in 2010

So its that time, lets gaze into the crystal ball and see what kind of milestones will we be passing this year. We have some big numbers, very big numbers coming.

5 BILLION SUBS

The world will pass 5 billion mobile subscribers this year (was 4.6B at end of 2009). This is not big news, its been said by many analysts and even the ITU has said so for quite some time that this milestone is coming this year. But we have more data points and now I can say that the actual timing for when the earth passes 5 Billion active mobile phone subscribers will be about November of 2010, and the year will end with 5.1 B total subscribers. That is another truly astonishing statistic, as it reflects 75% of the population on the planet (which is 6.8 B people). Its just a few years ago when we passed the half-point at 3.4 B subscribers, and a strong consensus has formed that the globe will be passing 100% penetration rate (easily within this decade).

Please do bear in mind, as we approach the 100% penetration level, the world is not as wealthy as you and me, we now hit poverty, illiteracy, lack of electricity and water, wandering peoples like nomads in the Sahara and the Ghobi desert etc, etc. And in the Emerging World, a large part of the total population is children (not mobile customers). Obviously over 100% penetration rate means many people have 2 accounts and increasingly also 2 phones. Also for context, the world has 1.1 B fixed landline phones (in gradual decline globally). And 1.2 B personal computers, 1.6 B television sets. But we'll have 5 Billion mobile phone accounts. Thats big.

4.6B TOTAL MOBILE PHONES IN USE

But its not big news anymore haha. A more interesting number is the total number of actual mobile phones in use, as obviously some customers have multiple SIM cards and switch between networks, but anyone with 2 phones that they carry, will also put traffic and consume services on both devices. The world had 3.9 B total mobile phones in use at EOY 2009, will reach 4.6 B total mobile phones in use by the end of this year. That is an actual mobile phone for two thirds of the planet.

A NOKIA FOR 27% OF PLANET

That brings some truly mind-boggling and definitely all-time numbers for Nokia. Nokia has passed 3 Billion mobile phones shipped cumulatively since they first started (rivals Motorola and Samsung have both passed 1 Billion total handsets ever made). But what of the active user base. Here it gets astonishing. At the end of this year, there will be 1.8 Billion Nokia branded phones in use globally. That means a Nokia branded phone for 27% of the planet. By far, by far, by a VERY LONG SHOT this is the most pervasive brand ever. Ford never had it, not even when Model T was the world's bestselling car. Neither did VW at the peak of the Beetle or Toyota today. Sony never was used by a quarter of the planet, not with the Walkman or Playstation or Sony TVs or anything. Microsoft has sold far more of its Windows operating system, than any computer maker ever of their branded personal computers (Dell, HP, IBM/Lenovo, Apple, etc) but counting all Microsoft operating systems, from DOS to Windows to its smartphone operating systems, has never been used by a quarter of the planet. The AK 47 Kalashnikov rifle has never been used by a quarter of the planet. And its not just technology brands. Levis the best-selling jeans were not worn by a quarter of the planet. Nike may seem ubiquitous but is not on the feet of 25% of the population. Coca Cola is certainly visible in most countries but is not being drunk by a quarter of the earth's population. But this year Nokia passes the 25% level during the summer, and will end the year, with 27% of all people on the planet having a Nokia branded phone in use. A world record obviously for the company that legitimately can call the 2000-2009 decade the 'Nokia Decade'.

And while we're on Nokia for 2010, the company achieves another astonishing record - they will ship their 3.4 Billionth phone this year - so cumulatively they will have shipped a phone for half the planet (another record). The best-selling watchmaker of all time, Timex shipped a billion wristwatches over 50 years, but never reached half the planet cumulatively. Casio shipped a billion pocket calculators in about 25 years but never reached the level of half the planet when counted cumulatively.

SMS 4B USERS

Another amazing number we'll reach this year is 4 Billion which is the global active user base of SMS text messaging. That number was hinted at by Clickatell which said we are near 4 B already. My TomiAhonen Almanac 2010 said that the world was at 3.6 B active users at the end of 2009. But we'll go far above that, and pass the 4 Billion milestone about November of 2010, at which point 60% of the planet will be active users of SMS. For contrast the global user base of active users of email is about 1.4 Billion people. The internet has 1.7 Billion users (including those who access at internet cafe's and those who use the internet on their mobile phones). The total installed base of personal computers is only 1.2 B PCs. But we'll have 4 B active users of SMS this year. Oh, and that will be 80% of all mobile phone subscribers (up from 78% in 2009). SMS is an unstoppable train haha..

While we are there, the world sent 4.5 Trillion SMS text messages last year. That will grow 22% this year, to 5.5 Trillion total SMS text messages sent globally. A big driver in the traffic now is North America, as Americans finally joined the SMS texting fraternity which had almost all of the rest of the world already as users (and obviously in Japan the local mobile messaging variantions)

CAMERAPHONES FOR HALF THE PLANET

And then the cameraphone. We are going from 2.85 B cameraphones in use at end of 2009 to 3.6 B in use at end of this year. That means, that there is literally a cameraphone in active use, for half the population of the planet. Again, except for mroe simple older mobile phones, this is the most widely spread technology gadget ever. And this was achieved in one decade, literally. Thank you J-Phone (now Softbank) and Sharp of Japan for being brave to launch cameraphones ten years ago, when everybody laughed at the gadget. 3.6 Billino in use this year? Thats three times the spread of personal computers. And versus all those other cameras? We will hit the point this year, where the active population of cameraphones in use will exceed the cumulative shipments of all digital cameras ever made, and adding to that, the cumulative shipments of all film-based cameras ever manufactured in the previous 150 years (exclusing the disposable single-use Kodak cameras that were popular some years ago). Think about that. For 80% of the planet's population who have any kind of camera, their only camera they have EVER KNOWN, is their cameraphone. Digital cameras by Canon, Nikon etc, are very luxury items for the very few lucky ones. Cameraphones will form 78% of all phones in use on the planet.

INDUSTRY REVENUES

The mobile industry revenues keep growing but we don't have any really astonishing 'milestone' numbers for this year. The mobile operator revenues will continue to grow passing 900 Billion dollars easily this year. The SMS revenues will pass 120 B dollars, MMS messaging will pass 30 B dollars, total mobile non-messaging data revenues will pass 130 B dollars and total mobile data revenues will pass 300 B dollars this year. As mobile data is already bigger than all internet revenues including content fees, advertising, and access fees like broadband and dial-up fees - nothing astonishing here to report. But note, that when we pass 300 B dollars in mobile data revenues, we start to chase Television global revenues where mobile the 7th mass medium will approach TV the fifth medium in size globally. Haha, as we've passed recordings (2nd mass media channel), cinema (3rd), radio (4th) and internet (6th) already, when mobile will pass TV in about 2012, we'll only have the oldest media to go (print the 1st mass medium) which mobile will pass by mid-decade. But we'll monitor those numbers here at this blog. For 2010, its 'business as usual' for the fastest-growing major industry on the planet. Big year of revenue growth but no major milestones really.

M-NEWS PASSES 1 B USERS

A big milestone is coming for the global active customer base for mobile news. We'll be passing the 1 B total user mark this year. Bear in mind that newspapers have globally less than that in total daily circulation, at about 470 million including the free newspapers . Television has under 900 million total paid subscribers on satellite and cable. But mobile will pass 1 B (almost all using paid) news consumers. That will draw the attention of many media execs who may have been sitting on the fence about mobile and media.

SMARTPHONES SELL OVER 200M

The total smartphone market will keep growing strongly. Last year about 175 million smartphones were sold. We will definitely pass 200 million smartphones sold this year. How far above that, will depend on many things, most of all how ruthless the price wars become as the 'bloodbath' heats up when many big brands stumble in what should have been their golden moments in smartphones (am expecting bad news out of Motorola, Microsoft, Palm etc, even Apple will seem to 'stall' in their smartphone market share growth, which will shift the growth numbers to Samsung, RIM, HTC; all chasing market leader Nokia obviously)

If very very extremely successful numbers come in, its conceivable that this year more smartphones will sell than all PCs. I don't think that will happen in 2010, I think it will happen in 2011. (we already sell more smartphones annually than any type of portable PCs, ie laptops, notebooks, netbooks and tablets, combined). Still, 200 million will be a big celebrated number towards the end of the year. But keep in mind, that out of all new phone sales, smartphones will not pass 18% this year (was 14% last year) and obviously the installed base of smartphones globally will be a small percentage for many years to come. Even in the most advanced markets like Europe and the US, out of new mobile phone sales, its years to go before half will be smartphones.

2B RECEIVE MOBILE ADS

The total population of the planet, who will receive at least one advertisement on their phones, will pass 2 billion this year (was 1.8B last year). Still, mobile advertising is a tiny part of all digital advertising, and digital advertising is a tiny part of all advertising, so while the reach of mobile is the widest on the planet - by far - in terms of total ads served and total revenues, mobile advertising is still a baby industry learning to walk. BUt the 2B total 'audience reach' number will draw headlines, in particular in the media and advertising circles this year.

1B VOTE ON TV VIA PHONE

Another milestone we'll reach will be the total number of people to vote on TV shows via mobile. That will hit an astonishing 1 Billion actual unique TV viewers this year (remember world has 1.6 Billion television sets, but also in the emerging world, typically a wealthy family that has a TV set, will have the total family sharing that one TV set, so TV's viewer audience is far larger than TV set population). The popularity of reality TV formats like American Idol, and the way that TV producers learn to earn more money on TV-interactivity than on advertising or subscriptions (as the TV industry already does in Finland for example) will help drive this trend. Expect many more of those TV presenters urging you to take out your phone and dial this number for candidate A..

100% PENETRATION RATES GALORE

We have over 60 countries with over 100% mobile phone penetration rates, and the UAE became the first country with 200% penetration rate already. Italy, Israel, Hong Kong, Russia etc are at 150% and climbing. Europe is past 125%. But in markets where its not yet quite accepted that under 10 year olds should 'naturally' have a phone, and all grandparents seem to have phones, etc, we will see many countries pass the 100% penetration level this year.

Brazil passes 100% in 2010
France passes 100% in 2010
Saudi Arabia passes 100% in 2010
South Korea passes 100% in 2010
Turkey passes 100% in 2010

All of the Middle East passes 100% in 2010
All of Latin America passes 100% in 2010

The USA will approach but probably not yet pass 100% in 2010. It is now racing with Vietnam, Morocco, Mexico and Dominican Republic for this 'honor'. Canada and Japan are holding the tail end for mobile phone penetration level among industrialized countries. Japan will pass 90% in 2010, Canada will approach that level. Meanwhile Africa will pass 50% mobile phone penetration level this year.

SMARTPHONE MAKER UNIT MILESTONES

RIM will ship its 100 millionth Blackberry smartphone in 2010 during the summer. Apple is far from that when counting iPhones only (will pass 50 M iPhones shipped since 2007 obviously soon), but they will of course count also iPod Touch's and now the new iPad, and will celebrate the 100 millionth cumulative shipments of any iPhone OS (and thus potential iPhone App Store client) in 2010. This will happen sometime after the summer luanch of the new iPhone. Meanwhile Nokia the global leader celebrates its 300 millionth smartphone shipped, something we'll probably hear about in various Ovi related news.

2G AND 3G

We will reach the end of an era, when Japan becomes first country to extinguish their 2G networks this year, becoming the first country where 3G is the 'least fast' mobile technology and the 'basic' level of service. Meanwhile the world will pass 800 million paying 3G subscribers (in Western Europe already half of population have a 3G subscription). Not all who pay for a 3G account will actually use '3G data' type of services so this includes those who just got the latest phone and didn't even notice that was a 3G device and just continue to use voice and SMS on it..  But still, don't say 3G is a failure haha, 800 million users generating well in excess of a third of our industry revenues - and growing strong.

10 BILLION MADE

The last number I want to end on, is the '10 billion made' number. The mobile phone was first commercially launched by NTT in Japan in 1979 (not by Ameritech and the iconic Motorola handheld phone in Chicago in 1983), and in the past 31 years the most counter-intuitive and unlikely technology has spread to become the most pervasive technology on the planet. And now at the end of this year, we will pass the point where the cumulative shipments of all mobile phones ever made, will pass 10 billion units. Remember the planet has only 6.8 Billion people. No technology ever, not cars, not wristwatches, not televisions, not personal computers, not FM radios, not bicycles, no technology ever has been manufactured at such enormous numbers.

So, over half of all phones made have been discarded, obviously. Let me put this number into context to try to understand the scale of our industry. At the end of the year there will be 4.6 Billion actual mobile phones in use, for 6.8 Billion people. That means 2.2 Billion people on the planet (many of them kids in the Emerging World obviously) for whom there is no phone currently. 

Now, in the last 5 years, we have discarded far more than 2.2 Billion phones, almost all of them fully functioning so they were not 'broken' or 'worn' so as to be unusable. We have thrown away so many 'good' recent phones, that we could give each of those 2.2 Billion people a perfectly functional 2G phone, all so recent they were manufactured after 2005 - most with a basic color screen and basic WAP browser, and in many cases a cameraphone even, and there would have been a moblie phone for everyone on the planet. Makes you think. Those old phones you have in your drawer somewhere? Perhaps its time to go give them away to charity, a first phone to many in Africa can be truly a life-changer.

ALL DATA TOMIAHONEN CONSULTING

So, except where separately mentioned, all data in this blog come from two sources - you may freely quote them obviously and/or link to this blog. All 2009 data source is TomiAhonen Almanac 2010. All forecasts to end of 2010 are source TomiAhonen Consulting March 2010. Feel free to quote these numbers and use those as your sources. We need to adjust to ever more giant numbers for this industry. 5 Billion paying active customers. 4 Billlion users of SMS text messaging. A cameraphone for half the planet. 2 Billion to receive an ad on their mobile phone and 1 Billion will vote on phones. And even in Africa, half the population will have a phone by the end of 2010. An amazing industry to be privileged to be part of, isn't it.

Comments

[Dean Bubley]

Not really a consumer brand as such, but obviously ARM's processors have an even greater reach than Nokia, given they're in most phones - sometimes more than one processor per device

[Romain Criton]

Hi Tomi,
You've probably made a typo in the "10B MADE" chapter:
"At the end of the year there will be 4.6 Billion mobile phone subscriptions in active use"
I'm sure you meant "4.6 Billion mobile phones" and not subscriptions...
Also, does the number of subscribers you are reporting include Machine 2 Machine subscriptions as well as "pure data" subscriptions (to connect a laptop via a 3G dongle) ?
Do you know how significant those numbers are ? They probably account for a portion of the gap between total # of subscriptions and total number of handsets.

One last comment: I'm astonished at the very low penetration rate in Japan ! How come that the country that started it all and remained (maybe still remains) for many years at the cutting edge of mobile tech and uses could possibly have such a low penetration rate ??
Any explanation ?

[Tomi T Ahonen]

Hi Dean and Romain

Thanks for comments.

Dean - good point but yeah, its a component.

Romain - thanks. I corrected the typo, thanks. As to M2M subscriptions, yes they are included in the total subscription count. Its still small potatos. Data cards and dongles run about 50 million units in annual sales. They do help explain the difference but the big part is multiple SIM cards. In Russia, Ukraine etc its very common to have 3 SIM cards for one phone - to save money switching networks depending on who you call or what time it is, or what kind of offer you have for your messages and minutes from any given operator.

On Japan, partly its postpaid (prepaid will boost market growth) and part is 'protectionist' practises in particular delay in allowing MVNOs into the market, the first Japanese MVNO did not launch until 2009. And one factor is that Japan has one of the most 'top heavy' age pyramids of any nation - ie lots of very old people and few kids. That means far slower adoption of phones - for retired people (who already tend to have fixed landlines). Japan was running in the mid-field pack of industrialized countries to the mid 2000s decade, but then the prepaid and MVNO markets did shoot past them. Now even the USA has passed Japan which is 2nd from last ahead only of Canada by subscriber count.

Thank you both for writing

Tomi Ahonen :-)

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