Time to Confirm some Mobile User Numbers: SMS, MMS, Mobile Internet, M-News

This is the time of the year when we can do verifications of many statistics, was it true what they said back then. I have good data now on SMS, MMS, Mobile Internet users and consumers of Mobile News.

The regular readers of this blog know that I have a passion for the numbers of the industry, the statistics. I load my books with them, I cram my presentations full of them and I quote stats in most any discussion I have about this industry. There are many reasons for my love of mobile industry statistics, but one of the biggest is that we have them. Those who know me from more than ten years ago, will remember the young Nokia executive who was peddling future stories about something we called 3G, and used utter promiseware and forecasts built on nothing but assumptions. After my career at Nokia, when I started my consultancy on October 1, 2001, there could be no stats for the new 3G industry, because literally that very same day the 3G industry was launched in Japan. I love the numbers of our industry so much, because way back then in the olden days, we didn't have any numbers.

I have been desperate to find the 'facts' the stats the numbers and the proof, that this industry is and can be viable. As over the years the numbers started to appear, I have collected them feverishly, memorizing every detail and studying every variation. That passion eventually turned into an annual review of where the industry numbers are, at this blog. And two years ago, I turned that into the TomiAhonen Almanac, which is now an annual statistical publication and highly respected and widely quoted.

But with the numbers, I often get the question, where do the numbers come from. And I explain, the numbers in the Almanac are produced by my consulting company, TomiAhonen Consulting, as short-term forecasts, based on very many public data sources, with some TomiAhonen Consulting actual surveys, fortified with some data from my internal sources inside the industry. All of that goes into my big 'black box' ie my big model of the industry's numbers and facts. There I have several proprietary formulae with which I generate the numbers. So for example I was the first person in the world to spot the multiple subscription (first discovered in Finland obviously) and have had more than 13 years of time to build, test and evolve my multiple subscription model to calculate out the multiple subscriptions from the total subscriber count of any country. When later tested against known (surveyed) results, my model has proven remarkably accurate. And so forth.

So in the current TomiAhonen Almanac 2010, I have over 80 tables and charts of mostly data that is not available in any public data source. And then inevitably one will want to know, how accurate is it. Tomi 'claims' that SMS had 3.6 Billion users worldwide, which was 78% of all mobile phone subscribers at the time. How can that be, when we see for example in the USA, that only 62% of Americans were using SMS at the same time. Is Tomi 'exaggerating' and how reliable are his numbers. Obviously, over time, we will get other, independent sources that report on many of the stats in my Almanac. Which of the stats get reported, I have no control over. But any one of them could potentially make me look ridiculous haha..

But for the mobile service user numbers, we have had several major analyst houses do international surveys over the past two years, which give us enough data to cover most if not all of the 25 largest countries on the planet. These 25 countries all have populations of (around) over 50 million up to China and India at 1.3 and 1.2 Billion respectively. Together thse 25 countries account for 5 billion people and 74% of the planet's population. As it includes some of the most affluent countries like the USA, Japan, UK etc, and some of the poorest like Ethiopia, the Congo and Bangladesh, across the globe, it is a very good sample, from which we can fairly calculate a world average number for these statistics. Note that none of the analyst houses has bothered to go study each of these countries, but they can cover half a dozen or more, with usually regional focus areas. Specifically I am referring to public source information in press releases, white papers and news stories covering research by (in alphabetical order) Acision, Aenas, Asia Marketing Yearbook, Boston Consulting, ComScore, gfk, Informa, Jagtag, Nielsen, Ofcom, Pew, Research & Markets, TNS and Trak In. This data has then been supplemented with national regulator data, major operator data, and major domestic newspaper stories for those countries in those areas where these analysts had not covered that country or that service category. For the best case (SMS use) I had over 90% of the data points, for the worst case (News) I had 45%. I think these were enough that we can make very reliable nationally tested and relevant calculations of how many people are truly currently using these services. So lets go to the findings.

SMS HAD 79% USERS

For SMS I had written in the TomiAhonen Almanac 2010 that the end of year 2009 user level for SMS globally was 78%, ie 3.6 Billion. What kind of data points do we find? The USA is now up to 72%. Russia is at 80%, Germany at 88%, Italy 89%, the UK at 90%. Clearly my number is in that ballpark. There are lower numbers too. I was surprised to find that the latest finding from India says only 48% of the mobile phone subscribers in India use SMS, but this is probably due to the rapid expansion of mobile phones to those parts of the population who are not literate. Brazil was at 57% and Mexico at 68%. But Vietnam is at 90%, China at 93%. And so forth. So when we do all the math weighted by the size of each nation's population, we arrive at an SMS user level of... 79%. First, wow that is as close as it can possibly be. Remember I said 78% at the start of the year, and this 79% is roughly from half-point in the year 2010 (the various studies were completed at different points in time, in most cases during 2010, some in 2009). I had been saying before, that the SMS user base grows roughly 2 percentage points annually, so this finding is also totally consistent with the number having been 78% at the start of the year!

And projecting it to 80% for end of year 2010, what would the SMS user base be today (when the world has 5.2 Billion mobile phone subscribers?) 4.16 Billion. If you round off that number, in round terms its 4.2 Billion. And you know what? ABI Research reported on December 29 of 2010, that by their calculations the world had ...4.2 Billion users of SMS text messaging. It cannot get more precise than this haha. Can you trust my numbers? I think I know pretty well what I am doing haha. Now, lets go to the hidden success story of mobile, MMS.

MMS USERS 39%

One year ago, in the TomiAhonen Almanac 2010, I said that the active user base of MMS had reached 1.7 Billion people, which was 37% of all mobile phone subscribers at the time. Using the same process as the above, lets pick a few of the data points we find now from the surveys. In the USA, MMS is used by 54%. In China 49%. In Russia 36%. In Indonesia 25%. In Italy 42%. In Mexico 25%. In Turkey 26%. You get the picture. After all the math is done, the world's average user base of MMS at roughly mid-point of the year 2010 was a bit more than my 37%, it was... 39%. I said the world had 1.7 Billion users, I should have said 1.8 Billion. If we add a bit of growth for the year, today the world has 40% of all mobile phone subscribers as active users of MMS, and that means 2.08 Billion people, lets call it 2.1 Billion. That is the measured, accurate MMS user base today. No wonder MMS revenues grew so heavily last year. And by the way, in the most advanced countries like say Norway, the MMS user number is now at 84%, but Norway is too small a country to count in my model. The real number is probably even higher than what the model now predicts (by a fraction of a percent..)

MOBILE BROWSING 26%

So then the contentious number. The reported stories about mobile browsing are all over the place. We see some famous analysts like Morgan Stanley say that the point of when more than half of all internet users access from mobile phones will happen in a couple of years from now, while others like IBM and Nokia saying the world has already passed that point, and today more people access the internet on a mobile phone than on a PC of any kind. One way to examine the absolute truth, is to count actual national internet user data, and see what percentage of it uses mobile phones. Using that method, I already confirmed that the mid-point had been passed in late 2009, that yes, today more people access internet content, or 'surf' or use browsing services on a mobile phone than on a PC worldwide. I am quick to add, that this includes WAP, the basic form of browsing which is not HTML traditional 'real internet' browsing but rather the more simplified and mobile-optimised 'small screen' mobile internet use, but nonetheless, if its Google on your phone or Yahoo or eBay or Facebook or Twitter, who cares if its on WAP or HTML web, its the familiar internet brand, and its delivered on a browser, on your phone. For those consumers they think they are surfing the 'real' internet if they Google on their phone and it gives them the result. But yes, to be clear, when I say 'mobile browsing' I do mean both 'real internet' browsing of HTML content like we'd do on our iPhones, or the more basic WAP use that many do, in particular in the Emerging World markets. Still, just looking at the 10 largest countries by internet users, 6 out of the 10 have already passed the point where more internet browsing comes from mobile phones than PCs, starting obviously with China, India, Russia, Japan etc.

Now, in my TomiAhonen Almanac 2010, I said that the user base of mobile browsing was 1.3 Billion people ie 28% of all mobile phone users. What does the survey tell us. Not quite that good. When we measure mobile phone users and how many use the mobile internet, we have countries like China 24%, USA 38%, France 37% and Germany 27%. Then there is Japan at 84% of course. But then we have countries Russia 12%, Pakistan 22%, India 10%, and Spain 20%. The math doesn't come quite up to my percentage, rather than 28%, the survey result only confirms 26%. But that is still 1.2 Billion people -well more than the total installed base of personal computers in use in the world according to the latest ITU numbers. So my short term forecast seems to be a bit off on this.

But here, a very important point - these surveys are mostly consumer surveys, ie the companies like ComScore or TNS or Pew will ask the consumers what they are doing. So the consumer is asked for example 'do you use SMS text messaging on your phone' or 'do you use the internet on your phone'. And here, there is confusion. I have heard from several of my colleagues, that measuring the mobile internet usage in consumer surveys will under-count the real usage. The consumers are confused on this question, because they feel the internet experience is used 'on a PC, using a keyboard and mouse' - but if the same consumer is asked for example, 'do you use Facebook on your phone' there will be many who say 'yes' to that, while saying 'no' in the same questionnaire if asked if they use the internet on the phone. I am not saying this as an 'excuse'. I am saying this as my finding, that on this specific question, apparently, with 'WAP' and 'Mobile Internet' and 'mobile browsing' and 'mobile web' and whatever other possible permutations, the consumer can become very confused. A good market reserach instrument (the questionnaire) will attempt to correct for these types of errors, but they are likely to be in some of those findings.

What I will do, of course - numbers are my buddies - is to tell the truth of course - and to adjust my numbers downwards for the next TomiAhonen Almanac 2011, to reflect these findings. That is the very purpose of this process, that I always do at this time of year, I try to fine-tune and calibrate my model to be as accurate as it possibly can be, and there will invariably be small alterations I have to do to it across hundreds of data points. But for you the reader, I want to express the particular problem with this specific data point (which is not the problem with the three other data points we have here in this blog). And what kind of numbers do we now have for end-of-year 2010, if we use the 26% level for the full 5.2 Billion mobile phone subscribers? Try 1.35 Billion people who today are (definitely) using their phones to browse internet type of content. Wow. That is huge.

Remember, the total internet user base is 2 Billion now (said ITU a couple of weeks ago) and that 2 Billion number includes also those hundreds of millions who access the internet in internet cafe type of situations or libraries or at school or university. The world has only 538 households with a personal computer (ITU 2010). Then we have another about 370 million PCs used at work (many of these users will also have a PC at home so you cannot add the two numbers together). Clearly the mobile phone based internet access is far greater than PC-based access already today, but also, in the Industrialized World most of us who have a PC will also have a smartphone or premium featurephone that has a full HTML browser, so we can easily access internet services on both devices. Then as smartphones keep getting better, like the iPhone 4 for example, the stats now report that people are abandoning laptops and desktops and doing all their surfing on their smartphones. Not all users but the trend is away from legacy PC use. Japan saw this trend first, half a decade ago.

NEWS USERS ON MOBILE 23%

Finally we have consumption of news on the mobile phone. I see a lot of numbers on music use, ringing tones, listening to music etc, and on gaming downloads etc. Those numbers are so frequently reported over the years that my numbers are very well in line with the industry. But news is more obscure and for it we have just about enough data to make a good projection for world use. We find data points like 23% of mobile subscribers in China consume news, 30% in Japan, 35% in the Philippines, 32% in Thailand, 23% in the USA and 21% in Germany, but only 8% in Indonesia, and so forth. The calculated world average based on the sample, is 23%, which corresponded to 1.1 Billion users at mid-point in the year 2010. What did my TomiAhonen Almanac 2010 tell you a year ago? It said that at the start of the year the world had... 1.1 Billion people who consumed news on their phones. Is that accurate or what? Well, lets take this to the end-of-year numbers for 2010, so today the user number, assuming no growth in the percentage, is 1.2 Billion people. Bear in mind that the world circulation of newspapers, paid and free, is 480 million daily. 2.5x more people pay to consume news on a phone than on a newspaper. What of cable and satellite TV like our CNN, etc? The world has 950 million paid cable TV/satellite TV subscribers. So more people today pay to consume news on their phones than pay to see news on their TVs. Note, there is still free over-the-air TV, the world has 1.6 Billion TV sets - so mobile has still a couple of years to go to pass that for news, but for paid news, mobile is already the world's most used paid newsmedium. Makes you think... No wonder CNN, the BBC and just about every major news organization is rushing to deploy mobile services.

NEW NUMBERS TO MEMORIZE

So we have big numbers. 4.2 Billion active users of SMS text messaging. Wow. The most used data application on the planet, by far. More than twice as many people send text messages on their phones, than use the internet on any device. More actve users of SMS than total number of FM radios in the world. Except for the population of mobile phones themselves, SMS is the second most widely-reaching medium and technology. And still growing strong. SMS added 600 million new users in the past 12 months, so it grew its user base by 17% in just one year! No matter what industry you are in, no matter what you want to achieve, you have to know SMS, its like what email was more than a decade ago, but turbo-charged, rocket-powered.

Then the much younger sibling of SMS, we have MMS, which has 2.1 Billion active users. Wow. Exactly half of all SMS users have also adopted the multimedia cousin of MMS. 2.1 Billion mobile phone users send and receive multimedia messages - pictures, videos, sounds and long-form texts, on their phones. Not only is it twice the number of personal computers in use in the world, but there are more active users of MMS than the total number of television sets worldwide, by a wide margin. The second most widely used data application, obviously (behind only SMS) whatever anyone ever thought they would want to use the computer for, whether to do newsletters or promotions or coupons or show videoclips or short music or recordings or pictures or paragraphs of text - far bigger than the reach on Facebook or Twitter or any social media, the first choice has to be MMS. How much did MMS grew its user base in the past 12 months of economic troubles in the world? try 24% ! Can you imagine something which had more users than the internet, or more users than total number of television sets - and then it grows by 24% in one year. In one year! At this rate, MMS would double in 3 years and 2 months from now. Is this a cool industry to be in, or what?

And the mobile internet (including WAP). It is now measured to be 1.3 Billion in size - and thus, out of the 2.0 Billion total internet users in the world (including PCs of any kind from desktops to laptops to tablet PCs like the iPad, at homes and at work; and PCs used at internet cafes; and mobile phone based internet access including HTML real internet on smartphones and featurephones, and the more simple and mobile phone optimised WAP browsing) - 65% use a mobile phone at least part of the time. There is absolutely no question, that the point of when 'more people will use the internet on a phone' - has passed. Years ago! 1.3 Billion people use a mobile phone to browse internet content, at least part of the time. The poorer the nation, the greater the proportion by which mobile leads, to the point where 90% of internet use in India is from mobile phones today, as the regulator from India reported last year.

Wow, 1.3 Billion mobile phone users, 26% of us all, already surf the web on our phones. That number is bigger than the total number of fixed landline phones globally. Not that there are more internet users than fixed landline phones, but that there are more people who use the internet on a mobile phone - than total fixed landline phones (many who are now no longer used for voice calls and only used for the home internet access, what an irony, even this cannot save the fixed landline).

Or compare that to the maxiumum accessable market size for those famed 'App Store' applications. If we take all existing smartphones in use - about 750 million today, and of those we use the brand new statistic we heard today that 71% of the smartphone users actually install apps onto their smartphones - the accessable market size for an 'apps strategy' would be 530 million. Mobile web users are more than twice as big as that market. And that market is half Symbian, Nokia's OS. Blackberry is the second most used platform, iPhone only has less than 100 million iPhones in its total active installed base. So you could launch an iPhone app today, or if you went for the WAP/web version on a phone - it would cost you only 1/10th the cost to develop and you'd reach an active user base that is 13 times bigger. Now what was the smart strategy, again?

And we have now measured that it is true, 1.1 Billion people - 23% of mobile phone owners, receive news on their mobile phones. More than the total paid subscribers of cable TV and satellite TV who have access to 24 hour news like CNN, Sky, BBC, etc and more than twice the total circulation of all daily newspapers, free and paid. The newsmedium which has most paid users is now.. mobile! Cool. Oh, and what is the most-used format for news consumption on the phones? Its SMS of course. What is the second-most used? You guessed it, MMS of course.

4.2 Billion is SMS users, 2.1 Billion is MMS users, 1.3 Billion is mobile browsing/mobile internet users and 1.1 Billion is consumers of mobile news. Big numbers indeed.

There you go. We have some measured data on major mobile user stats. And the TomiAhonen Almanac is proving a very accurate source indeed. Now, for those readers who don't have the Almanac, it only costs 9.99 Euros and I have a special treat for you newcomers. If you buy the TomiAhonen Almanac 2010 now, during January 2011, you will receive it instantly of course, and then you will also receive, for no further cost, the TomiAhonen Almanac 2011 edition as well, that will be released in February (for which I am obviously right now calculating and researching the data. There will again be new data in several cool new charts and tables that was not in the previous Almanac). Isn't that a fair deal? If you ever wanted to know all the data, facts and stats about the mobile industry, now is your chance. For more info including several sample pages with full un-obscured charts and tables, see TomiAhonen Almanac 2010.

Comments

[vvaz]

@Baron95

You can perfectly deliver text ads on WAP. You know, this type of ads on which Google build itself. And you know? When I type 'disney' in Google first link on page is text ad for one of Disney tv channels...

[Mark]

"Second, SMS does NOT "capture/retain""

Actually they do - recurring SMS messages charged at premium rates are a fairly common marketing vehicle.

Advertising is also done by SMS and MMS quite easily either directly or by enclosed link. For example, the national chain that services my car send me SMS messages offering new products as well as reminding me when a service is due.

[Bob Shaw]

Tomi- Very informative and your forecast has been quite accurate. The cost for reaching a potential customer is so low using SMS, MMS and Web/WAP and the percentage of potential customers that can be reached is so high that it will be difficult for other means e.g. Apps, to compete in most cases. Apps will have to create significant value addition compared to what can be achieved with these three to be competitive.

[iphone cases]

Salut, où avez-vous obtenu cette information peut vous s'il vous pla?t appuyer ce avec une certaine preuve ou vous pouvez dire quelques bonnes références que moi et d'autres apprécieront vraiment. Cette information est vraiment bon et je vais dire sera toujours utile si nous essayer sans risques. Donc, si vous pouvez le sauvegarder. Cela nous aidera vraiment à tous. Et cela pourrait apporter un peu de bonne réputation pour vous.

[kevin]

New number: Apple just started its promotion for the 10 billionth app bought from the App Store. Doing some calculations, users are downloading around 35-40 million apps a day from the Store (which includes free apps, but does not include upgrades to apps).

In sum, the App Store will reach 10 billion in just a few days more than the 2.5 years from its birth on 7/12/2008.

[Tomi T Ahonen]

Hi Baron95, vvaz, Mark, Leebase, Bob, kevin

Baron95 - I am sorry my blog triggered that long and detailed and well-thought out comment from you. I am really sorry. In this blog article, I had no intention whatsovever to make flippant comments about alternate business possibilities on mobile, and based on what I wrote here, your comments are totally relevant. However, on several past lengthy, detailed, fact-filled calculations, I have indicated the utter futility of attempting to make profits with paid apps on any app store today. I have shown calculations of revenues, downloads, costs, profits and explained that half of all paid app developers can expect to break even on their first edition app - assuming no upgrades - in 22 years. That blog has been referenced in over 100 other blog and news articles and triggered several similar calculations - all which came to the same conclusion, that there is overhype about apps and their ability to generate profits today.

In my blog analysis articles about the app stores, I also have explained why app store style adver-apps are a ridiculously bad way to try to reach an advertising audience on mobile. And at other times I have discussed other revenue-genrating opportunties too, like virtual property sales in free apps. If you are interested, please just look for those using the search button here on this blog. But I do apprecaite your considered comments, they were merited, and I was too flippant in my throw-away line. This blog article was obviously not about app stores, it was about SMS, MMS, mobile internet and mobile news.

On SMS and MMS - you are totally mistaken. All ad agencies today say the hottest thing to do is 'engagement marketing'. The man who coined the term and co-authored the book with me and blogged here with me for 3 years, is Alan Moore. Alan teaches with me at Oxford and writes more books. Alan says that SMS and MMS are optimal engagement marketing tools. The same is echoed by for example mobile advertising guru and author Jonathan MacDonald etc.

I agree that in 2-5 years most now phones sold will be smartphones, I was one of the first people to explain WHY all phones will become smartphones before thsi decade is done. That likelihood, however, bears no correlation with your conclusion that adver-apps would be in any way meaningful at that time. We've had aver-apps on featurephones, and the bigger use of smartphones today is the mobile web, more than downloading apps. Some experts believe apps will form the majority of mobile phone use in the future. That view is prevalent on the West Coast of America. The rest of the world - which has had both apps and the mobile web far longer than the USA - believe the opposite, that the web model will win. I obviously belive in the web. We'll see.

Your 'everybody in the internet knows' argument that zero revenues but building a huge audience is proven to be a myth. There was an economic bubble just 8 years ago that utterly devastated that silly concept. Google didn't turn profitable because they grew 'big enough'. They became profitable because they invented a new advertising format, the first unique one for the internet - adwords. It has nothing to do with size. Adwords was adapted by Flirtomatic when they had 100,000 users and Flirtomatic was making good money off that.

vvaz - thanks!

Mark - thanks!

Leebase - cool, don't worry about the profits haha. Let me just briefly explain, I have nothing against us discussing how to make profits with mobile or online or digital services or apps, here on this blog. That is perfectly fine. What I don't want us to do, is to argue about stock price evaluations because that to me is even more tedious than arguments about religion or politics and I do not want to waste my time, or that of my readers, on such a pointless activity, as I have said many times, this is not a financial analysis blog. That is why I am also kind of allergic to any mention of 'corporate profits' as an arguemnt here, because that is very close to another argument about what will happen to this stock or that, today, yesterday or tomorrow...

So don't worry, I wont be censoring you on this haha..

Now to your points. Yes, I agree, Apple attacts a very desirable affluent and influential user base as a target audience. Totally agree. I also agree size is not equal to profitable business (see above). Valid point oil/tennis shoes (haha, loved the analogy) and yes, profit opportunities are not mutually exclusive.

But then we get our difference of opinion. You say 'nothing magical about SMS and MMS, compared to internet'. I hear you. I hear that argument often. It makes very much sense. If this was true, we would have SMS and MMS on the internet today. We do not. If this was true, the internet would have paid services worth SMS today, they don't even do half that. There IS something magical about SMS and MMS. SMS specifically is able to generate revenues FOR THE INTERNET. But wait, Leebase, I have been working on a new blog article. Do me this favor, wait on the 'is SMS different or not' argument and your response, until I post that blog article hopefully on Monday, read that, and then see if you might agree with me, ok? I am addressing those very points there.

But on the SMS/MMS issue of making money, yes, you are right, that not all SMS and MMS services are able to turn profitable. This is normal of any business. Not all hollywood movies are profitable, not all videogames are profitable, not all songs released become hit songs, etc. That is normal of any business, and mobile services on SMS, MMS, WAP, Web and Java - all - fit a very familiar standard hit business formula, about one in 10 is a success. This is true of books too. But not of app store applications. There the odds are astronomically against you, my rough estimate is that it is 1 in 1,000 ! This is far more like a lottery than a real business. What you say is true, when you compare SMS and MMS to books, records, movies etc. App store apps are not that lucky. They are utterly disasterous as a business prospect (see above)

As to 'how' haha, this blog is stuffed full of success stories around SMS and MMS, come on. And I have that free 350 page book with tons more in it. What more do you want. you cannot be serious in asking me now to write more for you. Just stick SMS or MMS in the search box and you'll get hundreds immediately.

Bob - yeah, we agree. That being said, and for all my 'pessimism' about apps, there still IS an opportunity on apps, but it is very much in the 7th mass media angle to apps - ie doing on an app something you cannot do on other means on a phone or any other device. So take Augmented Reality, a perfect example, cannot be done on any other platform than mobile, and only on smartphones, and only via an app of some kind. THAT makes sense and can drive some revenues and users and profits - but in the scale that is miniscule compared this blog haha.

kevin - pls see what I wrote about apps above. This blog was obviously not about apps, it was about SMS, MMS, WAP/web and mobile news. I appreciate it that you were activated by my brief mention of apps but sorry, I didn't mean to disparate apps in this blog article as I have already explained in very deep detailed blogs why the numbers you quote here are utterly meaningless. I appreciate the comment, kevin I really do, but really? 10 billion downloads most of which were free and half of those who made the paid apps might break even - if they're among the lucky ones - before the year 2023 - half will break even some time after that. You were aware that one sixth of all paid downloads from the App Store were books? Should we really compare who is 'more successful' Amazon or iPhone App Store? kevin, that point is truly irrelevant what you reported, but thank you anyway. If you go read the app store economics blog, and comment there, I will come there to discuss the app store economics with you, but lets not do that here, this blog was about SMS, MMS etc.. ok?

Thank you all

Tomi Ahonen :-)

[Bob Shaw]

Baron95 - You gave the following example:

"E.g. I can get a map/directions from google maps by going to maps.google.com on my mobile browser or I can launch an app. If the app is more personalized, more functional, faster, etc, etc, etc, it will have more valuable interactions and profit potential."

I agree that there is an opportunity for profit potential if anything can be made more personalized using an app. Now considering the advantages of lower development cost and wider reach of a web app as compared to a mobile app, the question is: Could not these personalized services be offered through a web app instead of a mobile app?

[Phil W]

@ Baron95, Tomi writes on the mobile market for companies that want to provide services for the mobile market. For those companies the only thing that matters is how big a market can I reach, not who is the most profitable company. therefore the only thing that Tomi is focused on is marketshare and as it is his blog, he sets the rules.

What I can't quite understand is why you have such a down on Nokia, I've seen you on other blogs and the message is always the same.

The revenue share has dropped because the competition has intensified, but I would argue to be taking a quarter of all mobile revenues is pretty good in the current climate. Market share is holding up as well. Going forward I would expect both to stabilise.

I don't want to compare profitshare with Apple as Apple is playing a different game. What I would be more interested in seeing is profitshare for all mobile companies excluding Apple. That would be a better gauge as to how Nokia is performing.

Apple is focusing on only the richest part of the market so of course its profitshare is the biggest. unless other companies play the same game, they can't possibly match that. Most other companies are playing the same game as Nokia, so it would be a better gauge to compare them.

[kevin]

Tomi, I did read what you wrote about apps above, and that was my response. I will continue this on the App Store Economics blog.

[Tomi T Ahonen]

Hi Baron95, Bob, Leebase, Phil, kevin

GUYS ! The topic of this blog article was to CONFIRM numbers we have discussed on this blog about SMS, about MMS, about web and WAP, and about mobile news.

Nowhere in this blog story, was there any confirmation about the status of apps. Trust me, guys, I will be here - I have been here MANY TIMES BEFORE - about the stats about the apps. Why do you guys NOT deal with the topic, and you take this to apps or even more (Baron95!) - the sales of units of handsets and their profits.

I won't bother to have that discussion here with you. Guys, you all visit this blog often. Can you NOT appreciate the research I do for you, volunteer the data here - and PLEASE if you discuss something, do talk about what I posted about. I have at least 100 blog articles about handsets and their sales, and AT LEAST 20 about apps etc.. We can have the discussions there, go to the most recent blog about apps and comment, I'll come there and at least the blog article will have recent data which is relevant.

I could understand this, if you were new to the blog, but not you five guys, come on!

So I'll ignore the discussions here about apps or handsets. I'll deal with your comments relating to SMS, MMS, mobile web and m-news only. I hope you understand why.

Baron95 - yes, valid point and I am sure we will see more of that kind of integration, not just of mobile web and apps 'convergence' or integration where one feeds another - but I am pretty sure that the WAP push and web links on SMS and MMS will also bring far more integration of mobile web and SMS/MMS.

Bob - good point, I totally agree, that the potential is far bigger to make the user experience and the service adoption and the paid service on the mobile web side than the app side but obviously both are valid ways to approach, and each use case idea should be considered in context of user and device and network etc.

Leebase - ok, I'll bite, you present it reasonably well. I totally appreciate your view, of looking at a smartphone as being primarily a 'pocket computer'. I explain it in almost every one of my books, that the pocket computer metaphor is two decades old, it has found its peak market (remember what we called PDAs) which all had apps, and that was the extent of the pocket computer market - if there is no communication ability. The reason why the smartphone crushed the PDA a decade ago, was not because smartphones were good at apps or 'computing' it was because they were phones - and because of Reachability - ie the 'ringing in the pocket test' as I explain in my more recent books. What you see, when you see a smartphone - is valid. There is an honest, millions-of-devices sized market for that. Only it is a far minority of all smartphone users. The vast majority of smartphones want the PHONE functionality, that is why the more expensive iPhone outsells the cheaper iPod Touch. I won't waste more on this, please read in the free ebook the part about 'Reachability'.

Baron95 - about my ebook, are you seriously suggesting that I should have left some part out, about the 'Insider's Guide to Mobile' so that I could include a chapter on the profitability analysis of the handset makers? Where handsets are less than one fifth of the industry? Like you didn't get serious value out of the two chatpers on handsets, stuff that is in no other free resource anywhere? What part of those two chapters would you think I should have removed?

Phil - thanks for the commments, I was tempted to delete them haha as getting now into those silly arguments about profitability, but that would be unfair to you as you did respond to Baron95 - but warning to you guys all, don't get into the corporate profitability on any blog article I write here, except those that address corporate performance! Don't any of you continue these corporate profitability discussions in this thread. This topic was about SMS, MMS, WAP and m-news, not about Nokia and not about Apple..
You guys KNOW I am sick of them.

kevin - cool, I'll meet you there

Everybody, please STOP all discussions in this thread that are not related to SMS, MMS, mobile web or m-news. Ok? Please, I ask you.

Tomi Ahonen :-)

[kevin]

Tomi,
You're absolutely correct about reachability. But people have had reachability with featurephones with SMS/MMS/WAP/etc. I think Lee's point was that the distinction of smartphones is that the reachability of phones has been combined with incredible processing power (that of a computer) so apps, native or web-based, that are enhanced by being connected (i.e., social, content reachback) will significantly increase the user's productivity or entertainment.

[Phil W]

Sorry for the off topic post previously, I unforgivably let myself be goaded into an inappropriate response. I should have known better. By all means delete it if you like.

Re SMS, I'm not surprised given how much everyone I know uses it. One of the things I particularly like about it is that it can be used to time shift a conversation across the globe. By that I mean that if you are in Australia and you want to contact someone in the UK, the time difference means you have to plan a voice call. Not so an SMS. I also like the delivery reports which mean you get to know that your SMS has been received.

I have some reservations about the use of SMS for advertising. I hope we never get to the situation that we are open to unsolicited SMSs ie effectively mobile SPAM. I know you have talked about "opt in" schemes and that's ok, but I fear that given the way some individuals ignore the rules and bombard us with unsolicited emails are we sure that won't happen eventually in the mobile space?

[kevin]

Here's a link to story about a Cambridge, Massachusetts, USA restaurant using SMS to allow patrons to communicate with their waiters.

http://techland.time.com/2011/01/18/restaurants-try-texting-to-speed-up-service/

Not passing judgement either way.

[Phil W]

@Kevin, good link!

Most of the time I would say this is not a good idea, but there have been too many times when coming to the end of a meal, it suddenly becomes very difficult to attract the attention of the waiter to get the bill. This would be soooo useful in those cases! LOL

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Clearly the time of apps is NOT in the past, not by any measure. It was just reported that the average iOS device user has downloaded 60 apps. Nobody downloaded 60 apps for their Palm Treo.

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Phone launch sales), that has dropped to around is bleeding market share again. We do not know the exact number until we have the final count of all smartphones sold in Q4.