Communities Dominate Brands

Twenty Years of Digital Convergence Around Mobile: What can we learn from the Cannibal of Cannibals?

Its now twenty years from the first fixed-mobile service bundle which launched the whole revolution of digital convergence centered around mobile. There had been digital convergence prior to mobile already on the fixed-landline-internet side but digital convergence without mobile would be... pretty pointless by now. Anything we now look at, from Big Data to IoT to Augmented Reality to Cloud Computing etc is dependent on a mobile convergence element. So lets take a stroll back through recent mobile tech history and see how we got here and where we are now going.

MOBILE GOBBLED UP THE TELEPHONE CALLS

For mobile its first convergence started with 'fixed' telecoms. I led that project back at Elisa/Helsinki Telephone with Radiolinja and Finnet Group when my product 999 international calling services were deployed to run on both fixed networks (where most users were and most money was) and the emerging radical new way to use telephones, the mobile networks (where the growth was and where usage and money would then migrate). Back twenty years ago many 'experts' said 'that will never happen in mobile' on things like 'most normal consumer would use it' and nobody - not even me - thought mobile could supplant the fixed network and replace those services. I saw it as a secondary communications channel but one that had enormous growth rates. Only two years later we would see mobile subscription rates match and then grow past fixed landline rates in Finland and then that what seemed unbelievable, the usage of fixed landline started to decline. Young people started to shift to 'only mobile' use and we saw households start to abandon landline connections.

A decade followed of unhappy co-existence of landline alongside mobile. Many thought that the affluent clients, major business/enterprise customers and larger households would hold onto landlines (wrong) and that the internet connection to the homes via landline would hold the landline business (wrong). Also the convergence on the landline side to cable TV would sustain the fixed landline (wrong). That was a bit like throwing an anchor to a drowning man, it only pulled the fixed landline more into the abyss. Many telecoms operators/carriers made their strategic choices in that world, and a few made colossal mistakes like AT&T in the USA and BT in the UK selling their mobile arms which became far bigger and in the case of AT&T would later come back to buy the former parent. The landline telecoms business connected at its peak nearly 1.3 Billion households with a reach to about half of the planet's population near about 3.4 Billion people. That passed and now the fixed landline business is in decline. The peak revenue for the fixed landline business hit about 700 Billion dollars of which over a third was in international calls. Skype and mobile international calls plus newer communcation methods like mobile messaging wiped out most of that profitable business.

When I observe 'what I caused' haha, I think that fixed landline telecoms business will not die out, it will just shrink to a more specialized business-oriented service range. Some back-haul services and connections run on the landline backbones of telecoms operators. So a 'wholesale' telecoms grid service is needed and it needs to be robust with high capacity and it needs to connect things like mobile networking backhaul to cellular network towers; and across networks, across oceans and provide basic infrastructure connectivity. For some 'mass telephone' businesses like calling centers, they would typically be operated in a 'telephone farm' where users would be on some kind of landline connectivity (probably, into perpetuity). It is a bit like the contest between railroads and airlines. Most of the profitable human consumer travel went to the faster and more convenient air travel (in long haul) and trains would carry more the cargo loads of business, but railroads still provide a useful valuable and modestly profitable transport service. And in some local niche uses - short distance travel - railroads can do a better job than airplanes (currently) can like train travel in cities for suburban and near town residents - as long as the railroad tracks have already been laid in the past and you don't have to build a new railroad (similar to how if an existing telecoms backhaul line already exists in that town to that block of buildings, then it can be well utilized). And in some cases high speed rail can then attempt to compete with air travel like many high speed train projects around the world but these would typically then require a 'very' busy travel corridoor of suitable distance like say Tokyo-Osaka or London-Paris etc and even then high speed rail can only achieve rough parity to the human consumer travel experience vs cheap air travel and at least currently nobody seriously suggests high speed rail would challenge air travel for global travel supremacy. I do think mobile vs fixed contest will mimick closely this parallel with trains and planes. The vast majority of consumer/human calls and telecoms traffic will live on mobile but fixed landline business will not die out, it will just continue to shrink in proportion and will soon become only a niche specialized service for a few industries (calling centers) and 'cargo loads' like backhaul for mobile networks.

Back twenty years ago when I proposed doing our convergence project where I suggested my international calls (on fixed landline) would be merged with Finland domestic long distance calls (on fixed landline) and then both of those two to be also merged with mobile - my bosses were initially skeptical and I did have to do a series of calculations and show recent data and projections to show this will become 'meaningful enough' to make it worth doing. At that point Finland led the world in mobile adoption rate (at about 35%) and it was by no means obvious Finland would ever reach the same level of mobile penetration rate as the 'mature fully deployed landline penetration' which was at over 60% per capita and Finland had reached 'all household' connectivity for landlines (in reality a little below 99% of all households). Just two years later Finland would become the first country where mobile subscription penetration rate passed the landline penetration rate. In terms of timing, it was 'the' perfect time to go into this type of convegence and looking back, gosh it seems 'obvious'. Yet it was not. Most contemporary experts back twenty years ago were certain mobile would 'never' match fixed landline in its reach and penetration rates. When I think back, I would draw the lesson that at some point future growth is purely a 'gamble' and a big risk indeed (VR, drones, wearables etc) but if a given technology does take off and grows, at some point it becomes an 'inevitable' type of trend which we can see now in things like smartphones, the mobile internet, mobile payments etc. And then there will be a MASSIVE echo chamber of 'experts' who will insist - this can never happen. Like we've now heard how many said 'cameras on smartphones will never replace 'real' cameras. 'A wedding photographer will not show up using a cameraphone' etc. Or that plastic will not lose to mobile money or the internet on tablets and PCs will easily defeat the puny little clumsy expensive slow internet of mobile phones. Hahahaha yeah.

MOBILE AND MEDIA CONTENT

That was voice calls. We saw a similar shift to mobile with messaging, SMS text messaging which many thought would never take off, and others thought SMS would be only a tiny niche slice in the shadow of the mighty email messaging technology already widely deployed. Yeah. We all know how that went. But beyond communication methods, mobile would start to cannibalize other types of services. The immediate next target was media content. News, games, music, movies, TV shows, etc. Media. Early mobile phones of the 1980s and 1990s could not do media downloads. Then came SMS text messaging and some basic messages could be sent, such as Finnish newspaper Aamulehti started its headline news service via SMS. But the revolution came when media content could be delivered as paid media. That was the invention by Saunalahti in Finland in 1998 and the first paid downloaded content onto mobile phones was the basic humble ringing tone. We now laugh at that concept and find it quaint and just a flash moment of history but it bears remembering first, that everybody laughed at ringing tones. They insisted that Apple's new iPod and iTunes would be the obvious way that digital music would go and grow (how wrong they were). During the 2000s decade ringing tones would far outshine iTunes and artists like 50 Cent would celebrate how much more money they made out of mobile than they did out of CD sales or out of other digital sales like iTunes and MP3 sales on other music stores. Why was this? Because ringing tones could be sold to nearly every phone and the reach meant literally now several Billion people. As far back as year 2005 the mobile networks reached 2 Billion humans (today the human subscription reach is 7.4 Billion) and if the iPod could reach 100 million around the same time then we can see the obvious discrepancy. It was simply a matter of scale. Were it not for more advanced music FORMATS created and deployed for mobile (MP3 files and music videos) then today we'd still have a massive empire also around ringing tones.

But from ringing tones we get a second incredibly valuable lesson in mobile cannibalization, and that is that of the drug dealer addiction model. Once we start to do something on mobile, we never go back. We can go 'deeper' into mobile - SMS text messaging users now shifting to Whatsapp for example - but there is no going back. We don't go back from having music on mobile, to carrying a separate MP3 player like an iPod again. It got so bad, that Apple had to release its own musicphone to fight for this market - that phone of course became the iPhone and Apple, a company that in the 1990s had been on the brink of bankruptcy, now powered by mobile, in 20 years, became the richest company in human economic history. This now gives us a valuable 'thought model' for mobile: mobile always wins. If it was a stand-alone PDA that competed against the 'smartphone' - mobile always wins. If it was the GoPro stand-alone camera or the cameraphone - the mobile always wins. If its the TomTom navigator GPS device or the mobile phone navigation - mobile always wins. If its music, gaming, news, advertising - money - mobile... always.... wins. We saw it with tablets. A race of tablet-sized laptop PCs vs phablet-sized smartphones and who won? It wasn't even close! Mobile always wins. If we now think into the future, wearables (Apple Watch haha) or VR headsets (Oculus) vs say Augmented Reality (see Pokemon Go) or say bitcoins and Paypal vs mobile payments - it is that same rule: mobile ALWAYS wins.

SEE THE SIGN-POSTS

So then lets see the 'signs' of what we can learn from the domination of mobile media. The very first sign was 'launch'. It was possible to download music to a phone in 1998 or it was possible to download a news television clip to a mobile phone in 2001 or it was possible to download Angry Birds etc. That is the first step, someone deploys that new tech. That is just the start. Then we monitor. Next big milestone is 'major brands' join in. So we see The BBC iPlayer, CNN's iReport and so forth. A period of big 'argument' ensues of will this particular tech win or lose and what are the alternatives. Another big milestone is when one of the industry leaders declares, mobile will be the biggest revenue source (for that sector). We heard this first from Electronic Arts saying about mobile gaming. But majors like Warner Music said that soon thereafter about music and the BBC said about TV and radio content, etc. And then we get the first casualty, the proverbial 'Canary in the Coal Mine'. When one of the legacy brands dies and blames explicitly mobile for its death. This we saw with the Finnish daily business newspaper Taloussanomat which was the first to end printing the paper edition which stated explicitly, the reason for their demise was mobile. As this happens, we will then witness the big data shifts. TV viewership shifts to mobile. Newspaper readership shifts to mobile. Music, gaming, movies etc all shift to ever more mobile. For that we see then the 'maturing' of the industry, where the industry learns not to 'repurpose' existing content to the new media, but to create original content that suits the new media. We heard this first from MTV when they started to teach that a mobile screen needs a separate TV crew, and MTV started to use two separately-trained TV crews to shoot the same MTV programming like Jackass and MTV Music Video Awards etc. One crew shoots for the big screen (TV and PC screens) and the other crew shoots the same show but for the small screen of mobile. This is what I was writing about in my book Mobile as 7th of the Mass Media and we just heard last year that the NBA basketball league has adopted this way to shoot their games now - because so many watch on mobile phones and their experience watching TV content on a mobile is not as good, as a purpose-shot 'mobile optimized' content stream direct from the NBA.

With all this, lets not plot out the 'death' of legacy media. Back when cinema appeared many thought movies would kill books. Then when radio appeared, they thought radio would kill the music recording industry. When TV appeared, they feared TV would kill cinema (and kill radio and kill newspapers and books). And with the internet, the internet was feared it might kill off radio, recordings, cinema, print and TV. But all survived. They adjust. Yes the PEAK may be past. It seems like we have just see the peak of TV as a media power and it is now starting its decline into second place as mobile grows in power, but I am not foreseeing an end to print or radio or cinema or TV. Mobile still grows in power but the other media will also continue, in perhaps a more diminished role yes, but they are not about to die out. But some individual brands and titles and shows and formats will not survive. One that is really truly past its prime is "reading yesterday's news today" ie the newspaper industry. Printed papers and magazines and catalogs and books and brochures will have a place far into the future but 'newspapers'? That have YESTERDAY's news? That is an idea that is about as relevant as the Zeppelin is to air travel or a steam engine to power a train. Newspaper brands need to rush their transitions to mobile because a printed paper newspaper concept will not have many years left and trying to live on that model.

AND THEN CAME ADVERTISING

Where there is media, there is advertising. And sure enough, almost as soon as the first content became available on mobile, we then saw advertising on it. I chaired the world's first conference on mobile advertising and saw that stream 'join' into our expanding range of digital convergence around mobile. The first advertising-sponsored media content downloaded to mobile was the daily news by MainosTV3 in Finland delivered by SMS from today's TV news headlines, and sponsored by advertising (the last 20 characters of the 180 character SMS text messages were the brief message from the sponsor). It was an opt-in daily news headline service that launched this aspect to mobile content and media. The very early reaction to mobile ads was 'I hate it, I hope it never succeeds' and 'I would never agree to it'. Yeah. Fast-forward 17 years and today mobile advertising reaches over 5 Billion humans and nobody thinks twice about the ad that is briefly seen before we get to watch that clip on YouTube we wanted to see on our smartphone. Mobile advertising alone is a 40 Billion dollar industry worldwide and is growing by leaps and bounds. It should be noted that the 'similar' digital online advertising world has stopped growing. And that is where I just last week posted the shock blog article about Adidas the sporting brand declaring they will end TV advertising because their youth audience is glued to their smartphone screens.

Here in advertising we see the same pattern as with mobile media overall. First it was some experimentation. Then big brands come in. We see major advertising agencies like Ogilvy and Mather, or Saatchi and Saatchi get into mobile. We see major global brands like Coca Cola, Nike, Ford and MacDonalds do mobile. Then we see big legacy telecoms and tech brands make their big 'plays' into that area like NTT DoCoMo of Japan setting up a joint ad company with Japan's biggest advertising agency Dentsu, or Google buying the biggest mobile ad platform Admob. And then its just a matter of time. Ford suddenly announces that they will no longer do any ad campaigns that do NOT include mobile. It does not mean 'only mobile' but it means always including mobile. Then we hear from WPP (world's largest advertising group) and their China head who say in China all advertising is mobile-first but if you don't have a big budget, you go mobile-only. (Wow?). And now: Adidas. Advertising is a 500 Billion dollar industry where TV, radio, print, outdoor etc legacy ad format revenues are flat or declining. Digital on the PC side has stopped growing. But mobile forms nearly 10% of the total global ad revenues and mobile keeps growing at break-neck speeds. And mobile took a company that didn't know HOW it might make money, an obscure search-engine internet company, and powered it to become the second most valuable company on the planet in barely more than 10 years since they uttered the words 'the internet will go mobile'. Google is also the world's largest advertising company if we counted advertising as their main revenue source (which it is while they would like to be known as a search engine company and internet company rather than an ad platform).

Mobile always wins. At some point Google noticed that what they can make money on, in their primary business back then of the search engine - was advertising. Then they bought Admob at some stage and today their vast empire in digital from YouTube to Gmail to Google Maps to Android is all of course aimed at winning the mobile ad wars (and collecting the data we generate to better target those ads). When Google uses me in their workshops and seminars, I am there to help various local companies and advertisers understand why mobile is different and what are the unique abilities of mobile. Google understood that very early on, that mobile is different from the internet and to succeed in mobile, you have to mobile-optimize. But this is a tough lesson to learn for all who join in, or are absorbed into the digital convergence story. Like now those involved in mobile money

MOBILE MONEY IS 20 YEARS OLD AS WELL

So lets talk money! Many experts in digital, if asked about mobile payments, will sing songs of Bitcoins, of Apple Pay and of how Starbucks does its mobile wallet. They may remember to mention M-Pesa out of Kenya. But like with so many areas of digital convergence the knowhow seems to have started at Apple as if there was nothing before it. Mobile payments are literally two decades of age. The world's first opportunity to pay by mobile phone was in Finland when Coca Cola set up two vending machines that accepted payment by SMS text message. Instead of inserting coins into the vending machine or your credit card, you could just send a message from your phone to a specific number. And moments later you hear the 'clonk-clonk' sound of the can of Coke bouncing around inside the vending machine and your cold beverage drops out from the bottom. And three weeks later when you see your phone bill, it will include a line of one Coca Cola purchase at Helsinki Airport which was then deducted from your phone account (or added to your monthly bill which now becomes payable). What a wonderful simple indeed magical solution to the situation we have all been in - I'm thirsty but I don't happen to have the coins right now to pay...  Oh, and is this worthwhile for Coca Cola? They found that wherever they deploy mobile payments, they get 14% more money out of the same vending machine! 14% more business simply when you deploy mobile money! How brilliant is that?

This obsession with Apple Pay and Bitcoins and Paypal is silly to me. Paypal has just passed 200 million users, which if you are a tiny internet-industry player, that may seem like a big number. Not until you compare to mobile payments. A Visa study last year found that just inside Europe, 54% of Europeans pay by mobile. In Europe ALONE the mobile payments user base is larger than global Paypal !!! As I reported on this blog one month ago, we've passed the point where more people use mobile payments than use a credit card, and mobile payments is just catching up to the total number of humans who have a bank account right now (will pass that number within a year from now). Yes. There are.... 2.5 BILLION humans who use mobile payments. That is not Apple Pay, gosh that is not Paypal and darn it, nowhere nowhere nowhere near that is not Bitcoins! What is mobile payment? 54% of the total mobile payments processed last year were handled via SMS payments! What is number two? Not a mobile wallet like Starbucks or Apple Pay! Number two is WAP Billing ie carrier billing! If you do mobile payments you have to understand such concepts as QR codes and USSD. But lets dig into this cannibalization of money. When mobile and money collided, what happened? Well? As I said, mobile. ALWAYS. Wins.

What do we see? We see the same signs. Some major brands are doing mobile payments. Did you see Danske Bank of Denmark and their Mobile Pay? Its their mobile banking solution which lets you pay people from mobile to mobile if they also have a Mobile Pay account (and 3.4 million people or 61% 30% of Danish population are already users) but get this - if you don't have a Danske Bank Mobile Pay account, the money can be sent.. by SMS text message (duh!). So anybody can be paid by Mobile Pay. (Thank you to reader Elo Larsen for user updated data.) This is the smart way to do mobile money. Not a 'walled garden' approach where ONLY those inside Apple Pay walls can be paid. Rather the smart mobile 'inclusive' way where anybody can be paid. So we have tons of major banking and money players getting involved in mobile from Visa to yes Paypal. Then we have other brands like say Coca Cola whose latest innovation is the Coke Play loyalty program and virtual money system by which you can now use Coca Cola Coke Play points to pay for things like videogames and music downloads or to pay for telecoms air time. Yes, Coca Cola has created its own branded currency already. Mobile is on the way to kill cash!

Talking about killing cash. We've chronicled on this blog the steps again. Estonia was first. In parking. They had a string of parking-related crime powered by cash. So they changed the laws and made parking payments impossible with cash. As every Estonian has a mobile phone anyway, lets accept mobile payments (and other digital payments) for parking but no more cash. And the parking-crime-spree ended. But notice - an INDUSTRY in one country, has abandoned cash already. Not killed by Paypal or Bitcoin or Apple Pay or plastic. Killed by mobile money. Next up was Sweden. In Sweden similar crime-related issue with bus tickets. So they stopped the handling of cash by bus drivers. You can buy your ticket many ways, most use mobile to pay of course, and Swedish busses no longer accept cash. But most tickets paid by mobile. Mobile. Always. Wins.

And where next? Now lets go to Malaysia. In Kuala Lumpur's giant KLIA 2 airport where Air Asia has its home base, they stopped human check-in counters last year. Yes. You can fly with Air Asia. You can buy your ticket on mobile or the internet or from a travel agent. But if you try to do check-in at the airport, there is no counter to handle the paper ticket processing. So how do you get onboard the discount airline airplanes? You either go to the ticket machines and handle your boarding pass ticket processing there, at the airport. Or you print out the paper documentation of your online ticket purchase and show the paper. Or do what most Malaysians do, you just process the boarding pass onto your phone. Show the QR code boarding pass at the airport and you're set. Easy-peasy. I was doing a non-scientific count at two counters at the airport last Autumn and figured that about 1 in 10 had a paper-printed ticket from a ticketing machine; about 1 in 20 had a paper-printed traditional printer-ticket (online ticket purchase and print-out for example at hotel lobby) these were ONLY foreigner Westerners who showed up with such pieces of paper haha. And all the rest, about say 17 out of every 20 passengers just showed their mobile phones at the boarding gate to the Air Asia flights.

This is the same story again. We see first mobile becomes possible to do something (to pay). Then we see major brands in payments get involved like Danske Bank and Visa; and we see major brands outside of banking/payments get involved like Vodafone with M-Pesa in Kenya or Apple with Apple Pay. We see other brands use the technology like Coca Cola. And all at once, we start to see the 'end is coming'. Slowly but surely some areas stop using the old way. You can't use cash anymore to pay for parking or bus tickets and then you can't do check in anymore with a human being either, but all is happily handled through mobile. We saw this movie with mobile media, with gaming, with music, with news. We saw this movie before, with mobile advertising. Now it is playing again, with a new lead actor but the plot is the same. New actor for James Bond but we know who will be alive at the end. Mobile. Always. Wins. So look at another airline. Finnair invented mobile check-in 16 years ago. How has that evolved. Now Finnair uses its intelligent and automated customer service system to offer paid upgrades to its frequent fliers, to move them from Economy Class seats to Business Class seats on selected flights and in order of priority by status in the frequent flier plan. How successful is that? 23% of all Finnair Plus passengers who have been offered a self-service paid upgrade, have already paid to upgrade themselves to Business Class on a flight! Now we have mobile doing what it does best. It does something that was not possible before. In this case, powered by mobile, money is SELLING our seats.

This is how I see the future unfold as well. Mobile is cannibalizing the world eating up everything. But doing things better, easier, faster. Doing things previously not possible. And then we get a new opportunity that comes up for mobile, what happens? Mobile. Always. Wins.

 

Major Milestone in Mobile Migration: Adidas Says Goodbye to TV Advertisements... because of mobile

The transition to mobile continues at a relentless pace. We've seen signs of how massive that shift can be and of what may be coming. Now we have another huge milestone. Adidas the sporting brand has just declared that they will end TV advertising and the primary reason is mobile. Their target audience is glued to smartphone screens and if you want to reach that audience, you have to go with that media.

At first it was merely the argument of 'can we do the internet on mobile' and would anyone bother to do so. Earliest mobile internet experiences were slow and clumsy on tiny screens, slow networks, WAP services, no touch screens and no color. But it was a start and then we've seen the evolution where today only 200 million people are left who never use a mobile phone to access the internet - 3.3 Billion out of 3.5 Billion internet users do use mobile, and 1.8 Billion, just over half, never use a PC or tablet of any kind to access the internet.

So next came the idea of 'mobile first'. That if the majority of users were actually accessing the internet on a mobile phone, rather than a PC, then it makes sense also to 'mobile optimize' the internet experience. And as that started to happen, we heard of some countries where the media itself was living in a 'mobile first' mentality, like China, India etc. A deeper mobile commitment was 'mobile always' which Ford first claimed 5 years ago, that they would no longer do any ad campaigns in any other media, that did not include a mobile element. So they will run mobile alongside TV or radio or print or outdoor ads (or internet/web/social media ad campaigns). And mobile becomes now the 'central' vital must-have element. But that step is not yet the 'end' to the legacy media.

So now we arrive to the point of 'mobile only'. Adidas is our first 'Canary in the Coal Mine'. This is like we saw with mobile payments before, where in Estonia you could not use cash to pay for parking (but could use mobile) or in Sweden you could not pay your bus fare by cash (but could use mobile to pay). And last summer we had the news from Malaysia that Air Asia had stopped using human check-in counters for airline boarding passes (but you could do it with your mobile of course).

Mobile continues its relentless conquest of the world. We already can do driver's licences on the mobile phone as they did in Dubai. We can vote by mobile phones as they do in Estonia. The wallet is going mobile from Japan to Kenya to Turkey to the USA. And now, TV is under assault. A major global TV advertiser says they will no more do TV ads, but will do mobile ads of course. Yes mobile is taking over the world.

And if you need all the stats and facts about mobile, check out the 217 page ebook TomiAhonen Almanac 2017 where there are over 100 charts and tables to tell you all about mobile numbers, facts, statistics and case studies. See more here.

Filling In the Missing Bits: Kantar Numbers and World Smartphone Market

Time for a regional-split analysis of smartphone new sales. Kantar does nice market detail from a select group of countries. They've just released their update with data from the EU5, US, China, Australia and Japan markets. It is not a total world view but it helps us map out the market. We can use the countries excluding China, to get an approximation of the rich world market size. Beware however, that this latest market snapshot by Kantar is now the optimal iPhone market moment, right after the newest iPhone had been released and just before the next new Samsung Galaxy model is released. This period's performance will skew more in favor of the iPhone than a 'full year' analysis but we need to go with the data we find, ie in this case what Kantar will tell us.

When the numbers are weighted by population, we get the rich world smartphone OS split is roughly 66% for Android and 34% for iOS. China numbers come straight from Kantar as 83% for Android and 17% for iOS. We know the total world sales for the last quarter of 2016 (Christmas quarter) where the split was 82% Android and 18% iPhone. So we can now calculate out the 'Rest of the World' market share for Brazil, Russia, India, Nigeria, Indonesia etc and we arrive at 88% Android, 12% iOS. (I am excluding the tiny OS platforms that have less than 1% global share like Tizen, Linux, Blackberry and Windows). So we get an estimate of the world market shares by Rich World/China/Emerging World like this:


Smartphone Global Market by Market Affluence in Q4 2016:
Rich World Countries . . . . . . . Android 66% . . . . iOS 34%
China . . . . . . . . . . . . . . . . . . . Android 83% . . . . iOS 17%
Emerging World Countries  . . Android 88% . . . . iOS 12%
World smartphones . . . . . . . . Android 82% . . . . iOS 18%
Sources: Kantar Worldpanel and TomiAhonen Consulting Analysis, 16 March 2017
This table may be freely shared


That is your market split. Even in the rich world Android now outsells iPhones at 2 to 1 ratio. And outside of the rich world it is 1 in 6 or less that are iPhones. To understand how to adjust these numbers for an annual number - this quarter Apple has 18% market share but for full calendar year 2016 Apple only had 15% market share. For the full year those regional splits would need to be adjusted downward for the iPhone and upward for Androids, by about 3 points per region, to get annual data levels. If you want more regional handset data including a regional split in more detail (8 regions) and by various other measures like installed base of OS platforms etc, then please see the brand new TomiAhonen Phone Book 2016 that just came out just over two months ago. It has 180 pages and over 100 charts and tables on all the handset data - smartphones and dumbphones - you could ever hope for.

Have We Seen a Concorde Moment in Cameraphone Design? Did we go through 'Peak Camera' already in our smartphone evolution?

There are not many cases of a 'Concorde Moment' in technological advances. Usually technology allows improvements in performance in later designs and evolution, making things 'better' on whatever criterion we want. Cars get faster, cheaper, safer, have better fuel economy etc. TVs get thinner with bigger screens with more channels and lower cost. Computers get faster, cheaper, smaller, lighter, require less electrical power to run, etc. And in aviation, airplanes used to always get faster. Early planes a hundred years ago flew at about 200 km/h. Planes by the start of World War 2 flew at about 450 km/h. By the end of the war planes were at 700 km/h. Then the new jet engines helped push planes into the 900 km/h class for most civilian airliners and some jet fighter planes started to fly at supersonic speeds by the 1950s. And by the 1960s there were several competing projects of 'SST' transports for civilian airliners, SuperSonic Transports. And we know that type of plane as the Concorde.

But the two supersonic jet airliners, Concorde and the Tupolev 144 were an anomaly in airplane design, that they pushed the advance in speed compared to their contemporary rival planes, but no other commercial jet airplanes have since been designed to even match their speed far less exceed that. Concorde flew at 2,180 km/h, more than twice the previous planes like the American jets Boeing 707, McDonnell Douglas DC 8, Europeans like Sud Aviation Caravelle and British Aircraft Corporation One-Eleven or Soviet jetliners like Ilyushin 62 or Tupolev 134. These would typically fly at a speed of about 900 km/h. Then after the Concorde and Tupolev 144 supersonic jet airliners, subsequent planes became bigger but not nearly as fast, such as the Boeing 747, DC 10, Lockeed Tristar, Airbus A300, Tupolev 154 etc. And even today the latest planes like the Airbus A580 or the Boeing 787 Dreamliner are still flying at speeds of about 900 km/h. Concorde only flew commercially from 1976 to 2003 (the Tupolev 144 was in operation even less time than that) so the era of supersonic commercial passenger travel only lasted for 27 years. And after the retirement of the two supersonic airliners, the speed of jet passenger travel has reduced back to what it was in the late 1950s at about 900 km/h.This has produced a 'Concorde moment' in technology evolution. A peak of tech performance that is not sustained and from which a regression follows instead. Imagine if that happened in cars, and we'd go back to slower speeds, or if it happened in TV sets and we'd go back to small TV screens, etc.

There are not many Concorde moments in tech history but aviation has produced a few. In military warplanes there was a race for top speed that has also had its Concorde moment. The fastest fighter jet made was the Mig 25 which flew at Mach 3, but its later evolution into the Mig 31 produced a slower version flying only at Mach 2.7. The US spy plane SR 71 Blackbird could fly faster than Mach 3, but that plane has been retired and currently the fastest US warplane is the F-15 at Mach 2.5. A high speed strategic bomber was designed for fying at Mach 3, the XB 70 Valkyrie but that design was ended and instead a Mach 2 design for the B1 bomber was produced (and its alter versions were further slowed down, where it stopped flying very high and very fast, but rather fly very low near the ground and at lesser speed). Apart from aviation, the only major 'Concorde moment' in tech seems to be the evolutionary development path that led to the Bugatti Veyron. The British Top Gear TV show argued that the Veyron was the car industry's Concorde Moment and no future car would match or exceed the high speed performance of the Veyron. This of course remains to be seen, we may still find something faster some day.

Meanwhile in the familiar tech space of smartphones we may have had our 'Concorde Moment'.  And that would have been in the area of camera phones. Not that the overall performance of a smartphone had somehow peaked - they keep getting more powerful in most ways - but no, I mean in the specific area of camera performance. We have seen the megapixel race for fitting more pixels to a cameraphone sensor reach a monster level at 41 megapixels with the Nokia 808 Pureview in 2012. This level was maintained in the Nokia Lumia 1020 released in 2013. However, in the four years since, no later versions of Nokia/Lumia/Microsoft flagship class smartphones have matched that camera pixel count or even come close. And cameras in rival phones have not come anywhere near close, with the 24 megapixel class being about the highest count we've seen elsewhere (so far). At least early signs of HMD's ownership of the Nokia brand now does not suggest a return to this 'super' class of megapixel count in the image sensor race. It does kind of suggest we may have had a 'Concorde moment' on that side of the matter.

But there is a lot more to cameraphones than megapixels. What about the optics? How are the lenses on the cameraphones? We have recently had some news about say Apple doing its dual camera setup (two lenses, one for wide-angle pictures, the second for telephoto images). Some cameraphone makers like Asus have offered some zoom lenses and Oppo has recently been showing a concept of a 5x optical zoom. But optical (ie 'real') zoom lenses are nothing new to cameraphones - Nokia did the world's first optical zoom for a cameraphone in 2006 when they had a '3x optical zoom' for the N93 (in reality it was 2.7x optical zoom). And to be clear, by 'real zoom' you of course have 'digital zoom' on your phone in your current smartphone. That is only image manipulation by enlarging the image which produces then the pronounced pixelated images if you enlarge enough. That is not 'real zoom' as in optical zoom. Digital zoom is a cheap trick to attempt to enlarge an image that works only at a very crude level to a very modest degree. But lets go back to Oppo. As such, a 5x optical zoom in 2017 would seem like 'logical' evolution in camera technology for phones. Except for the fact that in camera optics we have also had already a 'Concorde Moment' and reached a peak of 10x optical zoom. This was done twice by Samsung on its Galaxy class cameraphones, the Galaxy S4 Zoom in 2013 and its successor model the Galaxy K Zoom in 2014 also with 10x optical zoom. But both Nokia and Samsung have long since announced that they were discontinuing the model lines of cameraphones that had optical zoom lenses. And from that 10x optical zoom performance, even if we might get Oppo with 5x optical zoom at some point, that is a significant 'downgrade' and would argue we have had a Concorde Moment that may never be again matched by camera tech installed into a smartphone.

So there is more to cameras than sensors and lenses. There are also things such as shutters and flash units. And these are in a way connected, because a 'real flash' ie Xenon flash is the type of ultra-bright but ultra-brief light source, that it cannot function with modern cameraphone sensors used in the ways most cameraphones use them. That requires an additional camera element added to the construction, in the form of a 'mechanical shutter' that turns on and off the light access to the sensor. This produces the classic 'click' sound on a traditional camera. There is a 'door', a shutter that is clicked open and closed, for a brief fraction of a second, like say 1/125th of a second, to allow the brief moment of light to expose the image. That type of tech is needed if you want a 'real flash' on your phone. And by 'real flash' the opposite is LED flash that almost all cameraphones use today. LED flash is less bright, far longer in duration and does not produce the 'stop motion' type of effects of real flash ie Xenon flash. Like digital zoom, LED flash is better than nothing but it too is a compromise and a technologial step down from the top performance. Nokia gave us the first Xenon flash back in the Nokia N82 and there were Xenon flash units in most Nokia flagships for nearly a decade but that seems now to have passed. It is cheaper to put in an LED light source and avoid the expense of the separate shutter in the camera construction. The early phones shown by HMD did not feature Xenon flash and the early concepts show for possible next Nokia flagship phones also mostly do not include a Xenon flash display. If so, we would have a third camera tech element that would have also peaked in just the past few years.

With that, we may indeed have just witnessed our industry's Concorde moment for cameraphones. Cameraphones with 41 megapixel sensors; cameraphones with 10x optical zooms and cameraphones with Xenon flash and real optical shutters - these all were part of new phones sold just a few years ago - but now those technical pinnacles of camera design have been abandoned for cheaper simpler smaller solutions in current top-end cameraphones (that often cost more, but have other advances in other technical areas such as faster CPUs, larger displays, faster network speeds and more memory). I hope that we will still see more phones with excellent camera specs but the past three years do not leave me very optimistic. And as the camera itself is one of the most used and most appreciated technical abilities of a smartphone, it would suggest there could be a market for premium cameraphones. Might we see a separate class of smartphones that are 'camera optimized' that perhaps even abandon some of the need for 'slender looks' to allow bulkier camera construction, or are we now forever locked into the simplest cheapest camera tech into smartphones that otherwise cost far more than many mid-priced 'stand alone' digital cameras. As a camera fan myself, I am still hoping we might not have had our Concorde Moment in cameraphones. But the recent statements for example from Nokia that they were not continuing the association with Carl Zeiss optics, is a further sign that we did experience 'peak camera' in smartphones.

Understanding Internet Access: How Much is Mobile, What Kind of Mobile; and How Much is Access by PC or by Tablet

I made three charts free from the brand new TomiAhonen Almanac 2017, that just came out last week. The charts were selected based on a vote by readers - and among the 3 most requested was the Internet Users chart. Lets dig a bit deeper into this chart and what all we know about internet use both on mobile and on personal computers. Lets start first with the vote-winner chart itself. This shows internet access based on how people access the internet, while allowing users to list multiple ways to access. So the total internet use is 3.5 Billion and some use only one way to access while others use more than one way, such as accessing on a work PC and on the smartphone at home. 





Now lets dig a bit deeper, Lets take a few 'pairs' of findings based on this graphic


INTERNET USE BY A PERSONAL COMPUTER IN 2017
Total Internet Users Globally . . . . . . . . . . . . . . . . . . . . . . 3.5 Billion
Internet Access by PC of any kind at least some time . . 1.7 Billion people
Internet Access by People who Never Use a PC . . . . . . 1.8 Billion people
Source TomiAhonen Almanac 2017
This table may be freely shared


So first off, if you wanted to think that the internet is 'only half way' moved along the path to the mobile internet - then this type of evidence can be found. It does seem like 1.7 Billion use a PC (at least part of the time) and 1.8 Billion use a mobile. This is perilous thinking, Lets take the same graphic and now take the opposite reach.


INTERNET USE BY A MOBILE PHONE IN 2017
Total Internet Users Globally . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Billion
Internet Access by Mobile of any kind at least some time . . 3.3 Billion people
Internet Access by People who Never Use a Mobile . . . . . . 0.2 Billion people
Source TomiAhonen Almanac 2017
This table may be freely shared


Wow? Yes, that is true. The shift to a mobile internet is 'not just past its half-point'. It is 'nearly completed' and 94% of all who access the internet today do so on a mobile phone - at least part of the time! Yes, 3.3 Billion people access the internet on a mobile phone at least part of the time and only 200 million are left of those very luddite people who will not use a mobile phone for their internet browsing and only do so on a PC.


WHAT KIND OF MOBILE?

So first, lets remember a tablet is not a mobile phone. A tablet is an ultra-portable PC. So tablet use is not counted in 'mobile internet' stats in this table nor on this blog or in my books or in the Almanac 2017. Tablets are ultra-portable PCs and this is increasingly the definition also accepted by the PC side of the argument. So when I say 'internet from mobile' in this article today, or in my books etc, I always mean 'real' mobile as in a phone you can put in your pocket. A large-screen smartphone ie 'phablet' is a mobile (like an iPhone 6 Plus) but a tablet is not a mobile (like an iPad). Tablets are counted in the PC side on the table we are examining.

So returning to the question, what kind of mobile? We get a lot of illumination from the chart. It shows the count by smartphones. What surprises many experts and analysts in the West, is that there are still many who use a mobile phone to access the internet - whose mobile phone is not a smartphone! How is that balance going? We have the data.

INTERNET USE VIA A SMARTPHONE AND FEATUREPHONE IN 2017
Total Internet Users Globally . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Billion
Internet Access by Mobile of any kind at least some time . . 3.3 Billion people
Internet Access by Mobile using a Smartphone . . . . . . . . . . 2.8 Billion people
Internet Access by Mobile using a Featurephone . . . . . . . . 0.5 Billion people
Source TomiAhonen Almanac 2017
This table may be freely shared

Yes out of all 3.3 Billion active mobile internet users, 500 million today still do not own a smartphone and are using a featurephone to access the internet. That is 15% of all mobile internet users globally. And to put it in context - more people access the internet on a 'dumbphone' featurephone - than the total usage of internet at internet cafes around the world. That should make you think a moment. How many of those featurephones still use WAP to access the internet on a non-3G network? 200 million. So yeah. As many people as those who never go to the internet on a mobile phone, now still surf the internet on very rudimentary basic WAP pages on a 2G network connection speed.

AND OF PC USERS

So lets then look on the PC side. We do have the actual count of tablet PC users (800 million) out of total PC+Tablet users (1.7 Billion). So the tablet is now almost at half-point of all PC-based internet access.

INTERNET USE BY A PERSONAL COMPUTER AND TABLET IN 2017
Total Internet Users Globally . . . . . . . . . . . . . . . . . . . . . . 3.5 Billion
Internet Access by PC of any kind at least some time . . 1.7 Billion people
Internet Access by Tablet PC . . . . . . . . . . . . . . . . . . . . . 0.8 Billion people
Source TomiAhonen Almanac 2017
This table may be freely shared

So 47% of all who use a PC of some kind to access the internet, are now using a Tablet PC at least part of the time. That will shift over to more than half this year 2017 as the total active population of Tablet PCs slowly approaches the 1 Billion level (it won't get there this year). Out of the Almanac 2017 I can reveal that there are more phablets in use today than tablets but you'll need to buy the Almanac 2017 if you want more such details. This was the freebie gift that my readers voted to make free out of the 107 charts and tables in the Almanac.

If you would like more information about the internet mobile or PC based, please see the TomiAhonen Almanac 2017. It has a whole chapter just on the mobile internet which has the following charts and tables:

Chapter 6 of the TomiAhonen Almanac 2017 - MOBILE INTERNET (16 pages, 9 charts)
Mobile Human Subscriptions, Messaging and Premium Data Users 2003-2016
Mobile Data User Numbers by Different Definitions
Internet Access by Type Allowing For Multiple Use 2002-2016
Access Method of Internet Users 2016
Internet Access Method Allowing Multiple Methods (this is the chart you see in the above)
Mobile Data Users Regionally
Total Mobile Data Revenues 2003-2016
Mobile Premium Data Revenus as Average Per Subscriber 2003-2016
Mobile VAS Data ARPU by Active VAS User 2003-2016


To see more of the TomiAhonen Almanac 2017 - 215 pages, 207 charts and tablets, costing only 9.99 Euros / 9.49 UK Pounds / 13.99 US Dollars - including ordering information, see TomiAhonen Almanac 2017 Information and Ordering Page.

 

China, India, USA: 3 Largest Phone Markets vs Nokia via HMD. Why Nokia 6 will not matter in USA but will rule in India: Marketing Fundamentals 101

Nokia's handset return story via HMD is a marketing challenge. How HMD is handling it, tells us they know their marketing and are executing a strategy that should please all marketing professors. HMD understand about a segmented offering, about regional differentiation, about positioning against competition, about brand strengths and weaknesses, about market opportunities ('low hanging fruit') and most of all in handsets of course they know about retail distribution. This is the 'sensible' analysis of the Nokia 6, the Nokia 5 and Nokia 3.

Let me add this provocative thought for you. Apple gave us the iPhone SE as a cheap lousy low-cost do-over of old tech, to repurpose an old obsolescent iPhone for India, that is now also ridiculously overpriced for its lame specs. Nokia used the same factory and Nokia did what Steve Jobs would have done. The Nokia 6 is how Steve Jobs would have released his 'cheap India smartphone'. It is an EXCELLENT smartphone at THAT PRICE point. Not a lousy old hand-me-down. Steve Jobs would not have released the iPhone SE until it was just about as good as the Nokia 6 is now. (and OMG have you compared the two side-by-side, its a disgrace! The SE is instantly outclassed while it costs 50% more). And he'd then have priced it where the SE is priced now, and it would be a global superhit iPhone too. Understand the market and the targeting. This article is about marketing precision.

This article explains why its foolish to hope these phones will be 'Coming to America'. This article explains why its moronic to talk about these phones being the way HMD and Nokia are 'taking on the iPhone' or the Samsung Galaxy top-end premium smartphones from Korea either. These phones were DESIGNED not to take on the iPhone and Galaxy (such smartphones will come, the first is likely branded Nokia 8. We are likely to see the first true flagship released later this year). It is as silly as claiming in the Vietnam War the North Vietnamese were fighting a sea-battle against the US Navy and its aircraft carriers (like how Japan had tried three decades prior). The North Vietnamese knew their enemy was strongest at the sea so they DIDN'T go fight where the enemy is strongest and you are weakest. You do the opposite. You fight where THEY are weakest and YOU are strongest. This was not in the air where the US Air Force had overwhelming air superiority. It was not out in the open fields where American tanks could kill you at long distances. No, the place where Vietnam was strongest and USA the weakest, was in the jungle. The local Vietnamese soldiers were all trained and equipped to fight in a jungle war (the US was not) and all Vietnamese weapons were optimized for that type of combat (the American rifle which is good in many ways, does not shoot through trees; the Vietnamese rifle (from Russia) does shoot through trees - a vital distinction in jungle warfare; for just one example).

That is the concept of 'smart positioning'. To know where you are strong and where your enemy is weak.So lets take the Nokia comeback case, and view it via the three largest markets for mobile phones - China, India and the USA (in that order, yes USA has fallen to 3rd largest phone market). How will HMD play these three markets? And what is the logic of the Android smartphones, Nokia 6, Nokia 5 and Nokia 3? Oh, and in THIS context, what is the deal with the 3310? Lets do the 'serious' analysis of the HMD comeback and not the silly tech writing you've been reading from almost all other tech writers this week. Please remember, only this blog called correctly EVERY step of the Nokia collapse 2011-2016 including that Nokia would be sold to Microsoft AND that Microsoft could not make that venture work either.

FOUR FACTORS FOR THREE MARKETS

I'm going to build a very simple four-factor model on the 4 issues that currently matter the most for the Nokia brand return in the actual commercial success in the market. When HMD/Nokia considered its initial launch country markets, and where to put its first design and launch marketing efforts, it had to prioritize. It cannot do everything. It cannot try to win everywhere. But some areas are far more promising than others. So first. Are the handsets sold with a subsidy (hiding the true costs into two-year contracts) or without subsidy. Nokia has traditionally sold best in markets with no subsidies where consumers pay full price and know exactly what they are buying. Apple by contrast, sells its iPhones best in markets that are heavily subsidised so consumers do not get fair comparisons on a real-price basis (like the USA and Japan).

HMD could certainly start to sell also in countries that have heavy carrier subsidies to handsets, but those sales cycles will be very long, the carriers will demand all sorts of concessions or exclusive deals (remember how Apple started with the iPhone? Nearly all its early markets were on an ‘exclusive network’ basis, in the USA you could only get an iPhone on the AT&T network for example). The sales effort would take a lot of effort and time, and yield a modest return, if the whole process turns out well in the end. (This is a risk. It may go belly-up too. Remember the Microsoft Kin phones? Carriers pulled their deals only weeks before launch, destroying Microsoft). But at the start, HMD is wise to steer away from heavily-subsidised markets and their demanding carriers/operators.

The second consideration is competition. In most major markets there are some local brands (often only badge-engineered locally-branded Chinese-made phones). But in some markets there are STRONG international brands. South Korea is a perfect example. It would be a horribly costly attempt to go try to invade the South Korean domestic phone market in Samsung’s and LG’s backyard, not to mention all the domestic needs (did you know the Koreans even have their own alphabet, its different writing from the Chinese writing etc). So a market like the USA will have strong domestic competition (well, Apple iPhone is all thats left haha, but as brands while Motorola is now owned by Lenovo of China, it still is seen as an American domestic brand by many buyers). Similarly China has a whole slew of powerful domestic brands that are already major handset powers internationally - Huawei, ZTE, Oppo, Vivo, TCL-Alcatel, Xiaomi etc.

In India there are also domestic brands, led by Micromax and Karbonn but the domestic India brands are not that powerful and are not a major force internationally (at least not yet). To show their relative power, Samsung easily dominates handset sales (smartphones and dumphones) in India while Samsung is only a mid-tier player in China. The local competition is WEAKER in India than in China or the USA.

The third consideration is migration rate. How mature is that market for smartphones? In the USA four out of five phones sold last year were smartphones. In China its three out of four. But in India last year most new phones sold were not smartphones. Dumbphones still outsold smartphones by a two-to-one ratio. So if you want to sell a smartphone in China or the USA today, odds are, the buyer will be replacing an existing smartphone and upgrading. But in India the odds are, that the smartphone buyer is a first-time-smartphone-buyer. THAT is a remarkable difference in the market opportunity and presents opportunity to target a marketing offering.

The fourth and final consideration for our simple model is Nokia’s own brand image in that market. In the US market, Nokia was never a major player. Because of bad relations with the carriers that lasted more than a decade, the carriers regularly refused to sell Nokia’s top phones, so Nokia’s brand in the eyes of most American phone buyers is that of a discount brand. A cheap plastic colorful ‘burner phone’ you could buy for a kid, or one that a drug dealer might use and dispose, throw away. The Nokia brand in the US phone market is remarkably weak - and that of a cheap phone.

In China Nokia had a stellar reputation and the brand was powerful. Nokia ruled atop the Chinese smartphone market against the whole lineup of domestic smartphone makers - up to idiot CEO Elop’s market suicide moves of 2011. The last six years have seen a disaster following a catastrophe following a calamity by Nokia in the world’s largest phone market. Yet its brand still endures and there is a ton of love for the Nokia brand. However, within the smartphone side of the phone business, Nokia’s brand now is stuck in the crowded mid-field. It does not stand atop the race like it did seven years ago.

Contrast to India. In India until recently Nokia was not just the most valuable tech brand (obviously most valuable phone brand, far ahead of Apple iPhone or Samsung Galaxy) it was the most valuable brand. Period. Ahead of everybody and I mean literally everybody. Nokia ahead of Mercedes Benz and Rolls Royce and IBM and Rolex and Nike. The most valuable brand of India. I think it was two years ago that Nokia brand dropped from the top to second place haha...

The massive damage of the Lumia-Windows saga at Nokia in the past six years did also damage Nokia in India - but remember, even last year two thirds of new phones sold in India were dumbphones/featurephones. Not smartphones. So the damage of Nokia's smartphone fumbles had only minor impact in India (vs Europe or China for example). And Nokia had plenty to offer consistently in that space - including the very advanced featurephones called the Asha series (which outsold the Lumia series smartphones globally in the quarters that these two rival phones were sold side-by-side by Nokia). Whatever damage Elop was doing to Nokia brand, that was least-felt in India (of these 3 big markets). The Nokia brand WAS the strongest already before, in India, of these 3 markets, and in the recent turmult, the Nokia brand has RETAINED its brand value the most - in .. India.

THREE MARKETS AND HMD

So the USA. A market where phones are sold with subsidy (bad). Where local phone brands are strong (bad). Where the migration rate to smartphones is far (bad). And where Nokia brand is weakest (bad). That to me is a bad-bad-bad-bad choice.

Then there is China, where phones are not sold with subsidy (good). Where local phone rivals are strong (bad). Where the migration rate to smartphones is also quite far (bad). And Nokia brand is still pretty strong (good). This is a far better market than the USA, for HMD. Its a good-bad-bad-good market.

Compare to India. Where phones are not sold with subsidy (good). Where the local rivals are weak (good). Where the migration rate to smartphones is very early (good). And Nokia brand is very strong (good). This is obviously the optimal market for HMD and Nokia its a good-good-good-good market!

Understand this point. HMD has to make choices. It cannot try to fight everywhere. It has to prioritize. There are 3 large handset markets. HMD could go to the one country that is bad-bad-bad-bad (the USA). That would be supremely dumb if better choices exist. HMD could go to China, which is good-bad-bad-good. That would be better. So HMD already released the Nokia 6 for sale in China. But the obvious market with a gaping huge opportunity for HMD is India that is good-good-good-good. This is why the Nokia 6, Nokia 5 and Nokia 3 seem to be perfectly designed - FOR INDIA. And in particular, the 3310, is not intended as a ‘retro phone’ for Americans (or Europeans or Australians or Singaporeans) haha. No, it is intended to help WIN IN INDIA. Not China. Win in INDIA.


COMPARING NOKIA IN THE THREE LARGEST MARKETS
Item . . . . . . . . . USA . . . . . . . . . China . . . . . . . . India
Subsidies . . . . . yes . . . . . . . . . . no . . . . . . . . . . no
Competition . . . strong . . . . . . . . strong . . . . . . . weak
Migration . . . . . 80% . . . . . . . . . . 75% . . . . . . . . 33%
Nokia brand . . . weak . . . . . . . . . good . . . . . . . . strong
Source: TomiAhonen Consulting analysis 3 March 2017

This table may be freely shared


That explains EXACTLY why we have a Nokia 6, a Nokia 5 and a Nokia 3. It also explains WHY the 3310 does not have 3G and is only a 2G phone. Most of India is still 2G. HMD is targeting INDIA and countries that are similar to India (from HMD’s point of view). So markets where there are no handset subsidies, where the local competition is not strong, where the migration rate to smarthpones is not yet strong and the Nokia brand has historically a good position. So markets like Nigeria, Egypt, Pakistan, Indonesia, Brazil, Russia...

LARGE SCREEN, CAMERA, LUXURY

Nokia (and HMD) understand the mobile consumer GLOBALLY and by various customer segments better than anybody else. They have more consumer surveys and studies than anyone else on the planet. They have studied to minute detail everything about mobile. And currently two things govern phones. The killer deciding factor is screen size. Not screen pixel density and clarity. Screen size decides. This is even more true of first-time buyers of smartphones. For many of them their first smartphone is their ‘poor man’s personal computer’. It is their ‘choice’ when they also briefly considered buying a tablet. They will often want a phablet screen so the smartphone can behave like a mini-tablet PC.

The screen is the magical bit of the phone. It shows our videos, it shows the pictures, it acts as the mirror when using the selfie camera. It displays websites and you can play videogames on it. So Nokia knows this. They put giant screens on their phones and made sure they are BRIGHT big screens, they look good. Because those phones will then be compared, side-by-side in a phone store. These 3 smartphones, Nokia 6, Nokia 5 and Nokia 3 - were designed to WIN INSIDE THE STORE. How can you illustrate a ‘faster CPU’? That takes a ton of effort by the sales dude or dudette and the final outcome might not even be noticable by the buyer... a lot of effort for no gain. But a larger screen is easy to illustrate. And a brighter screen seems better.

Then there is the camera. Nokia knows the cameraphone. Nokia has won the cameraphone-of-the-year awards more years than all other phone makers combined. And from Nokia’s own research, Nokia (and HMD) know that for Nokia loyal brand buyers - they rate the camera consistently as one of their top priorities when buying a new phone. If you remember early iPhones (back when they were haha 2mp and 3mp cameras) many iPhone buyers snobbishly said, I don’t care about the camera because I own a digital camera that I use instead. I can never imagine using a smartphone as my main camera. Hahahahahahahahaha

Nokia knew better. Which is why Nokia’s flagships have consistently rated the best cameras in the industry. Now these three smartphones are NOT flagship-class phones. Nokia often brands its top phones with Carl Zeiss optics and even the Nokia 6 does not include Zeiss branding. These are not the best that HMD can do in cameras. But in this CLASS of phones (costing less than 300 US dollars in unsubsidised price) these are absolute top-of-class cameras including a huge 8mp selfie camera with wide-angle lens.

DON'T FIGHT IN THE OCEAN - FIGHT IN THE JUNGLE INSTEAD

The Nokia 6, Nokia 5 and Nokia 3 were not designed to take on the Samsung Galaxy and the Apple iPhone. They were not designed to win in the US market (or Europe). They were not even designed to win in China. They were designed to win where HMD has its best chances - in India (and similar markets). The world average price of smartphones is 254 dollars (source TomiAhonen Phone Book 2016). 26% of all phones sold last year were in the mid-price bracket (Source TomiAhonen Phone Book 2016) where these three new Nokia Android smartphones all are positioned. That market is the size of 520 million new phones sold this year. And Apple does not sell a smartphone in this price range. Samsung’s smartphones sold in the under 300 dollar range are decidedly plasticky-cheap end versions where Samsung of course prefers its customers migrate to buy top-end Galaxies instead.

Now here is the FAR more detailed part. How is India domestic phone market vs the world? Haha, check out this detail. The world average price for all phones (smart and dumb) is 193 dollars last year. But for India the domestic phone market average phone price (weighted average of dumb and smart phones sold) is .. 75 dollars! (again yes, data courtesy of the TomiAhonen Phone Book 2016). Yes, that is the India phone market. That is what an average India phone buyer an afford. India is 120 dollars UNDER the world average. There is no way Apple sells 700 dollar iPhones in any meaningful amount in India. Now consider the Nokia 3. The world average smartphone price is 254 dollars. If we take 120 dollars off that price then roughly speaking India average smartphone price today is 134 dollars. Now consider the Nokia 6, priced at 299 dollars. The Nokia 5 at 249 dollars and the Nokia 3 at 179 dollars. Nokia is pricing itself ‘JUST ABOVE’ the mid-point of India’s domestic market - as a PREMIUM BRAND for THAT MARKET.

These phones were not designed for Europeans or Americans. They were PURPOSELY DESIGNED to win in India (and Nigeria, Brazil, Indonesia, Russia, South Africa, Argentina, Ukraine, Philippines, Vietnam, Bangladesh, Egypt, Pakistan, Iran, Turkey, etc).

Now consider the luxury aspect of the new Nokia Android phones. They are a drastic departure from the neon colors of the Lumia Windows smartphones. They are sleek, metal, classy and ‘luxurious’. They feel premium, expensive, classy. They are designed to win in the store. That when you compare two similarly-priced phones, a Huawei something and a ZTE something vs the Nokia, you end up saying - hey, I’ll take this Nokia. Why? Because Nokia knows handset RETAIL. They know this aspect of the industry - again better than anybody else. They know that half the time the phone buyer walks out of the store with a different phone than what they intended to buy when they walked in. These 3 smartphones were designed to win inside the store.

Not against the iPhone!

These phones will never be seriously considered side-by-side by a serious generic random non-geeky phone buyer who is currently owning an iPhone that they bought when it was new (who is not a loyal ex-Nokia fanatic; there will of course be a few of those too). No. I mean a customer whose budget is limited to 300 dollars (or less). That phone buyer will not compare the Nokia to an iPhone in the store. That buyer will compare it to a Huawei or ZTE or LG or perhaps a Motorola and whatever local brands are there like the Lavas and Solos and Mifones and Xiaomis and Micromaxes and Karbonns. And that is when the luxury of the Nokia design will win over many customers. In particular any who loved Nokia already. They will easily fall for the classy luxury feel of the premium phone body in the new Nokia smartphones. Great screen, great camera/s, and very very classy body. And yeah its at the top-end of my budget, but gosh, I’ll take this Nokia......

These 3 smartphones were DESIGNED to win in India. Not in Europe, gosh not in the USA. Designed to win in India (and the other markets I listed). Not even designed to win in China (although they will sell well in China too). These are purpose-designed to be a success in the best market opportunities for HMD/Nokia return. Starting with India.

So. MicroSD. Duh. Great battery life. Duh. FM radio. Duh. Dual SIM. Duh. These are all issue that are VERY important in India that most Western writers didn’t care to talk about when they reviewed the Nokia 6, Nokia 5 and Nokia 3. Most of the Western press wrote endlessly about how this is competitive that the Nokia series have a clean and unclutted Android OS. Who cares? A few geeks maybe. These phones were NOT INTENDED to win in Europe or America! These were intended to win over FIRST-TIME smartphone buyers in India! Those buyers couldn’t care less about Nougat version this or that! What a silly approach to the story! Yes you and I may like it - personally - but as a MARKET - that is IRRELEVANT. Those buyers will not decide ‘I take this phone not that’ because it has ‘an uncluttered Android OS’ come on? What sheer bullcrap reporting again? These phones were designed to win in India. The buyer barely understands what a smartphone even is... They were told an Asha is or is not a smartphone so they themselves may or may not have owned a smartphone already haha. They care about Facebook and Angry Birds. Maybe a few care about Pokemon Go or Super Mario. But they don’t care which version of Nougat haha. Come on. Two thirds of new phones sold last year in India were still basic featurephones/dumbphones. Part of the country is still illiterate! The average phone sold in the country only costs 75 dollars when in the rest of the world it costs 193 dollars. Lets understand THIS market and treat this launch properly?

SO NOKIA 3310

First off, again. The Nokia 3310 is not the ONLY ‘dumbphone’ that HMD/Nokia is offering to the world. HMD introduced for example the Nokia 150 in December, which is a very basic 2G dumbphone costing 26 dollars without subsidy. But it does have a color screen, a very basic VGA level camera (including LED flash) and FM radio, DUAL SIM and yes, microSD support. This is the LOGICAL path for HMD to take, as it has a huge legacy of profitable customers who buy basic Nokia phones all around the world (except not the USA or Japan or South Korea) and at the very low end, Nokia is still able to make a profit even on this type of basic phone. The 3310 is no ‘anomaly’. It is a sound product in a product RANGE of dumphones/featurephones - to serve millions of customers who even when Microsoft owned the Nokia handset business - this sector was profitable business. The smartphone side with Windows was unprofitable (viciously so). But this featurephone side, that was safely profitable.

One quarter of the world’s phones sold last year were not smartphones. Thats nearly 500 million phones! Understand how MASSIVE this global market is. That is larger than the total tablet market, plus the total laptop PC market plus the total desktop PC market - combined. We can toss in even the world videogaming consoles into that pile and its not as big a market as the dumnphone market is in size. 500 million phones is nearly 1.5 million phones sold EVERY DAY of the year, 7 days a week. Just because you and I have a smartphone, it is too easy to forget, for half a BILLION new buyers last year, the only type of phone they could afford (or the only type they were willing to buy) was a dumphone. HMD/Nokia is SERVING that market need. These phones, like the Nokia 150 and now the Nokia 3310 - they are designed to sell to those customers who don’t want to or cannot afford to buy a smartphone. Nokia brand has a near-global footprint for those phones and because the business is profitable, HMD would be idiots not to take advantage of this market to help build their smartphone business.

Now consider the INDIA strategy as I outlined in the above. Forget silly European tech journalists pining about a ‘retro’ customer who rejects smartphones and wants simplicity and would buy the 3310 - the 3310 was not INTENDED to help ‘win’ in Europe (or America or Australia). It is designed TO WIN IN INDIA.

The average price of a dumbphone globally is only 23 dollars (says the TomiAhonen Phone Book 2016). So even the Nokia 150 is well above the average price point (it is sold as a premium phone within its price bracket). Now consider the 3310 - that costs more than TWICE the average. At 49 dollars, the 3310 is literally more than twice as expensive as an average dumbphone is today. And it does not have astronomically phenomenal specs either. It has a good camera yeah and large screen (for a dumbphone) but it is ‘just a 2G’ phone and is not a touch-screen based featurephone/internetphone like many rivals in that price level are.

What is the 3310 intended to do? Think of its market and the buyer. We are now in INDIA again so forget all your stupid thoughts about being a European or American. In INDIA. The Nokia brand stands for rock-solid durability and legendary battery life plus remarkable ease of operation. A resale value that qualifies a Nokia purchase nearly as an investment (if you take VERY good care of it and protect your most prized possession well before you sell it). The original 3310 has tons of fans. The original 3310 still has many active users left haha, old phones onto their sixth or seventh battery and still going strong. There is in every market a segment of buyers who don’t want change. Who like things as they are, and don’t want any changes. Who would prefer all progress stopped. And for many of those types of buyers in mobile phones, they tend to be older users, who are clutching an old Nokia basic dumbphone and refusing to let go. It may be a 3310 but could be another phone of that era. Typically though, its a Nokia. And it is not a touch-screen phone. It is operated by T9 keyboard entry. THAT is what the customer WANTS.

Its not what you and I want. Its not what most consumers today want. We may laugh at the fact that the 3310 is not ‘modern’ but do not deny it, you know your own relatives, we all have some relatives who are like that - they want to hold onto that old tech they loved. There would be SOME size of a market for the 3310 type of customer in almost every market where Nokia once was strong. But what about India? In India last year, two thirds of all NEW phones sold were still dumbphones! This is not a ‘retro’ phone in India, this is a ‘current’ phone updated, for many buyers in India! I don’t mean this as a slight to India, I mean literally, many in India are still using phones like this - they will not ‘notice’ this as a ‘retro’ phone, they see this simply as an ‘update’ to what is normal in their phone stores. Hey, I like that update from Nokia...

Now consider the PRICE point. 49 dollars for the 3310 (vs 26 dollars for the simpler Nokia 150). Where the average dumbphone price worldwide is 23 dollars. Why is this price ‘so high’? That is part of the magic and the brilliance of the positioning. There is certainly a segment of the market who don’t ‘really care’ exactly about the price (within reason, and say within 10 or 20 dollars one way or the other) if they ‘just had that phone they really wanted’. The 3310 is the perfect gift by any techie-obsessed relative, to their luddite old grumpy uncle, whose old Nokia is literally falling apart and held together by scotch tape. It is ‘exactly’ like the old Nokia dumbphones but it DOES have a modern camera and nice big color screen to look at those pictures of the nephews and nieces too.

For price-conscious buyers if the average price is 23 dollars, then 26 dollars is a tall ask and 49 dollars is as silly as offering them a sailing yacht like a Swan from Nautor or an executive jet like a Gulfstream G6. The 3310 is utterly outside their price range. If the buyer however is relatively affluent but a ‘technophobe’ some kind of luddite - who could AFFORD a simple smartphone but just hates them or fears them - for them this is a god-send. Then the price becomes almost an irrelevant issue. Is it a Nokia? Does it have a removable battery? Are you sure it does not have that weird touch-screen? Ok, I’ll take it. how much?

I am certain that for a significant slice of those who end up buying hte 3310 for themselves, they could easily afford the Nokia 3 but simply will not buy a smartphone today. For those customers, 49 dollars is an ‘irrelevant’ price point. Its a good phone, familiar, its their fave brand, its like the old one they had. It has a kind of funky larger screen, ok. And it has a camera too? Ok, thats nice. But yeah, they want the phone. And they’ll buy it. And they are not ‘price-hunting’ against a rival phone from a local no-name brand that costs 19 dollars. The typical 3310 buyer does not visit the phone store. They will walk in, say I want the 3310, and take it and pay and walk out. They won’t compare to other phones. They are customers who have already decided years ago, this would be the phone they would buy. Now they have it, and they will buy it.

Similarly a major slice of the 3310 sales will be purchases as gifts. Gifts to grumpy old uncles, and also gifts of first-phones to kids. And because of the incredible battery life, some will buy te 3310 as their ‘emergency phone’ (but this will be a far smaller slice of the market). Some who buy the 3310 will be considering it a 'tool' (eg taxi driver) who will consider its life cycle to be 5 years or more, and its just a 'business investment' that is wise to make now, you never know when another 3310 might be made again, if ever. Those customers mostly will not care 'precisely' about the price ie was it 49 or 39 or 29 dollars - but this phone is overpriced and thus has a ridiculous profit margin for HMD. And it will sell like hot cakes (at least initially, for a quarter or two. We have to see is the sales level sustainable for a year). And that means it helps HMD profits in its roll-out costs - immensely. Not to mention the vast amount of free publicity it is generating.

The 3310 does not have 3G because it was INTENDED not to sell in Europe or Singapore or Australia or the USA. It was DESIGNED to win customers in India. And then we get the beauty of the 3310. The 3310 serves two strategic purposes to HMD in the INDIA (and similar) market(s). First, it drives consumers to the stores who otherwise would not be there. That means the stores will love the 3310. Look at the incredible press the 3310 has had everywhere. So this makes it easier for HMD to build its retail distribution - which of course HMD needs for Nokia 6, Nokia 5 and Nokia 3. So the 3310 is a ‘headliner’ product that opens doors - and boy is that smart how they did that (HMD). They were able to do a headliner product out of an old forgotten generic dumbphone (rather than try to design an iPhone-killer flagship to achieve this same effect).

The second strategic effect is more profound but takes longer to be realized. It is the time-conversion of those 3310 buyers into smartphone buyers of Nokia in the future. So consider the actual 3310 buyers in the next year to 18 months. Most of those who buy a 3310 for themselves will fit the pattern of - existing Nokia owner, does not own smartphone, current Nokia was dumbphone/featurephone that did not have a touch screen (ie was not a Nokia Asha featurephone). Yes, there will be others too, some will by 3310 for themselves as their second phones (Taxi drivers, will by 2-3-4 as their other phones) but most who buy for themselves fit that pattern. Existing Nokia owner. Current (previous) phone is (was) dumbphone that did not have a touch screen. That older Nokia phone typically did also not have a camera! So now the 3310 does the ‘behavior change’ transformation of the 3310 buyer.

Now the buyer of the 3310 gets a camera - usually it will be the first camera that consumer has ever owned. They will not use it often (to begin with) but in the next two years, most 3310 users will become accustomed to using the camera at least on a weekly basis. Some will become obsessed with it and use it daily. Most will not, but will use it a couple of times per month.

THOSE customers are now ‘baked into’ becoming Nokia smartphone users in the future, because of the camera (and the larger screen). The NEXT phone will then be considered for its camera (and it has to be again a Nokia) and then.. they will appreciate suddenly a larger screen. How much better the pictures (and videos) shot on the phone will seem, when its a massive 5 inch screen vs the 2.5 inch screen on the 3310 they used. Then add microSD and Nokia’s easy software to help move files from one phone to another and you have a loyal Nokia happy 3310 owner eventually moving to their first-ever smartphone - which will be a Nokia on Android. Perhaps a Nokia 1 or Nokia 2 in about 2-3 years from now.

That is what the 3310 is intended to do. It is not the ‘retro’ phone for us Westerners. It serves a genuine need right now, in markets like India. Where thre are still millions of adults are illiterate and have no use for any smartphone far less their apps. But a camera does not need literacy... press the button and look at the image. Even an illiterate - but can be quite affluent - older consumer in India can learn to love the simple intuitive camera on their new 3310. Understand what it is INTENDED to do. What is its INTENDED market. And then go read the press in the Emerging World markets and see how much they love the Nokia 6, the Nokia 5 and Nokia 3. And how much they think the 3310 will be a huge seller in their home markets. And they think this is all very normal, by a smart brand that is strong in their home market.

TO SUM UP

The USA market is hopeless for HMD and Nokia. Even when Nokia was the world’s largest handset maker and threw all its marketing efforts into succeeding in the US market, it didn’t. The USA is bad for HMD/Nokia now, for its handset subsidies; it is bad because of strong local competition; it is bad because the migration rate is so far gone; and its bad because Nokia’s brand image is bad in the US market.

China is better but not optimal for HMD. China is good for no handset subsidies but its bad for many strong rival handset brands. China is also bad for its migration rate to smartphones but China is good for Nokia’s brand image still being quite strong.

India is by far the best of these three large markets. There are no handset subsidies, the local rivals are weak, the migration rate to smartphones is only in its early stages and Nokia’s brand is remarkably strong.

The Nokia 6, 5 and 3 were designed to win where it counts - in India and the other countries like India. If you leave out China, and take the next 10 largest countries in the Emerging World (like India, Indonesia, Brazil, Russia, Nigeria etc) you have a global market that is literally one third of all phones sold. This is NOT the market where most iPhones are sold (although of course the rich in those countries will buy iPhones too). HMD is leaving America, Japan, Australia and Western Europe for Apple and Samsung and Sony and others to fight over. HMD went where its best opportunity lies. It targeted three smartphones for where one third of the market is, and where the iPhone is not a player. Where half of all phones sold are still dumbphones. Where most smartphone buyers are switching from a dumphone. Where Nokia’s brand is golden. And where many more affluent DUMBPHONE owners currently... have a NOKIA branded dumbphone. For those customes - they created the Nokia 6, 5 and 3. And if you don’t feel like buying a smartphone yet - no worries, we have a 3310 for you. It has a great camera and screen and a removable battery and it lasts a month on standby...

HMD went with ‘the low hanging fruit’. Note that Apple once again, in its infinite wisdom, elected NOT to pursue this market even though it has sat there for years staring Apple in the face. Look at the Nokia 6. Seriously. It is manufactured by THE SAME COMPANY as the iPhone, ie Foxconn. Look at the Nokia 6. Seriously. Look at it. Imagine it saying Apple iPhone 6E. Cost $299 without contract. Primary market intended: India, Brazil, Nigeria, Indonesia, Bangladesh... That would have sold like hot cakes. And Apple would today have 20% market share in the world of smartphones and have a 10% share in the Emerging World markets. They are once again... leaving money on the table. Look at the Nokia 6 and squint your eyes, that could just as well have been the iPhone 6E. E for Emerging World. And now (you can stop squinting your eyes) think back at HMD. They are taking a page out of Apple’s book. The previous generation of Nokia went all plastic and cheap vs Apple (Lumia/Windows). Now they are going ultra-luxury-premium. Like Sony Xperias. Metal, classy. Not the tacky plasticky blend Samsung has where you can SEE its a Galaxy from far away because of part-plastic parts. Again, smart move HMD.

Steve Jobs saw the original Apple musicphone concept prototype and said - no. He forced the designers to go back, do a total redesign, and do it better. It was not 'Apple enough'. The original Apple iPod-Music-Phone was according to rumors a phone with traditional buttons and no touch screen. The designers started again, and a year later they had the iPhone. While it made Apple lose a year in its entry to phones - Steve Jobs got his Jesusphone. It was the device worthy of Apple's brand and effort. It would change the world. It was truly amazing. Now go to last year's Apple event with Tim Cook and the iPhone SE. What was that? And yes, imagine if it was Steve Jobs? He would have looked at that SE and his team and said - guys, this will not be the most beloved phone in India and this will not change the world - go and redesign it and do it properly. And you know what? What Apple would now have is.. the Nokia 6. Of course Steve Jobs would still have priced that iPhone at something like 399 dollars not 299 dollars but gosh, seriously! Look at the Nokia 6. If you plaster Apple logos on it, that could just as well have been the iPhone 6E. And THAT smartphone, that would have sold well in India... This Nokia 6 (and its sisters) gosh, it will take OVER the Emerging World for Nokia and HMD. Great move. The move of a master. A Jedi Move. HMD you made a smartphone Steve Jobs would have made.

Ok, thats what I had in mind today. If you need all the data on the phones industry, the brand new TomiAhonen Phone Book 2016 just came out two months ago. All data current. Get yours now. Costs only a minimal 10 Euros, come on, it will not bankrupt you. 180 pages, 100 charts, absolutely must-have if you’re into phones/handsets.

Augmented Reality Reached 3 Billion Dollars in Annual Revenues, Powered by Pokemon Go

Augmented Reality will be the next mass media.

WHAT ARE THE 7 MASS MEDIA?

So AR will be a mass media. That will be the 8th mass media in chronological sequence. Print was first, then came Recordings, Cinema, Radio and TV. These 5 'analog' legacy media are well known and all classic mass media studies cover them well. Print is the basis of such giant industries as newspapers and magazines, books, posters and more obscure smaller printed media like playing cards and post cards (remember those?) etc. Recordings was first only the music recording industry but expanded later to include the videogaming industry which now towers over music by size. Cinema was said to kill print. It didn't. Radio was supposed to kill the record industry. It didn't. And TV was supposed to kill cinema, print and radio. It didn't. All five legacy mass media still survive today but when a new mass media came along, they adjusted.

The internet (or more accurately the WorldWide Web evolution of the internet) became the sixth mass media and it was the first inherent-threat mass media - the internet could destroy and cannibalize all of the previous media. Note this was never true before. For example you could not sell music through the traditional broadcast TV network. The internet has done a pretty good number on the old media too, in particular the music recordings industry that has been devastated by the internet. Still, the other media mostly adjusted and none are actually dead yet. The internet introduced several new elements to mass media such as sharing and interactivity. 

Then we have the current champion, mobile. Mobile became a mass media when the first music downloads to mobile emerged out of Finland in 1998 (originally the basic downloadable ringing tones). Mobile media today is far larger than the recordings industry, radio, cinema and the internet. Mobile is now catching up to in size to the print and TV industries and will pass those soon. Mobile media is worth 407 Billion dollars annually (says the TomiAhonen Almanac 2017) and that is not 'smartphone apps'. Apps are only a small fraction of the mobile media revenues. Like the internet, mobile is an 'inherent threat' mass media because mobile can do what all previous SIX media could do - including now the internet. It means mobile can cannibalize all previous six. Note that this does not go the other way. The internet (PC based internet, legacy internet) cannot cannibalize mobile. We see this in the numbers too, even the USA, online PC/legacy internet revenues are flat or declining but mobile revenues are skyrocketing. Mobile as a media is nearly twice as big as the older internet as a media channel already.

AR IS 8TH MASS MEDIA

And that gets us to Augmented Reality. Note first, that VR Virtual Reality has nothing to do with AR. They are regularly mentioned together. VR needs the specal headgear like an Oculus viewer and you immerse yourself into that environment to take some virtual reality journey. It is good for gaming and some education and training purposes. VR is not and will not be a mass media by itself. It will be a MEDIA FORMAT for recordings. It will be a FORM of videogaming. VR will be a SUBSET of videogaming, which itself is a subset of the Recordings industry, the Second Mass Media channel. VR will never be as big as AR. And VR will not be universally used like a mass media would. VR may some day be common in many gaming households (time will tell) but AR is already today far larger and far more used and making tons of money. So don't mistake these two. Don't think because there is a letter R in both words, you should think of them as a group. They are not. VR is a niche play. AR is a mass market play. Its like Apple Watch vs a smartphone. VR will be for geeks mostly (initially). But AR is for the masses.

Augmented Reality? We all now know what it is thanks to Pokemon Go. I wrote earlier that Pokemon Go is the most successful game in history (for this point in time in its launch from zero) and has broken all records in downloads and revenues earned so far. Pokemon Go reached 500 million downloads in four months and made its first Billion dollars in only 7 months. It has now just announced its 650 millionth download and keeps growing. You may hear silly stories saying some users are tiring of the game - this happens in EVERY GAME. That doesn't take away from the fact that we are witnessing a more massive launch than Angry Birds. Pokemon Go is literally the most successful game launched in history. And it is obviously a game for mobile and it uses Augmented Reality so it is also an AR game.

While many discovered the magic of AR via Pokemon Go, that is not the start of the AR journey. This blog has been chronicling AR from literally its beginning via such pioneers as Layar and the iButterfly. My TEDx Talk in Hong Kong was about AR (has had over 30,000 viewings and many say its the must-see TED Talk about AR). I explained how AR will become a mass media. Now when you consider Pokemon Go and you watch that video, you can see the elements of Pokemon Go are all in that talk I gave years ago. I made a prediction back then that AR will become a mass media. That AR would be the 8th mass media. This is not my invention, Raimo Van der Klein actually came up with that point, I just adopted it from Raimo. And now for the year that just ended, we are having meaningful numbers we can start to report. We have enough data that we can report the annual revenues of AR. I added the AR chart to the 'Other Services' chapter and measured that AR today is worth 3 Billion dollars worldwide. Here is the chart from the Almanac (it was the most requested chart in my vote where I gave out 3 charts for free out of the Almanac)




Augmented Reality Revenues Globally $3 Billion USD in 2016 
Source TomiAhonen Almanac 2017
This chart may be freely shared

Now if you want to read more about Pokemon Go and my recent analysis of its global phenomenon especially its metrics, go here.

If you want to read more about the first 7 mass media, read my book about it called.. Mobile as 7th of the Mass Media

And if you want to see all the data about mobile media today, including AR, then read the TomiAhonen Almanac 2017

The Three Charts Requested by Fans: Made Free by Popular Demand from TomiAhonen Almanac 2017 Edition (Updated 2x)

We had a contest here on the blog and on Twitter. I asked fans and followers to vote for which chart they wanted out of the TomiAhonen Almanac 2017 that was just released over the weekend. Here are the three charts that got the most votes. These charts are for you to freely use. Please quote source 'TomiAhonen Almanac 2017' as the source and if you post online, I would appreciate a link to this blog. Thank you. These are totally free to share.



UPDATE 1, 2 - 2 March 2017 & 6 March 2017 - NOTE - I will be writing a blog article about each of these three charts and the numbers and phenomena behind it. The first is already up, it is about Augmented Reality. You can find the AR article here. The second article, about internet access is now up. It is here.



Most requested chart is from Chapter 12 Other Mobile Content. It is the chart 'Augmented Reality Revenues 2009-2016' This is a new chart that was not in the 2016 edition of the Almanac. So this is the winner:






The chart that got the second most votes was from Chapter 6, Mobile Internet. It is chart Internet Access Method Allowing Multiple Methods. Here is this requiested chart for you:






And the final chart to get popular support the third most is from Chapter 8 Mobile Gaming. It is chart 'Total Mobile Gamers Globally 2003-2016'. Here is that chart as requested by fan vote.







Thank you for voting. If you want to see more about the TomiAhonen Almanac 2017 - which runs 215 pages, has 107 charts and tables like those three above, then please go to this link where you can also buy the Almanac if you want. It only costs 9.99 Euros so it won't bankrupt your budget either. Best value for mobile statistics anywhere. I will also include the full table of contents here for you and I will also put direct links to Paypal for your convenience at the bottom of this blog article:

 

TABLE OF CONTENTS TOMIAHONEN ALMANAC 2017
(includes changes vs 2016 edition & vs 2015 edition)
ebook is 215 pages long and has 107 charts and tables

file is unrestricted standard pdf file, less than 2mb in size, does not need any ebook reader app, any program that can open pdf files can read the ebook

ebook is formated for easy reading on smartphone screen sizes (thus its an ‘m-book’)


Cpt 1 - INTRO (4 pages, no charts)

Chpt 2 - SIZE OF INDUSTRY (20 pages, 10 charts)

(Chart 1) Total Mobile Subscriptions Globally in Billions (Machine Use & Human Use) 2002-2016 (chart expanded vs 2015 version)

(Chart 2) Mobile Industry Revenue Split in 2016

(Chart 3) Mobile Industry Revenuess 2016 & 2015

(Chart 4) Mobile Service Annual Revenues 2003-2016

(Chart 5) Comparison of Sizes Globally End of 2016

(Chart 6) Annual Sales of Major Devices by Type

(Chart 7) Largest Computer Manufacturers (When Smartphones Includes in Computer Count)

(Chart 8) Penetration Rates of Mobile per Capita, Regionally

(Chart 9) Internet Access PC vs Mobile 2016

(Chart 10) Top 25 Largest Companies in Mobile in 2015

Cpt 3 - CUSTOMERS (15 pages, 8 charts)

(Chart 11) Mobile Subscriptions, Phones in Use and Unique Owners 2003-2016 (chart expanded vs 2015 version)

(Chart 12) Unique Phone Owners & Multiple Suscribers Regionally

(Chart 13) Mobile Consumers 2016 & 2015

(Chart 14) Mobile Phone Ownership by Age

(Chart 15) Common Usage of Phone Features

(Chart 16) Average Mobile Phone User Looks At Mobile 150 Times Per DAy

(Chart 17) Average Smartphone User Looks At Mobile 221 Times Per DAy

(Chart 18) 30 Minute / 3 Minute / 30 Second Tasks

Cpt 4 - HANDSETS (21 pages, 17 charts)

(Chart 19) Mobile Phone Sales Annually

(Chart 20) Phone Market Shares

(Chart 21) Features of Installed Base 2016 & 2015 (chart expanded vs 2015 version)

(Chart 22) New Phone Sales by Generation 2002-2016

(Chart 23) Installed Base of Cameraphones by Camera Resolution 2004-2016

(Chart 24) Tablet PC vs Phablet Sales Annually 2007-2016 (more detail vs 2016, is new chart vs 2015)

(Chart 25) 11 C's

(Chart 26) Smartphone Migration Rate 2000-2016 (new table vs 2016 and 2015)

(Chart 27) Price Pyramid of Mobile Phones 2016

(Chart 28) Smartphone New Sales and Installed Base 2002-2016

(Chart 29) World Ownership of Mobile Phones by Type (is new chart vs 2015)

(Chart 30) Smartphones Out of Installed Base of All Phones

(Chart 31) Smartphone Ownership Per Capita vs Dumbphone Ownership Regionally (chart expanded vs 2015 version)

(Chart 32) Smartphone New Sales in Units 2016

(Chart 33) Operating System New Sales 2005-2016

(Chart 34) Smartphone OS Installed Base 2016

(Chart 35) Smartphone OS Regionally

Cpt 5 - MOBILE MESSAGING (15 pages, 11 charts)

(Chart 36) SMS Users and Total Human Subscriptions 2003-2016

(Chart 37) SMS Text Messages Sent 2003-2016

(Chart 38) Installed Base of Messaging-Capable Phones by Type 2001-2016

(Chart 39) SMS Text Messaging Annual Revenue vs Premium SMS 2003-2016 (more detail vs 2016 and 2015)

(Chart 40) Average cost of SMS 2003-2016

(Chart 41) Mobile Messaging Revenues by Type

(Chart 42) Messaging Users by Type of Mobile Messaging 2002-2016

(Chart 43) MMS Messaging Revenues 2004-2016

(Chart 44) MMS Messages vs SMS Text Messages in Messaging Volume 2004-2016

(Chart 45) Migration of Person-to-Person SMS Message volume to OTT Messages 2007-2016 (Proportional) (new chart vs 2015)

(Chart 46) Migration of Person-to-Person SMS Message volume to OTT Messages 2007-2016 (Absolute)

Cpt 6 - MOBILE INTERNET (16 pages, 9 charts)

(Chart 47) Mobile Human Subscriptions, Messaging and Premium Data Users 2003-2016

(Chart 48) Mobile Data User Numbers by Different Definitions

(Chart 49) Internet Access by Type Allowing For Multiple Use 2002-2016

(Chart 50) Access Method of Internet Users 2016

(Chart 51) Internet Access Method Allowing Multiple Methods (SEE SAMPLE ABOVE)

(Chart 52) Mobile Data Users Regionally

(Chart 53) Total Mobile Data Revenues 2003-2016

(Chart 54) Mobile Premium Data Revenus as Average Per Subscriber 2003-2016

(Chart 55) Mobile VAS Data ARPU by Active VAS User 2003-2016

Cpt 7 - SEVENTH MASS MEDIA (13 pages, 8 charts)

(Chart 56) The Seven Mass Media

(Chart 57) Cannibalization Threat by Media Channel

(Chart 58) Major Media and Communication Audience or Reach (is new chart vs 2015)

(Chart 59) 9 Unique Benefits of 7th Mass Media

(Chart 60) The 6 M's Mobile Service Creation Tool

(Chart 61) Mobile Content Revenues by Type

(Chart 62) Mobile Media Markets by Revenues Regionally

(Chart 63) Mobile Media Average Monthly Revenue Regionally

Cpt 8 - MOBILE GAMING (6 pages, 4 charts)

(Chart 64) Total Mobile Gamers Globally 2003-2016 (SEE SAMPLE ABOVE)

(Chart 65) Gaming-Capable Phone Installed Base 2004-2016

(Chart 66) Mobile Gaming Revenues 2003-2016

(Chart 67) Gaming Revenues Regionally

Cpt 9 - MOBILE TV AND VIDEO (6 pages, 4 charts)

(Chart 68) Mobile TV/Video & SMS-TV users 2003-2016

(Chart 69) Installed Base of Videoclip-Capable Pones 2002-2016

(Chart 70) Mobile TV Video and TV-Interactive Revenues 2003-2016

(Chart 71) Mobile TV Videoclips and SMS-to-TV Revenues by Type

Cpt 10 - MOBILE MONEY AND PAYMENTS (6 pages, 4 charts) NEW CHAPTER vs 2016 and 2015

(Chart 72) People Making Mobile Payments 2006-2016 (new chart vs 2016 and 2015)

(Chart 73) Mobile Money Users by Technology (new chart vs 2016 and 2015)

(Chart 74) Mobile Money Users Regionally (new chart vs 2016 and 2015)

(Chart 75) Mobile Payment Adoption Rate Regionally (new chart vs 2016 and 2015)

Cpt 11 - MOBILE SOCIAL NETWORKING (6 pages, 3 charts)

(Chart 76) Mobile Social Networking Users 2002-2016

(Chart 77) Mobile Social Networking Revenues 2004-2016

(Chart 78) Mobile Social Networking Regionally

Cpt 12 - OTHER MOBILE CONTENT (13 pages, 6 charts)

(Chart 79) Mobile Music Consumers 2003-2016

(Chart 80) Mobile Music Revenues 2003-2016

(Chart 81) Consumers of Mobile News 2003-2016

(Chart 82) Mobile News Revenues 2003-2016

(Chart 83) Augmented Reality Annual Revenues 2009-2016 (new chart vs 2016 and 2015) (SEE SAMPLE ABOVE)

(Chart 84) Adult Entertainment as Percent of All Mobile Content 2002-2016

Cpt 13 - SMARTPHONE APPS (6 pages, 3 charts)

(Chart 85) Smartphone App Market Revenues by Type 2003-2016

(Chart 86) Distribution of Mobile Data Revenues by Type 2003-2016

(Chart 87) Consumer App Store Revenues by Type

Cpt 14 - MOBILE ADVERTISING (11 pages, 8 charts)

(Chart 88) Mobile Advertisements Delivered Annually 2004-2016

(Chart 89) People Receiving Mobile Advertising 2003-2016

(Chart 90) Advertising-Capable Mobile Phone Installed Base by Type 2003-2016

(Chart 91) Mobile Advertising Revenues 2003-2016

(Chart 92) Mobile Advertising Average Revenue per Subscription 2002-2016

(Chart 93) Mobile Advertising ARPU by Audience Receiving Ads per Month 2002-2016

(Chart 94) Role of Advertising as Part of Mobile Media Revenues 2003-2016

(Chart 95) Revenues of Mobile Advertising by Type

Cpt 15 - VOICE CALLS (5 pages, 2 charts)

(Chart 96) Voice Call Revenues 2003-2016

(Chart 97) Active Users of Outbound Voice Calls 2003-2016

Cpt 16 - BUSINESS ENTERPRISE SERVICES (3 pages, 1 chart)

(Chart 98) Enterprise Customers Out of All Unique Subscribers 2004-2016

Cpt 17 - OTHER MOBILE DATA (5 pages, no charts)

Cpt 18 - NETWORK INFRASTRUCTURE (2 pages, 1 chart)

(Chart 99) Mobile Subcribers by Network Generation 2005-2016

Cpt 19 - DIGITAL DIVIDE (9 pages, 3 charts)

(Chart 100) Digital Divide per Capita

(Chart 101) Digital Divide - Handsets

(Chart 102) Digital Divide - Mobile Economics

Cpt 20 - HISTORY AND MILESTONES (8 pages, no charts)

Tables (11 pages)

Index of Mobile Leadership (Top 30 Countries)

60 Major Countries (Population, Subscribers, Penetration Rate, Unique Users, Network Technologies, 3G launch, MVNO availability)

25 Leading Countries by Subscriptions

25 Leading Countries by Penetration Rate

25 Largest Mobile Operator Groups



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