Next Four Years in Mobile - Highlights from my brand new forecast

The world is going mobile-first. Apple is the most profitable company in the history of humankind, and is so only because they shifted away from PCs to mobile. Starbucks says mobile is more important to the company's future than coffee beans or location. Yahoo follows Google and Facebook declaring mobile is how they intend to make their profits. NBA the basketball association now says they are 'mobile first'. From hotels to airlines to media, advertising, banking and retail, even government, healthcare and education are all mad about mobile. Mobile is obviously the thing to do.

However, once you get past the initial iSyndrome (Martin Wilson's smart observation that creating an iPhone App is not a substitute for a mobile strategy) what do you do? How many have smartphones vs 'dumbphones'? How many of the 3 Billion global 'internet users' are already on mobile? How much larger is the mobile internet user base than say, the number of people downloading smartphone apps. How much bigger is the reach of MMS than email or Facebook or Whatsapp. And exactly how huge is the reach of the only gorilla in the room, SMS text messaging? Yes you came to the right place. Lets look at the next four years in the mobile industry.

For those who don't know me, welcome to my blog. I am the most accurate forecaster of this industry, the father of many of the statistics and metrics of mobile and this blog is the largest collection of public source statistics and facts about the mobile industry. I have written 12 books for the mobile industry including the book on how this industry makes its money (yes, literally, I wrote 'the' book: m-Profits, global bestseller in 2002). I have a passion for sharing data and stats about this industry both here on this blog that has passed 5 million visitors lifetime (and still no ads! and no registration! and I will not spam you) and at my Twitter feed I have already 14,000 following me. Perhaps the biggest indicator of how I am seen is that 140 books by my peers already quote me in just 13 years from my first book. No wonder Forbes called me the most influential expert in mobile. And yes, now its a time to look at my 'big' comprehensive forecast into the next four years in this industry.

MY BIG FORECAST IS OUT

So yes, three years ago I released a major forecast that was widely references and very well received. Back then I also made a 'highlights' blog entry about major mileposts coming in the next few years. You can go read that blog if you want, I will of course return to that and revisit those forecasts from three years ago, to see how well they compared to the reality. Am I still the most accurate forecaster of this industry? (My regular readers know already...). But yes, this is now the occasion to celebrate the launch of the Tomi Ahonen Mobile Forecast 2014-2018. The next four years in this magnificent industry, the fastest--growing giant industry the planet has ever seen that went from zero to 1 Trillion dollars of annual revenues in only 29 years (most other tech industries never grew to be that big, such as television, personal computers, the internet, etc). So lets take a look at some of the milestones now coming. I have divided this blog into a group of the next 4 years, by year.

MILESTONES COMING IN 2015

This year sees several big milestones we will pass. The mobile handset industry will have its first ever year selling 2 Billion mobile phones (most of them are now smartphones). No consumer tech has ever had that kind of sales levels, not TVs, not PCs, not gaming consoles, not digital cameras, not FM radios, etc. Two Billion sold per year. Thats 5 million phones sold every single day of every week, Saturdays and Sundays included, all the way through all holidays. Thats this industry!

Talking about those handsets and the older PC industry. This year sees the installed base of Android based smartphones grow past 2 Billion in use. Thats more yes than all personal computers including tablets, on all operating systems they use (mostly Windows obviously). This year sees the overall handset (dumbphone and smartphone) installed base pass the level where half are operated by touch-screen (as many 'featurephones' are also touch-screen operated like the Nokia Asha series of featurephones/dumbphones).

And if you are into the smartphone apps industry (mostly a barren desert where if you don't do games, you really won't make much money) then yes, this year we pass the level where 2 Billion people download apps to smartphones. That may seem like a big number until you understand the full mobile industry. Its far smaller than say mobile internet users or cameraphone users or MMS users or gosh, SMS text messaging users. But yeah, nice number, 2 Billion, why not. (for those not knowing the math behind apps, yes its a hopeless barren desert for anyone who isn't a game developer and game developers of course only have a 1 in 10 chance of succeeding. Large user numbers is not much money in apps).

MILESTONES COMING IN 2016

Next up: next year. By 2016 we will see more milestones. For example 3 Billion people will be using mobile search. Yeah. Today there are exactly 3 Billion internet users (and not all of them use search). But by the end of next year, just search users, on mobile, will pass the 3 Billion level. And you doubted Google's interest in mobile, haha.. Its like I teach in my workshops around the world, The Truth Is In The Pocket. At the end of next year 50% of all phones in use on the planet are smartphones.

The balance of SMS text messaging revenues reaches the tipping point, as person-to-person messaging keeps shifting to 'OTT' service providers like Whatsapp, in 2016, half of total SMS revenues worldwide will come from 'premium SMS' ie A2P and P2A (Application to Person, and vice versa) services. What do I mean? Vote for American Idol on TV, get a security code on a web service, pay for a drink on a vending machine, get an airline boarding pass, open a public pay toilet door, get a bus ticket, send a donation to a charity, make a payment, etc etc etc. Oh, and advertising of course, coupons and offers. Premium SMS. Yes, its already twice as big as 'smartphone apps' today and by 2016 premium SMS will be more than half of total SMS revenues globally. And meanwhile back to those phones, the cameraphone active user base hits 5 Billion next year. Yeah, death to the stand-alone camera business.... (BTW the only place on the planet that gives cameraphone and digital camera stats and digital photography stats is my blog, here)

MORE MILESTONES IN 2017

So lets move to 2017. What do we see there? Smartphone sales hit 2 Billion units per year. Yes. Smartphones. Two billion. And PCs only sell about 500 million per year (if tablets like the iPad are included) or 300 million (if tablets are not included). Both PC and tablet sales have stopped growing in any meaningful way, are essentially flat from now on. But smartphone sales, well, they were 1 Billion in 2013 (990 million actually). And will be double that just four years later, in 2017. What a lovely industry if numbers here double every four years haha...

What do we do with our mobiles then? Well, 2017 becomes the first year when mobile 'data' revenues exceed mobile voice revenues globally. Thats a nice shift for us and opens massive opportunities. Talking of those massive opportunities, OTT and SMS. 2017 is the year when OTT instant messaging platforms reach a total user base of 2.7 Billion. Obviously that is not Whatsapp which will be a part of that only. That number, 2.7 Billion again may sound big but in the context of mobile messaging, it really isn't. It is only the half-way point to SMS active user base in 2017 (which will be down a bit from its peak, and be 5.4 Billion active SMS text messaging users in 2017). And to be very clear, Whatsapp today is the most used OTT instant messaging platform that has 700 million users. It is only 1/8 the size of the active user base of SMS text messaging today at 5.6 Billion. Or to put it another way, if you take the total user base of the biggest OTT provider in messaging, Whatsapp, then SMS is merely 8 times larger today. By 2017, maybe SMS will by then only be about 3 or 4 times bigger...

And one more user behavior bit. Internet. Most internet users today access the internet part of the time on a PC (or tablet) and part of the time on a mobile phone (usually smartphone). By 2017, half of the total global internet user base never uses a PC, and accesses the internet only on a mobile. Can you see now why all the majors of the industry are preaching 'mobile first' strategies?

MILESTONES COMING IN 2018

So finally the last year of the Forecast period. What can we look forward to in 2018? The year brings a big milestone for WiFi, as half of all phones in use that year will support WiFi. The average sales price of smartphones falls below 200 dollars in 2018 for the first time ever (with plenty of cheap basic smartphones selling for under 50 dollars but of course also premium smartphones like the iPhones and Galaxies and Xperias will sell in the near 1,000 dollar price levels, so the average is just below 200 dollars, as far more of the cheap phones sell than the very expensive ones).

Android reaches 3 Billion active users just on smartphones (and plenty more on tablets and ultrabooks etc). And of that OS war, I predict in 2018 the market share of new smartphones sold will be Android 82%, iOS is second with 10% and Tizen third with 4%. Firefox has a tiny slice as does Blackberry. Windows if not dead is essentially dead for all practical purposes in smartphones (but Windows of course still holds a big slice of the far smaller PC market even then).

Thats a highlights preview of the next four years. All data in this blog may be freely quoted and used, please list the source as: TomiAhonen Mobile Forecast 2014-2018 and if you can, please do include a link to this blog for more info.. As I said, this is a blog to celebrate my new Forecast just out today. I will return to review the previous Forecast and the mileposts it predicted, how close we got last time. And now about the document itself. The Tomi Ahonen Mobile Forecast 2014-2018 is of course a paid forecast but not one that costs thousands of dollars. As the most accurate forecaster of the industry, I could certainly price it in that kind of range like many of my peers but rather, I am perfectly happy to sell that at 99 Euros as an eBook and great value to my readers and fans. The Forecast is formatted for the smartphone screen so you can carry the pdf ebook in your pocket at all times and have the major numbers of the industry at your fingertips at all times. If you are involved in mobile, no other document is more valuable to you, than the best map to the near future and as such, a 99 Euro price is a modest price to pay so you won't be fooled again into thinking Windows Phone can get 20% market share or smartphone apps will be worth 90 Billion dollars or the other rubbish that charlatans in this industry have been peddling.

So the TomiAhonen Mobile Forecast 2014-2018 has 100 pages of stats and facts and numbers and charts. It makes 109 separate forecasts with 420 individual data points for the years 2015, 2016, 2017 and 2018. There are also five scenarios and five annual snapshots (each with 20 main data points of the most relevant data per year). A full table of contents is visible at the website for the TomiAhonen Mobile Forecast 2014-2018. If you do need numbers for this industry, this is the place where to start.

TABLE OF CONTENTS for TOMIAHONEN MOBILE FORECAST 2014-2018

SIZE OF THE INDUSTRY

 - Mobile subscriptions, unique subscribers, second and third subscriptions

 - Handsets ('terminals') in use actual

 - Mobile industry revenues including voice, messaging and VAS/non-messaging data

 - Hardware revenues

CUSTOMERS

 - Penetration rate per capita, as unique users, and among humans alive over age 10

 - Regional subscribers (for each, Total, Unique and Multiple subs) for 8 regions - North America, West Europe, East Europe, Asia-Pacific Advanced, Asia Developing, Middle East, Africa, and Latin America

 - Active base users: Clock and Alarm, Camera, SMS, Advertising, Voice calls, Web Surfing, OTT IM, TV voting, News & Alerts, Search, Downloading, MMS

HANDSETS OVERALL

 - New handset sales in units, smartphones in units, migration rate

 - Smartphones in use & migration rate

 - Installed base of handsets by ability: MMS capability, Bluetooth, Media player, Camera, Memory card slot, HTML browser, 3G, Java/Brew, WiFi, used handsets (second hand handsets), touch screen

 - Average camera resulution

 - Input method Touch Screen, QWERTY, hybrid and basic

HANDSET MARKET SHARES

 - Market shares of new sales: All handsets, dumbphones, smartphones

 - Smartphone OS Forecast Base Case and 5 scenarios (Tizen upside, Tizen death, Apple expands to lower prices, Blackberry recovery, Microsoft return)

 - Regional OS market shares for 8 regions - North America, West Europe, East Europe, Asia-Pacific Advanced, Asia Developing, Middle East, Africa, and Latin America

MOBILE DATA SERVICES

 - SMS users, traffic, revenues, premium SMS

 - OTT Cannibalization of messaging by traffic and by users

 - MMS users, revenues

 - Mobile VAS (non-messaging premium data) users, revenues

 - Mobile users of internet, PC users of internet, Mobile-only users, PC-only users, Both Mobile & PC users of internet

 - Mobile service revenues for TV & video, mobile social networking, news & alerts, gaming, advertising

SMARTPHONE APPS

 - Consumer app revenues, business app revenues

 - App revenues in context of VAS and messaging revenues

CUSTOMER TYPE

 - Consumer & enterprise/business subscriptions

 - Consumer & enterprise/business smartphones

 - Prepaid vs Postpaid customers

ANNUAL SUMMARY TABLES

 - One page summaries of the most important 20 mobile stats per year for 2014, 2015, 2016, 2017 and 2018

 

This is the best one-source resource for you as a guide into the future. It only costs 99.00 Euros and is available immediately as an ebook download. It is formated for the small screen, so you can carry the TomiAhonen Mobile Forecast 2014-2018 in your pocket, on your iPhone or Android or whatever device. It is in basic PDF format so you can also read it on your other digital devices like your PC, laptop and iPad.

If you are involved in any way in the planning and future of mobile, you need this Forecast. Note it costs a tiny fraction of most other forecasts that often sell for thousands of dollars. But you can trust this, as I have been called the most accurate forecaster of the mobile industry, and I am the father of more theories about this industry than any other expert. My 12 published books are already referenced in more than 140 books by my peers, and Forbes measured me as the most influential expert in mobile. My forecasts are regularly quoted in various global media like the Wall Street Journal, Financial Times, Business Week, the Economist etc, as well as over 500 press mentions in two dozen languages, and I am often seen on TV talking about mobile industry numbers.

 

To see more including full table of contents, please see TomiAhonen Mobile Forecast 2014-2018.

Comments

[Tomi T Ahonen]

(John, I removed the comment as it wasn't related to this topic, ie forecast, it was related to the US Pew stats clearly. Your points were valid, please re-post on the Pew USA topic, we'll discuss it there)

[abdul muis]

@Tomi,

I'm auditing your number... LOL
2015... Android reach 2 Billion user.
2017... smartphone sales more than 2 billion unit
2018... 82% of smartphone is android, 3 billion android.

If a phone is used at least for 2 years ....
2017 alone will have about 1.6 million android sold (80%)
and 2018 maybe 1.8 million android? (80%)

Not to mention that if only 80% android phone that produce in 2016 & 2015 still in use, that might be another 1 billion++??

[abdul muis]

@Tomi

Thanks for the forecast, you so brave, laying forecast for the 4 years. A lot of things can happened in 4 years.

BTW, still auditing your number.....
"in 2018 the market share of new smartphones sold will be Android 82%, iOS is second with 10% and Tizen third with 4%. Firefox has a tiny slice as does Blackberry. Windows if not dead..."

You give Firefox, BB & Windows around 4% market share?? and say that firefox has a tiny slice as does bb. From BB last financial report, they only sold less than 6 million phone for 2014. If in 2018 they sold 4 million phone, it would be only around 0.2% (4 million out of 2 billion) and if firefox is as tiny as BB (0.2%), is that means windows will have 3%+ market share?

[Tomi T Ahonen]

Hi Abdul

Haha, well, first off, if you want to spend the 99 Euros, you'll have all the actual numbers for each year :-)

These are mosty milestones, so each of those years, that level is passed and can be more but the previous year the milestone is not yet hit. Eg the Android installed base in 2017 will be near to, but not hitting 3B..

On the specifics of Firefox, BB, WP in 2018, they are so small a tiny success one way or another can bring a big change for that platform. I am however, expecting Nokia to introduce Android smartphones and that is the death-nail for the 'pretend Nokias' on Windows Phone in those last 'stronghold' Nokia markets where Lumia is still selling in modest numbers. 1% would be remarkably good performance for Windows Phone in 2018, it will DEFINITELY not be 3%. And separately, I am expecting Microsoft to pull the plug on Lumia well before that year has ended haha... so it will be a dying/dead OS well before December 2018 rolls past :-) All the writing is now on the wall, handset makers bailing, app developers bailing, Microsoft itself pushing its apps to Android & iOs etc...

Tomi Ahonen :-)

[abdul muis]

@Tomi

I was wondering how will you count the Windows phone in the future. Is is only for the device sold? Or for download/installed OS? Because Microsoft looks like will abandon selling the device, and will provide downloadable OS for well known device.

here is the video
https://www.youtube.com/watch?v=lTTTFV38G_Q

and.... I'm sorry for reposting this....
(http://communities-dominate.blogs.com/brands/2015/03/my-10-years-taking-selfies-how-has-the-hobby-evolved-a-picture-essay.html?cid=6a00e0097e337c883301b8d0f0b87e970c#comment-6a00e0097e337c883301b8d0f0b87e970c)

In the past few day, Microsoft has been building WINDOWS 10 for a couple of Android device. Namely, XiaoMi Mi4 & ZTE Nubia Z9, and Huawei device. At first, there were a speculation that XiaoMi & ZTE & also huawei will make Windows 10 device, but here is Hugo Barra post on G+ clearing the situation

https://plus.google.com/+HugoBarra/posts/ZEgN5ZsCBeh

Hugo Bara said that XiaoMi didn't make the Win10 device. It was microsoft creating the OS for XiaoMi Mi4 without the help of XiaoMi, and XiaoMi only coorporate with microsoft by letting the software giant to do it officially on XiaoMi forum.

This is interesting, because it seems microsoft will target a favourite device, and making a ROM and hoping some android device will downgrade the OS to Microsoft Windows 10. Something like someone buy a Windows notebook & install Linux by himself.

[Paul Jardine]

I think we are in agreement that personal messaging is moving to IP rather than SMS, but I think tipping point was long ago. We already have more then 70% volume on 'bulk' SMS...BUT..this traffic is *already* shifting off SMS onto Apps. Trend is like bonds! Race to zero yield!

[baron99]

I agree with Tomi about Windows Phone being a dying/dead platform. Its true NO ONE WANTS A WINDOWS PHONE. In fact the technology press is now mocking the windows phone PR nonsensical proclamations of "impressive growth". Just check out:

http://betanews.com/2015/03/01/microsoft-says-windows-phone-experiencing-impressive-growth-wait-what/

Clearly: NO ONE WANTS A WINDOWS PHONE! ...except the astroturfers. ...care to identify yourself.. :-)

[baron99]

More from the world of windows phone ...or, rather, why NO ONE WANTS A WINDOWS PHONE! ....this is an example of how brain dead the people behind WP are:

http://www.forbes.com/sites/marcochiappetta/2015/02/17/microsofts-baffling-move-with-the-windows-10-for-phones-preview/

[Tomi T Ahonen]

hi abdul, Paul and baron

abdul - haha yeah, desperation moves to the extreme there. I will try to provide the most accurate and most useful info as best as I can. I doubt those handset makers will specify any data on Windows variants sold. If their default OS is Android (and Windows versions will be a trivial truly tiny single-digit share of their volume, if that) then all analyst houses will just count them as Android. Its possible we get some OS 'usage' stats perhaps, like Statscounter, which could give a slightly larger user base for Windows than its sales stats - but that 'upside' is FAR far less than the lost users from unsold or nonactivated Windows smartphones as we learned last year, 1/3 of all Windows smartphones were never activated. So its still lost in the noise. If we can get some accurate reliable data and it proves a meaningful factor, of course I will report it... :-) But these are rather obviously desperation moves by Microsoft to salvage SOMETHING out of its 8 billion dollar wasted 'investment' in Nokia unit.. Windows on smartphones is dead.

On Xiaomi users 'wanting' Windows? In CHINA? Where Windows Phone never had any kind of traction and there are almost no apps etc, Xbox ecosystem is illegal, etc, there is no life in that Xiaomi project - other than some geeks who for some bizarre reason like Windows (on the PC). Will never be a million users among all Xiaomi even if X sells 100M units per year.

Paul - you're totally correct on the metric you mention and totally miss the point. TRAFFIC is on OTT by a huge margin already this year (8 to 1 ratio) and shifted past SMS 3 years ago - BUT that is the tiny heavy-user slice who drive that traffic. The USER base is tiny compared to SMS. Its the USER BASE that is RELEVANT to all interested parties - except the mobile operators, and the OTT service provider's investors who want to drive up the nonsense stats to get Billion-dollar exits. Silly stuff. Whatsapp, by FAR the biggest OTT messenger service has only 700M users today. SMS has 5.6 Billion. Which do you use, if you are a doctor's office sending a reminder about your appointment tomorrow? Which do you use if you're a limousine service picking up me at the airport tomorrow? Which do you use if you're the TV station and want viewers to vote? You are not going to piss on 7 out of 8 of the audience! The AUDIENCE, the REACH of SMS is - by FAR the biggest on the planet and will be till 2018 easily and OTT cannot catch up in that time. Eventually yes, it will. I project early in the next decade is when that happens.. The traffic is utterly meaningless (as there is no revenue to it). The only ones outside of OTT service investors - who care about OTT are the telcos who lose SMS revenues and profit. That was baked into the 3G business case from 2001 and operators have been bewildered how LONG the life was for SMS. OTT type IM was supposed to devastate SMS by 2005 haha. Yes, they had 10 years of extra life out of SMS. So the 'crying' is pretty much for the cameras, they smile inside knowing how huge a windfall profit they found out of SMS because OTT took so long to materialize.

baron - haha that article is I think about a month old? yeah, we discussed that silly MS desperation strategy here on the blog I think in the comments (and I did on Twitter) at the time. Totally bogus brands as he says in the article. As 9 out of the Top 12 smartphone brands have been with Windows and only 1 out of those now remains, whatever they manage to get in those 'top 200' size 'competitors' will not - 25 of them combined - add up to one lost LG or Sony or ZTE haha. Totally typical Microsoft Bullshit Brigade propaganda and lies. As we've seen they have done all the very existence of Windows Phone, from 'Brits are tiring of the iPhone' to 'Lumia is huge hit in America' to 'Windows outselling iPhone in China' to the rest of the BS fake 'news' with never any real numbers.

As I said on Twitter today, every day that I get to report more bad news about Microsoft is a good day in my house. There is increasingly more of that in tech as we can see..

Tomi Ahonen :-)

[Tomi T Ahonen]

(AndThis - removed your comment obviously, as I clearly said in the blog, I will be reviewing that forecast from 3 years ago. We'll discuss it there and then.)

[Tomi T Ahonen]

Baron95 - good question and no, I don't see anyting now in play that could be a disruptor in the way like iPhone was from 2007 or iPad threatened to be.. or previously the short-lived but dramatic disruptions that MVNOs brought to telcos. And on this time scale something not yet rolling won't make scale in time like smart watches but you know my view on those already.

Apple will keep trying the virtual SIM, it is very much in their interest and the carriers will block that. The Google MVNO thrat was kinda real (but obviously they limited it - at least for now - to data-only type of uses). Apart from Google and Apple only Samsung has the scale to try something like that, I think they are dependent enough on the carriers that they wouldn't even dare suggest this to their channel haha.

Skype and OTT messaging yes it has its slice that is growing but very few people can go totally without a cellular connection because Skype via WiFi won't allow 'Reachability' ie the device then fails the 'ringing in the pocket' test. Its like putting a horse to pull your car, the smartphone but without cellular is no longer a 'mobile' and is only now an expensive ultraportable. Their chances of success can be seen with the end of the iPod Touch the last such device to try to find a business and only the American market gave that gadget any success because well, USA archaic market haha. But as the SECOND device (which may have vast majority of actual use) yes, it can be a compelling offering. And some who aren't yet addicted ie haven't discovered Reachability will not see any difference and can easily go with WiFi, Skype, Whatsapp. Its like giving someone who never had cable TV only broadcast TV. That person won't even know what he/she is missing.

The kind of stats like number of people interacting with wearables is the 'shiny thing' but utterly irrelevant in the big picure of mobile in the next 4 years. Utterly irrelevant. I deal with the industry, the business, how to make money. So I have a forecast about mobile news another about mobile gaming another about mobile advertising. These totally dwarf the total wearable market in one year, what wearables sell in units AND services in the next four years. So yeah, 109 forecasts, these are the significant issues, not the new 'shiny things' that techies love but for the industry are utterly irrelevant. Even GPS location based maps, mobile education, mobile healtcare are TOO SMALL - each a multi-billion dollar annual industry sector - too small to be worth discussing in the 109 forecasts because it would mean I have to dump say MMS or mobile search or premium SMS or cameraphones - truly giant industrie slices far larger than say global music industry (not 'mobile' music) or global cinema box office or total DVD sales movies and TV box sets, etc....

LTE again haha, far too small to matter. Today half of mobile phone subscribers on the planet are not even on 3G yet.. Eventually I will but not in this period, too small.

Tomi Ahonen :-)

[John Phamlore]

@Tomi,

Let's take these sentences you wrote above:

"What can we look forward to in 2018? The year brings a big milestone for WiFi, as half of all phones in use that year will support WiFi."

Only half of phones in 2018 will support WiFi?

I don't understand this methodology of what you are trying to predict. Given that tablets aren't exactly a growth segment and they are WiFi devices, isn't this evidence WiFi is relatively unimportant? How's WiFi connectivity supposed to happen in huge areas of the world with relatively underdeveloped infrastructure?

Why aren't you advising your clients to ignore WiFi as an unimportant technology based on data such as the Pew survey which show in the United States that young people who own smartphones that are fully capable of using WiFi nonetheless are running up against data caps that inhibit their desired use of their phones, this in a country where in theory there should be plenty of WiFi hotspots? Isn't your message that mobile, which is constant connectivity, is everything? Doesn't it follow that WiFi must be an inferior technology to mobile as your observations are actually showing?

By the way, I predicted four-plus years ago here that WiFi-like solutions were inferior and would lose to mobile solutions, and that a major company that attempted to embrace an enhanced WiFi-like solution would see the almost total destruction of their mobile consumer device business.

[John Phamlore]

@Tomi,

Let's try and re-phrase what I think your observations are showing that can give advice to your clients they can act on:

Mobile let's you communicate with your customers anywhere, anytime. Do so in a data-efficient manner to carefully targeted audiences.

That ties together your observations about the importance of SMS, because SMS is the most data-efficient and time-efficient manner of quickly communicating over mobile to customers in a respectful manner that in the end thus makes money for you.

That also explains your prediction than ONLY half of phones by 2018, a relative eternity away from now, will have WiFi capabilities. For most businesses taking best advantage of mobile will not involve data-intensive services such as video. WiFi is tangential to the main benefits of mobile, it is a sideshow for most areas of the world.

[Paul Jardine]

Tomi, the point I'm trying to make is that even these business SMS are moving to apps. Currently 70% of traffic is these business SMS and it is low revenue (though network is already there so might as well use it). Some of our customers buy a Billion at a time - but for how long? Even if they buy the next billion it will be half the cost to them.
I do take your point about the doom being predicted in 2005, it is definitely taking longer than predicted. My view is that operators should embrace the IP delivery and build integrated platforms for message delivery rather than milk the cash cow till it expires!

[Tomi T Ahonen]

Responses..

LeeBase - haha thats what I like about you, you aren't afraid to post numbers. This blog will most definitely be one of the most re-read articles on the blog in coming 4 years, so we'll get plenty of a chance to remember and return to the numbers.

I agree on the potential deaths. Also Apple could well be 12% by 2018, thats by no means beyond plausible, but I happen to think it will be 10% (in the Forecast I also have an up-side Apple scenario if they decide to pursue lower-priced models into 300 - 400 dollar range but something I have to leave to those of my customers who buy the full forecast, so sorry, I can't give that scenario out here into the public domain. Incidentially, I also have a Windows recovery scenario - which I say is the least likely of the 5 scenarios I paint..)

Yeah on Windows smartphones. I expect Windows to fall to 5th by 2018 if its still alive. A massive death-nail to Windows is when Nokia return, on Android. That will signal to all those loyal Nokia owners that Microsoft is fake Nokia and real Nokia runs on Android. What 'good will' type of sales they now get to hit that approx 3% will be demolished then. But the utter humilation is when Tizen passes Windows Phone/Windows 10 smartphone sales. I can't see Nadella letting Windows suck his resources into the endless pit of despair, if Tizen can zoom right past them. Could happen as early as next year if Sammy is hungry. We'll have a good idea of that around November or February.

John - I thought you knew, you've been here that long that I thought you picked up on it, WiFi is a small minority of all phones in use today. Even all new smartphones sold today do not have WiFi. The low price end to a very large degree doesn't include WiFi (yet). But that moment is coming, that is exactly why I listed the milestone. 2 Billion WiFi enabled mobile phones will be more than TOTAL personal computer installed base today when Tablets are included.

As to 'why don't you teach your clients' haha, yeah.. maybe. But that is not the purpose of this document and this blog. I make my arguments (often) about what 'should' happen in mobile, but then I try to be totally professional about the statistics and numbers, without the propaganda (except, obviously, I take great delight now that Windows is clearly dying). So this is a forecast of what I believe, as a professional expert, statistician and forecaster for this industry, of what WILL happen, not what I'd like to happen haha..

On the youth in the Pew study (I really appreciate it that you read it so thoroughly and picked up on those things) yes, youth often hit data plan limits. One, this is the USA, where the carriers screw their customers every which way. Two, WiFi use is not mutually exclusive to cellular LTE data use. Almost definitely those kids use WiFi a lot, when they come to a friend's house the first thing they ask for from the parents is what is the household WiFi password... Schools, libraries, various clubs etc, will have WiFi and the youth are SUPERBLY capable of dissemninating the info of any free WiFi hotspots and learn the 'rules' like how long they can sit on one cup of tea before the coffee shop owner tells them to buy another or leave... etc. And tat brings me to Three: it its as bad as you say, youth kicked out of cellular LTE connections due to price, then WiFi is almost the only alternative. It STRENGTHENS the need for talking about WiFi..

Paul - haha, ok. I trust you really do believe that. Funny thing is that yesterday at the airport I was surfing for my usual search of interesting mobile stats and found a totally fresh Apr 2 released finding of business execs interviewed in the USA, Europe and Asia about what they do in mobile. All are INCREASING their involvement with SMS and its the most widely used method already for corporations to communicate with their customers via mobile. So sorry, the OPPOSITE is true. We've seen the steps leading up to this for a few years now, as various mobile industry associations from the MDA and MMA and MoMo on have been urging enterprises, businesses, corporations, government departments etc to set SMS as the top priority in how to communicate - and in parallel, studies saying consumers WANT it (via SMS). That there is a huge gap between what consumers want and businesses offer them. Like sending SMS reminders to hairdressers, dentists etc appointments, or the parcel delivery company sending an alert via SMS when your package is being delivered etc. Consumers WANT this, businesses have been VERY slow delivering but they ARE doing it now. I'll get to that study later at some point, but its not a high priority for me now, many urgent things need to be discussed before that...

To be clear, nothing wrong with a train operator or fast food chain or clothing store chain etc using MANY tech in mobile, from QR codes to NFC to Bluetooth to MMS to smartphone apps to AR etc etc etc - as long as they do SMS first. Like Mondelez ie Kraft Foods said a few years ago: Leave no phone behind. It starts with SMS. So says the planet's biggest advertiser, Coca Cola. So say all the major gurus in mobile marketing. It starts with SMS. After you reach every pocket, then build the cool stuff on top of that. But it starts with SMS.

Tomi Ahonen :-)

[Paul Jardine]

Ok, on that we can agree, it starts with SMS. Perhaps the market I'm in is more mature, but the major SMS buyers are definitely trying to move their customers onto apps instead of SMS. No phone/customer left behind - they will still maintain some SMS capability but the operators should not be providing the platforms to enable the movement OFF SMS, not just riding the wave till it crashes on the beach! Your priority is predicting the numbers, and you may be right that it will still increase (though with lower revenue) for the next few years, my priority is to see where the operator revenue is going to come from in the longer term, and it's unlikely to be SMS!
If you ever get to Ethiopia, drop me a mail and I'll come over with a bottle of Lagavulin for further discussion! :)

[baron99]

Apple fans please meet some Microsoft astroturfers/trolls pretending to work at an apple store. You can't make this stuff up! You can't help being truly embarrassed for pathetic Microsoft. How low can Microsoft sink? The video says it all. You can watch the video at:

http://www.cnet.com/au/news/this-is-what-happens-when-an-apple-store-employee-tries-to-sell-you-a-microsoft-surface/

I notice the text of the article mentions "Samsung" for some strange reason (which is NOT true!). Watch the video. It is ALL Microsoft.

...AND, of course NO ONE WANTS A WINDOWS PHONE! ...except those still waiting for Moore's law (that was just too funny - there should be an award for such stupidity). :-)

[John Phamlore]

@Tomi,

You are aware, I hope, that Tizen has been repositioned as one of Samsung's operating systems for the Internet of Things (IoT)? Telling your clients Tizen is a mobile smartphone operating system is like reading someone a three-year old newspaper.

Don't take my word for it, read what say Mingi Hyun of Corporate Communications, Samsung Electronics has to write:

http://global.samsungtomorrow.com/tizen-in-the-big-picture/

"Tizen constitutes a large and important part of our Internet of Things (IoT) strategy that encompasses all device categories across the company. BK Yoon, the company’s CEO, announced last week at the 2015 International Consumer Electronics Show (CES) that all Samsung devices will be IoT-ready in five years. Many of these devices will be running Tizen ...

Because it is lightweight, Tizen is optimal for use across a wide spectrum of smart connected devices in the IoT space. While devices with high demand for computing power, such as smartphones and TVs, are part of the IoT, so are devices that require relatively less computing power, such as wearables, vacuum cleaners and washing machines, which need an operating system like Tizen that is lightweight enough to run the devices without burning through processing power, memory and overall device performance."

There's a reason the more visible consumer products using Tizen from Samsung have been smartwatches, and the above indicates why, since the need for power conservation in a smartwatch form factor is even more critical than in phones.

I predicted all of this years ago here due to my understanding of how Qualcomm would win the mobile smartphone wireless chipset wars. I noted that Tizen was really "Oppose Qualcomm Forever" in direct analogy to the Unix wars where OSF was essentially Oppose Sun Forever, and I correctly predicted Oppose Qualcomm Forever would have about the same success of an alliance such as OSF, that is, none.

[Tomi T Ahonen]

Good one Baron95 yes you did say that (although the jury is still out)

Paul - fair and I also totally agree SMS is not enough, any smart (large) organization should expand rapidly to take advanteage of the unprecedented power of mobile. For a mom-and-pop company though, SMS might be enough for their little CRM maybe adding a little mobile website to it. Over time it will shift to ever more 'beyond SMS' but I had a brilliant reminder again about how we have to thing broadly when I spoke in Nigeria last year and one lady speaking after me from Liberia said that Tomi's point about SMS is not really valid because in their country even SMS is the future, they have so much illiteracy (and numeracy) that SMS is not for people in the villages and rural areas haha... Yeah, parts of the world still see SMS as the next big thing of high tech haha

Baron on the operators threatened - yeah they are, I don't see anything now really lurking dangerously except Apple's virtual SIM but it could come fast and obviously train operators didn't notice airplanes stealing their lucrative premium human travel biz haha... We'll see. And if the operator loses the subscriber, they also lose the game and become bitpipes bidding for lowest price to wholesale buyers like Apple, Google etc. Thats their death scenario.

John yes I am aware of that and I think it means more resources for Tizen and that Tizen won't be shut down anytime soon. I think it does signal short to mid term that Sammy will keop Android as the premium OS and Tizen as low-cost OS (once again executing an old Nokia strategy as it was supposed to be with MeeGo and Symbian). You know the forecast only assumes 1 in 4 Samsung smarthpones to run on Tizen in 2018...

Tomi Ahonen :-)

[baron99]

I agree with you Tomi that The PR from Microsoft is "Totally typical Microsoft Bullshit Brigade propaganda and lies."

It seems even with a new CEO things haven't changed much from 2001 when the Minnesota Attorney General Mike Hatch referred to their activities as "It's sleazy," Hatch said. "This is not a company that appears to be bothered by ethical boundaries." (http://community.seattletimes.nwsource.com/archive/?date=20010823&slug=microlob23).

Their same ethical behavior is on currently display today at CNET with a video that I referred to earlier at: http://www.cnet.com/au/news/this-is-what-happens-when-an-apple-store-employee-tries-to-sell-you-a-microsoft-surface/

The apparent trend is that microsoft is getting increasingly ridiculed by posts on many articles where writers and astroturfer minions attempt to defend their PR nonsense. Most people see them for what they are (BS merchants). Word of mouth is very powerful in the tech world where the non-techies seek out knowledgeable advice and get consistently steered away from Microsoft products. That's why WP is doomed ...because NO ONE WANTS A WINDOWS PHONE.