Communities Dominate Brands

Mobile Services Beyond Messaging? Excellent TNS Global Survey Reveals Tons

While that Nokia market share collapse is going on, there is life elsewhere. I've been chronicling on this blog the rise of the mobile data economy since my first book came out on the topic more than ten years ago. Early on we saw services around very basic digital technologies like SMS and WAP. Then we started to see more powerful services like MMS and gradually HTML web based solutions for mobile. Now we see smartphone apps and QR codes and Augmented Reality and a whole host of newer technologies. 

The data on their usage has always been scarce, and I have been eager to publish here when we had global or regional or sometimes even national data on significant mobile service use. I've chronicled the long rise of SMS text messaging which is now nearing 'Peak SMS' user, usage and revenue levels (SMS has not yet peaked, don't worry, but Peak SMS is coming soon, as OTT services are rapidly cannibalizing the users and usage, especially the heavy users). I've reported here on this blog that SMS has reached 5 Billion active users by end of 2011, and generated revenues of 126 Billion dollars. MMS is the second most widely used data service on the planet, still growing strongly globally, which has 2.5 Billion active users and generated 39 Billion dollars in 2011. Then I've occasionally reported on some of the early 'mobile web' users and usage, like news, search, gaming, music and advertising on mobile. Today I have something magnificent, on the more advanced uses in mobile, courtesy of TNS.

TNS has run a global survey across 57 countries covering 48,000 people on all six inhabited continents. It is one of the largest if not the largest survey of its kind in mobile usage, with a harmonized set of questions. And differing from most major global surveys done in the past decade, they didn't bother with the basics of who uses a camera on their phone or who sends SMS text messages, haha, those are widely known. TNS went digging much deeper. Who uses QR codes for example (!) and the mobile wallet, etc. They also surveyed who download apps, who use WiFi on their mobile phones and who use the mobile web ie do browsing on the phone. Very VERY interesting findings.

I've been digging through the numbers, you can actually go and see the individual data on very many data points, for each of the 57 countries, so wherever you live, I suggest you go see your country (or if its not included, then some of the neighboring countries). This is remarkable data, out in the open and public domain. Thank you TNS for a brilliant study and for making so much of the data available.

BIG PICTURE: APPS & WEB

So, lets start first with the big picture. TNS surveyed mobile phone users (not networks for their 'subscribers' so this is pretty accurate human usage data, not skewed by stats where some countries now have over 200% mobile phone subscription penetration rates. But as TNS only reports the data as percentages (and I couldn't find a global number), I calculated each of regions, as I use in the TomiAhonen Almanac series of annual statistics, and then used the actual 'unique user' statistics from the Almanac to calculate regional usage data for each category TNS reports. Then I added them up, so we get the following, quite astonishing usage numbers:

Mobile Browsing, ie 'mobile web' or 'wireless internet' use on mobile phones has reached 1.6B unique users, based on TNS data, and calculated across the regional unique user numbers of my Almanac for year 2012. This is measured data by TNS, and it removes multiple users by the same person - ie if you have a Blackberry and iPhone, and do your emails on your Blackberry (thus using the internet on a phone) and do your web surfing on the larger screen of the iPhone (also using the internet on that phone), you are using the mobile internet on two devices. But you are one person. TNS data, when multiplied across the current unique user base globally, tells us there are 1.6 Billion unique people using the mobile internet ! (remember, some of these will use the internet also on a PC). This compares by the way to 1.8 Billion that I counted as total subscriptions used for mobile browsing (allowing multiple handsets by one person). Very consistent data. And yes, the world has about 2.4 Billion active internet users so the 'midway point' of how many people use a mobile phone to do (at least some of their) internet surfing has obviously passed years ago, not like some misguided analysts keep promising that this point will come in the near future. It has happened already! Get over it. Most of the users on the planet who access internet content on browsers, do so on mobile phones, not on PCs or tablets. Obviously this type of browser-based activity is not limited to smartphones, most featurephones have full HTML browsers and even older basic phones tend to have simple WAP browsers. Still, 1.6 Billion unique mobile internet users, that is a massive number, where the global total of PCs is under 1.4 Billion and they are not all yet connected to the internet..

Apps are a big growing area of excitement in mobile. How many mobile phone owners use apps today? 1.1 Billion worldwide. Note, this is significantly more than the total installed base of all smartphones in use of about 900 million worldwide today. Why is that? Because obviously it includes apps downloaded to simpler, 'featurephones' that usually accept Java or Brew based apps. Yes. 1.1 Billion people currently download and use apps on their phones. Big opportunity indeed. But do remember, this is a vastly fragmented world, with 350 million Androids, 275 million Symbians, 150 million iPhones, 80 million Blackberries, 30 million old Windows Mobiles, 12 million badas, 9 million newer Windows Phones, plus many hundred million Java/Brew based featurephones. And tons of small OS platforms like Palm, LiMo, MeeGo, Maemo, etc. And keep in mind, the mobile web user base is dramatically bigger.

WIFI USERS

Then lets take a look at the WiFi threat to the industry. Who is using WiFi? This is very useful data, we haven't had anything like this before in the public domain. Out of 6 Billion mobile phone subscriptions in use in the world, and 4.0 Billion unique users, how many access the internet via WiFi? 1.0 Billion thats who. Yes, again, more than the total installed base of smartphones at about 900 million (because many featurephones include WiFi). What is that as a percentage of all unique users? Yes, 25% of the global mobile phone user base is already using WiFi services today.

This is one area which has a very clear regional split, according to the TNS findings. When I grouped the 57 countries according to my TomiAhonen Almanac split to 8 regions, we find WiFi usage divides like this: in the Industrialized World 35% of us use WiFi on our phones, but in the Emerging World markets, only 12% do so. The highest use is in Advanced Asia-Pacific where 42% of us use WiFi on our phones. Meanwhile the lowest use is, not surprisingly, in Africa where only 3% of mobile phone owners use WiFi based services on their phones.

MOBILE SOCIAL NETWORKING? BIGGER THAN FACEBOOK

And what of social networking on mobile? This is a massive number. We've heard that the majority of Facebook users today access FB on their mobiles, but what is the global number for social networking users on mobile? According to TNS numbers, again multiplied by the unique users as per my Almanac, we get to .. 1.3 Billion currently active users of social networking on mobile! Yes, thats QQ and Mobage and Cyworld and Mig33 and all those other social networks that I identified recently on this blog in the first global survey of the space. 1.3 Billion say 'Communities Dominate Mobiles' haha.. Excellent.

QR CODES, M-WALLET

And what of QR Codes and Mobile Wallet. These are VERY interesting numbers too. QR Codes are rapidly gaining acceptance worldwide. How many of us use them? 380 million already are active users of QR codes globally. Japan, Hong Kong and South Korea lead globally with 60%, 47% and 43% of their mobile phone owners currently using QR codes. But even regionally, while Advanced APAC region leads (27%), North America (19%) and Western Europe (14%) are rapidly following suit. 

How about mobile wallets. Here the TNS study has perhaps had some questionnaire issues, when we look at for example Philippines and Kenya numbers, so this is not 'mobile payments' users or 'mobile banking' users which will be significantly bigger, but lets consider this as a 'floor' level for more advanced mobile wallet solutions perhaps. The real user number of mobile payments is definitely bigger. But yes, what did we find? The world today has 290 million users of mobile wallets. That is also a very big number considering how recent the innovation is.

There is very much more in the TNS data, please go dig through it for yourself. Let me end here with two relevant regional splits of the advanced service usage, that is new data for us globally:

MOBILE SOCIAL NETWORKING USERS, REGIONALLY

The number of users of social networking, as a percentage of all unique users, and a total number are:

REGION . . . . . . . PERCENT . . . ACTUAL USERS
North America . . . 34% . . . . . . . 114 M
West Europe . . . . 31% . . . . . . . 127 M
East Europe  . . . . 16% . . . . . . .   54 M 
APAC Advanced  . 40% . . . . . . . 149 M
Asia Developing . . 13% . . . . . . . 474 M
Middle East . . . . . 29% . . . . . . .   74 M
Africa  . . . . . . . . . 11% . . . . . . . 113 M
Latin America  . . . 33% . . . . . . . 200 M

TOTAL  . . . . . . . . 33% . . . . . . . 1.3 Billion

Source: TomiAhonen Consulting May 2012 estimate, based on TNS Global Survey April 2012 and TomiAhonen Almanac 2012 
This data may be freely shared

QR CODE USERS REGIONALLY

And this is exciting to see, the first global survey of QR Code users, by the same methodology, split regionally for you:

REGION . . . . . . . PERCENT . . . ACTUAL USERS
North America . . . 19% . . . . . . . 65 M
West Europe . . . . 14% . . . . . . . 59 M
East Europe  . . . .   5% . . . . . . . 15 M 
APAC Advanced  . 27% . . . . . . . 99 M
Asia Developing . .   1% . . . . . . . 36 M
Middle East . . . . .   6% . . . . . . . 16 M
Africa  . . . . . . . . .   1% . . . . . . . 16 M
Latin America  . . . 12% . . . . . . . 74 M

TOTAL  . . . . . . . . 10% . . . . . . . 380 M

Source: TomiAhonen Consulting May 2012 estimate, based on TNS Global Survey April 2012 and TomiAhonen Almanac 2012 
This data may be freely shared

Lovely to have such good strong data on how this industry is growing. Thank you TNS ! And anyone who is interested in recent global mobile data, remember the TomiAhonen Almanac 2010 edition (still very recent data) is totally free for you, complete and uncensored, as my gift to my readers. Please visit Lulu.com to download your free copy of TomiAhonen Almanac 2010 Free Edition.

Video of my Keynote in New Zealand on Future of Telecoms

This is a video of me in Auckland New Zealand two weeks ago, where I delivered the keynote to the Telecomnz confernce called Tel.Con. 




The presentation looks at how will money be made in the future of telecoms. I discuss such critical topics to telecoms as 'Peak SMS' how long can text messaging revenues and profits sustain mobile, smartphone migration rate, how long will it take and can all phones become smarthpones, and my latest view to the Grand Convergence we will see this decade. I talk about the astonishing developments in mobile money, the 9 Unique Abilities of Mobile, and what happens when money and advertising merge - ie Advocurrency. The presentation runs 50 minutes and the video is very well produced. Oh, and even if you don't want to see the full video, check out the video at about 47:30 what happened on stage haha, this is a memorable event for me for that reason (was first time for me haha)

Ok, Am Willing to Call It: AR is the 8th Mass Medium (Augmented Reality)

I'm the guy credited with the term '7th mass medium' which explains why mobile is unique and distinct mass media from say comparing to the internet or TV or print. Since my book came out (Mobile as 7th of the Mass Media) in 2008 (a global tech bestseller, thank you all who bought it) - many keep asking me what is the 8th mass media. And up to now, I have said I don't know.

Last year a friend and colleague of mine, Raimo van der Klein (a long-time MoMoista - Mobile Monday - from the Amsterdam MoMo chapter) now the CEO of Layar, the Augmented Reality (AR) browser company, suggested that AR is the 8th mass medium. I thought about it then, and as the only commercially practical uses of AR in 'mass market' uses (for consumer media, not for example military goggles for fighter pilots) were on smartphones, I felt AR was only a media format for mobile. I did immediately accept that AR was at least the 8th unique ability of mobile haha, for which obviously Raimo gets the credit. And I told him I'd keep my mind open about it and consider what evidence we might have of the future of AR.

Now I read a Tweet from another very dear friend of mine, Antti Ohrling, known in the past for co-creating Blyk and earlier for his award-winning digital ad agency of Finland, Contra. Antti is one of those superduper bright people that whenever you meet, you feel like you want more time, and just hope you could take a tin-can opener, open up their brain, and just eat it all.. Like you know, our Alan Moore, or Dan Applequist or Jouko Ahvenainen or Richard Ting or Jonathan MacDonald or Lars Cosh-Ishii or Russell Buckley or Matti Makkonen or Mike Smith or Rory Sutherland. People who really REALLY get mobile - and get digital - and have lived this industry for decades and have enormous insights. So Antti retweeted something about those cool Google glasses we heard of last week. He did not even make the statement that shook me, it was an article written at Tech Crunch by Josh Constine, entitled 'Apple and Facebook should be Terrified of Google-Tinted Glasses'. Now, the headline is somewhat typical 'hype' headline as most modern tech articles seem to be (just look at my overhyped blog article titles often haha). But for Antti to bother to retweet that, I sensed Antti agreed with the sentiment of that headline..

And I would trust Antti's judgement 100% (I am tempted to say 101% but I am too much the stats-nut to know its not possible to give more than 100% haha) and it didn't take me long into that article for a massive thought to emerge. Yes, AR is cool on smartphones. But that is 'part time' use of AR. What if AR was the first unavoidable mass media channel? The first pervasively consumed mass media? Mobile phones as we know from the 7th Mass Media theory, have unique abilites such as being always connected and being permanently carried. So too will be AR (on glasses) but we don't consume media on our phones in uninterrupted way. The media consumption is in our pocket but we also put it into our pocket, away. These AR glasses by Google will change all that. We are seeing the birth of the first pervasive mass media (that might not be the best term, I have to think about it). So yes, am ready to call it. Augmented Reality is the 8th Mass Medium. And thank you Raimo van der Klein for discovering it, and for first postulating that might be so. I am your first convert haha. Here is the new list in order of their introduction:

1st mass media PRINT - from 1400s (books, pamphlets, newspapers, magazines, billboards)
2nd mass media RECORDINGS - from 1890s (records, tapes, cartridges, videocassettes, CDs, DVDs)
3rd mass media CINEMA - from 1900s
4th mass media RADIO - from 1920s
5th mass media TELEVISION - from 1940s
6th mass media INTERNET - from 1992
7th mass media MOBLE - from 1998
8th mass media AUGMENTED REALITY - from 2010

Note also how instrumential Google has been in this development. The first Layar AR mass market solutions were on Android smartphones. And now again its Google goggles that helped jumpstart this fledgling media industry. Wow. Google is 'creating' a massive digital media environment for itself to thrive in. If anyone learned the lesson of 'creating new market space' haha as Alan Moore and I argued in the signature book to this blog, Communities Dominate Brands, where we used Apple's iPod and iTunes as the perfect case example - haha, Google learned that lesson and then put the Google massive scale spin to it indeed. This is a new mass medium and it will be massive. MASSIVE. I would suggest immediately that it will be far bigger than the 5th media TV and 6th media internet, and I am willing to suggest, it may become bigger than mobile the 7th media itself. Awesome!

I will return with much more on this but for now, wanted to post it and celebrate. Now we know what came after mobile as a mass media channel, it is AR. Feel free to share the info, the updated list, and links to this blog. Am looking forward to comments!

Largest Mobile Social Networks Today by Size of User Base

Facebook has just bought Instagram for a cool 1 Billion dollars. Congratulations to both. But the news seems to be suggesting Instagram is the biggest mobile social network. It is far from that. It may be the biggest social network purely for mobile - in the USA - but that is hardly the biggest in the world. I became curious to find a convenient list of the biggest social networks on mobile, thinking surely such a list exists somewhere - this being the hottest focal point and future direction of the hottest industry right now. I was surprised such a list doesn't exist (or at least I was unable to find one easily). I think a good page should be set up at Wikipedia but while we await that, lets collect my best understanding of the biggest social networks as measured by their mobile users. This includes both 'pure' mobile social networks and the most recent counts of the largest online social networks by their mobile user base. No surprise who shows up on top, either..

LARGEST SOCIAL NETWORKS ON MOBILE, END OF 2011

Social Network (Owner) . . Users . . . Home Base

Facebook mobile . . . . . . . 425 M . . . USA
Mobile QQ (Tencent)  . . . . 200 M . . . China
Sina (Weibo) . . . . . . . . . . 150 M . . . China
RenRen  . . . . . . . . . . . . . . 61 M . . . China
iMessenger (Apple)  . . . . . . 58 M . . . USA
Mig33 . . . . . . . . . . . . . . . . 55 M . . . Singapore
Twitter mobile . . . . . . . . . . 55 M . . . USA
Blackberry Messenger . . . . 50 M . . . Canada
Mxit . . . . . . . . . . . . . . . . . 50 M . . . South Africa
Nimbuzz . . . . . . . . . . . . . . 50 M . . . Netherlands
Skype Mobile (Microsoft) . . 40 M . . . USA
Gree . . . . . . . . . . . . . . . . . 35 M . . . Japan
Instagram . . . . . . . . . . . . . 30 M . . . USA
Mobile Cyworld (SK)  . . . . . 25 M . . . South Korea
Mobage Town (DeNA)  . . . . 25 M . . . Japan
Mocospace . . . . . . . . . . . . 22 M . . . USA
Whatsapp . . . . . . . . . . . . . 20 M . . . USA
FourSquare . . . . . . . . . . . . 15 M . . . USA
Mixi . . . . . . . . . . . . . . . . .  15 M . . . Japan
MyGamma (Buzz City)  . . . .  5 M . . . Singapore
Flirtomatic  . . . . . . . . . . . . .  4 M . . . UK
Itsmy  . . . . . . . . . . . . . . . . . 3 M . . . Germany
Funbook (XL)  . . . . . . . . . . .  2 M . . . Indonesia
Frenclub . . . . . . . . . . . . . . .  1 M . . . Malaysia

Source: TomiAhonen Consulting Estimates April 2012
The above information may be freely shared

Please note, that this is a preliminary and incomplete listing. Secondly, before you complain that Facebook has over 800 million users etc, remember, I am counting the MOBILE users.

Thirdly, I would welcome any and all corrections and revisions, especially any mobile social networking services that are missing from the above listing. There are many national and regional social networks that are almost impossible for me to discover and find, especially when their native language is other than English.. So please accept the above list as 'preliminary and incomplete' as of 10 April, I hope to be able to add a lot more to it, as I post this blog and also request assistance from my Twitter followers and the Forum Oxford community.

A few special mentions. I could not find any official number for Skype Mobile users. I did find Android and iOS Skype app download numbers. From the iOS number I arbitrarily assigned Apple's iPhone percentage ie 58% as in the strict definition of 'mobile' the iPod Touch is a portable/pocketable device, not a 'mobile' device, and the iPad is an ultraportable PC but not a 'mobile' device, only true cellular permanently connected pocketable devices (ie those that 'ring in the pocket') fit the definition of a mobile device. Hence I only count iPhones not iPads or iPod Touch's and used that iPhone percentage of all iOS devices. And I assumed that of all Skype apps ever downloaded, still 90% are in use on smartphones (total wild guess, I have no better data). Same with the iMessenger number as 58% from total Apple official iMessenger users, except obviously am counting 100% of the iPhone iMessenger users being active as its a relatively new service vs Skype thats been around much longer.

But yes, as a service to all who are intersted in social networking, or mobile, or mobile social networking haha, please accept the above as a listing of the biggest social networks today, by the count of their mobile phone based users.

And one shameless plug, as it is directly relevant to this blog posting. For those who want to read more about the fastest-growing part of the digital space, where the biggest money is being made right now, you may want to read the first book that focused only on the mobile side of social networking, Tomi Ahonen Pearls Vol 2: Mobile Social Networking. The ebook runs 173 pages and costs only 9.99 Euros. Take a look at the book description here, the only place where the ebook is sold: Tomi Ahonen Pearls Vol 2: Mobile Social Networking.

All Roads Lead to Mobile - World Cyber Games to go Mobile-Only

Its 30 years from the first home videogaming console this year. Happy birthday Odyssey (later bought by Philips/Magnavox). We had one of those consoles, I believe it was the first Odyssey in Finland (it was on the US TV NTSC standard obviously, so even after the adapter to our TV set, we only got the black-and-white version visible on our TV screen, haha, but it being essentially ten variations of 'Pong' - that was not much of a loss. And yeah, this was the game where you had to place a translucent plastic sheet on the TV screen, to know which game you were playing. A few years later, we got the more advanced Philips/Magnavox Odyssey 200, which was on the European PAL standard and plugged directly to our TV set.. Our household was very popular for all the cool gadgets we always had haha)

So, fast forward 30 years, and we're now in 2012. I just saw Patryk Zabicki ie @p47 on Twitter forward a breaking story about the world championships in videogaming. Didn't you know they exist? Sure, the world champs tend to come from South Korea where there are tons of professional videogamers and several TV stations broadcast videogaming action 24 hours a day. I wrote about that all in my 2007 book Digital Korea with Jim O'Reilly, in the gaming chapter.

So yes, the world championships in videogaming are called the World Cyber Games (WCG). And today the Cadred website reports that after 12 years, the World Cyber Games this year will for the first time abandon the other platforms, in particular the PC based gaming, and will only feature championship gaming and thus championships in mobile games. Why? Because traditional game makers are all shifting to mobile. Why is that? We know, haha, because as I say about the 7th Mass Medium: "Mobile is the magical money-making machine" of course. Yes, the CEO of the WCG, Brad Lee explains in his letter to members that game makers are all increasingly making most of their money from mobile. Hence the current plan (not yet finalized) for the WCG is to make this year's event a mobile gaming only event where all prizes will be for games on mobile. Cool!

Some Cases of Mobile Advertising Excellence from Around the World

This blog has had a lot of focus on smartphones and Nokia recently (for many reasons) but mobile is much bigger than the handsets side, and smartphones only formed a third of all new phones sold towards the end of last year. Today I want to talk about mobile services, and focus on the media side - and a very exciting space in it, mobile advertising.

I do mobile marketing and advertising workshops and seminars all around the world. I was just with Sanoma Media and Telegraaf Media in Amsterdam a few months ago, was in Guatemala with Tigo for some mobile advertising workshops there, was with the MMA in Istanbul doing a series of mobile marketing workshops, did a series of keynotes at the Google Think Mobile event series here in Asia, and the keynote to SOCAP the Society of Consumer Affairs Professionals ie the 'Customer Relationship Experts' at their big annual event in Orlando, and so forth. I've been speaking with MMA (Mobile Marketing Association) events from New York City to Singapore to Sao Paulo, and doing private workshops with many companies that specialize in the mobile advertising and marketing space from ad agencies and creative agencies to major brands etc. There was a nice video of me talking about mobile advertising at the Google event in Kuala Lumpur Malaysia. 

But its been a while I've shared with you my fave stories right now. So lets do a blog about where I see excellence in the best thinking of using the 9 Unique Abilities of mobile and going beyond simply lame copies of internet and TV and print advertising. Let me show you some of my fave stories in mAd.

AN ARMY OF FANATICS

I love Jonathan MacDonald's concept of nurturing and building an Army of Fanatics. How do you engage with fans? One great example comes from Sweden. Veronica Maggio is a Swedish pop star. She decided to reward her biggest fan with a peculiar treat - his number would be the target phone number to call, to hear the Ringback tone version of Veronica's newest hit song, 'Lordagen den Femtonde Mars' (Saturday the 15th of March). This is not a ringtone. This is a ringback tone. It means you have to call that phone number to listen to it. She made ringback the launch method of her song. Her fans could not hear the song anywhere else, not on radio, not on MTV video, not online, not any other way. The fan - his name is Firat Delen, an 18 year old boy in Sweden - had his phone ringing nonstop for two weeks as the fans of Veronica kept calling his number, to hear the song. When Veronica finally launched the song for sale, it hit number 1 on the Swedish charts. Cool. And by the way, many Swedes, who called his number, didn't know of ringback tones, so it also helped bring new users for Ringbacks in Sweden. But this is a cool way to do something different in music marketing. Not to mention a great treat to the fan club.

And talking of fans, lets hop to another side of the globe but stay with music, Japan. Seeda the rap artist launched his album as a virtual adventure across Japan. For every track on his album, Seeda selected one location, and narrated a story about why that location was relevant to that song. The fans were encouraged to tour Japan and go listen to Seeda's narration of his most relevant places in Japan, and in each place obviously they could hear one track from the album as well. Cool. His album? Hit number 1 in Japan. Now rap artist Jay-Z in New York did something similar with an adventure virtual treasure hunt to promote Jay-Z's book. For every page there was a treasure hidden somewhere in New York City.

A virtual treasure hunt is clever yes, but lets now take it supercharged, and let fans join on a virtual trip with their favorite brand. Honda motorcycles in Japan introduced K-Tra in 2008, the fan club experience where fans can create an avatar and then have the avatar take rides on real Honda motorcycles based on their real riding in Japan. Any owner of a Honda motorcycle can sign up to be a host to take one virtual hitch-hiker along. The movement is tracked based on the mobile phone of the rider, and when the motorbike stops moving, the hitchhiker is deposited into that spot, until another Honda motorbike rider comes by, and your avatar is once again on the move, having an adventure. You get an alert of course whenever your avatar is picked up, and then you can monitor its travels via a map on your phone. Cool. Actual fans and owners have of course then met up in the real world too, etc. How many? 20,000 Honda fans have taken rides of over 1.8 million kilometers (over 1.1 million miles) this way (according to Infinita 2011).

This merger of the real world and the virtual world is a very hot space for advanced mobile marketing campaigns. One that is spreading, from Japan, but is already here in Hong Kong and has reached Germany too, is the Augmented Reality (AR) virtual butterfly, called iButterfly. The real world doesn't have these butterflies and probably city environments are not very conducive for the life of butterflies, but they've created a huge virtual flock of butterflies that flutter about here in Hong Kong. You can only see them on smartphones that have the requried AR app installed, and then you can go hunt for them. Different butterflies in different parts of the city and country, and every time you capture a virtual butterfly, you get a coupon. In our case here in Hong Kong one of the first users was Pacific Coffee, by coincidence my fave coffee shop in town.

Another way to do the virtual hunt is the virtual explorer. North Face the outdoors brand ran a contest to 'Conquer China'. They had a blank China map visible in the stores and online and on mobile. Anyone could take their mobile phone, go to any location in China and if first to that location, 'claim it' for North Face, just like explorers claimed islands and mountains etc for their kings and lords. A red North Face flag was planted virtually to that location, and you were the person who virtually discovered it first. The map was then starting to populate with little red flags all over. Always the first to any location would be its owner, not like with FourSquare with whoever came there the most to become its mayor. And in a campaign of under three weeks, a total of 650,000 red flags were planted in China. Every flag also of course gave its heroic explorer a coupon for a discount at North Face. Does this kind of marketing work? Try doubling sales! Grew sales in fact by 106%. And it drove a lot of footfall to North Face's stores, helping fans find the stores.

And returning conveniently back to Sweden, yet another variant is the race to steal the virtual car. Mini ran a campaign in Stockholm, where they parked a virtual Mini in Stockholm. Then whoever got near enough to the Mini, would 'capture' it, or 'steal' it. Then the person would start to run away with it. Other fans could see on a map where the stolen Mini was, and whoever got near enough to the person holding the Mini, would then capture it. This race had big coverage in the Swedish media as Mini fanatics all around Stockholm were in this race to chase whoever held the Mini. The person who had the Mini at the end of the game? Won a real Mini car.

CLICK-THROUGH RATES

And then there is the interactivity. The beautiful thing about mobile is that we can accurately measure it, and with it. Like I say in my workshops, Mobile is the Magical Measurement Machine (the 6th unique benefit of mobile in fact). So bear in mind that online, typical ad campaigns will get far under 1% click-through rates. On mobile you can of course copy the same boring banner ad campaign and actually get far better click-through rates like 4% or 5% or 6%. If that is the level your mobile experts deliver for you, fire them now. On mobile we can do far far FAR better than that. What do I mean?

Then lets go to the UK. The myth about mobile ads is that concept of location-based ads that are used to pester us when we go to a shopping mall etc. That concept was proven untenable eleven years ago and I explained why in my early books. But I also asked for the 'when Madonna plays at Wembley Stadium' concept of venue-based ads, that are targeted not by the shopping mall or main street in town, but by what artist or sports activity is happening at the big sports stadiums and concert halls etc. That is a specialized form of location-based advertising which I promised would work. And now we have the evidence. The O2 venues in the UK have been using events-based venue advertising on mobile, obviously targeting the fans of whatever activity was happening, across the big O2 venues like the Millenium Dome in London. How successful? 20% click-through rates. 

RESPONSE RATES

A more powerful and relevant measure than click-through rates, and one that is harder to achieve, is response rates. A click-through may happen accidentially, and also the click-through includes those who were curious but not convinced. They click but do not want to continue with that brand or campaign. A response rate is more involvement by the participant, they have actively decided to participate in the interactive campaign. Obviously response rates online are infinitessimally small. What do we see on mobile?

Then lets go to Turkey. Flo Shoes the local shoe store decided to send promotions and coupons via MMS and SMS. They sent out 900,000 total mobile advertisements. They got 160,000 responses (a 20% response rate!).

What about Egypt? Adidas ran a campaign on MMS and SMS and received a 35% response rate on their mobile ad campaign. Yes! More than one third of all who received the ad, responded to it.

REDEMPTION RATES / CONVERSION RATES

The real purpose of advertising is to drive sales (directly or indirectly). And again, on mobile we can measure the conversion rate. This is the ultimate in advertising, can we actually measure the concrete pin-pointed ad performance for a given viewer of the ad? On mobile, a well designed campaign can, of course. And we have some evidence.

I start with Blockbuster in the UK. They sent out 1 million offers and coupons to their opt-in database. 100,000 of those mobile coupons were redeemed. So the campaign achieved a measurable 10% conversion rate. Imagine how powerful that is! Compared to online where we might see 0.2% click-through rates on some banner ads. And on TV we don't know who saw it and which ad of a given ad campaign actually drove sales. But I'm not impressed with 10% conversion.

So lets go to the Philippines. HSBC bank ran a campaign on mobile to recruit new customers to its credit card. The campaign used SMS. The target customers had opted in on Globe network's subscriber base. How many were converted to new credit card customers? 15%. Thats amazing. But I am not impressed with that either.

Fine, so then lets hop over to Indonesia. McDonalds ran a mobile ad campaign for McCafe with MMS that was used to test out new flavors of iced drinks. The mobile coupons were redeemed at a rate of 16% redemption rate. Yes, one in six who received a coupon showed up at McCafe to redeem it. And that is impressive but we can do better.

Lets go to Nigeria. There Guinness beer ran a mobile ad campaign with instant rewards via SMS. It achieved redemption rates of.. 17%. And you are impressed with that? I'm not. Lets go to Japan.

In Japan McDonalds has already converted 20 million Japanese consumers as opt-in customers to McDonalds mobile advertising! How many is 20 million? Its one out of every six Japanese people alive! Not one sixth of 'adults' its one sixth of truly the whole population. How many of them redeem coupons regularly from McDonalds mobile ads? Half!

But wait, even that is not the ultimate. Alan Moore, yes 'our' Alan Moore told us at the Oxford University course on 7th Mass Media about Girlswalker, the Tokyo Girls fashion magazine and youth experience extravaganza on mobile and the real world. The fashion ads on Girlswalker mobile magazine have a conversion rate - not click-through rate, not response rate, but conversion rate - actual business generated - of 45%. Yes, out of 100 girls who see the ad for the new blouse or shoes or handbag, on average 45% will show up at a store and redeem the offer! Wow.

I WANT MORE ADS

So mobile is indeed the 7th mass medium. And yes, clearly, mobile is not the same as the internet. In fact, mobile is FAR more powerful as an advertising medium than the legacy PC based 6th mass media internet. And when mobile ad campaigns are designed well, they achieve huge click-through rates, response rates and even giant conversion rates. But the ultimate in advertising is if the consumer actually likes it so much, they literally ask for more ads. This was the concept we promised in our book with Alan Moore back in 2005, in Communities Dominate Brands, that a well-designed mobile ad campaign should be able to achieve that. And it can. This totally counter-intuitive concept is 100% alien on other media. We don't want more ads on TV or in the cinema or on radio or in our magazines or on the internet. But well designed advertising on mobile DOES produce that bizarre phenomenon - we start to ask for more. Witness Qustodian, already launched in Spain and the UK, a radical new mobile advertising service (among many other things). We heard on Facebook from a random Qustodian user, an Andrew Manley, writing "I never thought I would be asking this question in my life, but how can I receive more ads."

MAKE IT CROSS-MEDIA

But don't misunderstand me. I love mobile, but mobile is not the only media channel. In some cases yes, a 'mobile only' campaign can be great. But in most cases, mobile needs to be part of a mix of media used. And let me finish with the winner of the best mobile campaign in Turkey last year, by Garanti Bank. Its a cross-media campaign online and mobile. You get a link to the web ad, you have to give your mobile number in the opt-in process to get to view it. But then you see what looks like a TV news broadcast. The news anchor reports to the viewers that they have now reached the point where almost everybody in Turkey has a mobile banking account. But they are curious about why the last people are not signing up to it, and as they have reached now the point where there is only one person left who does not use mobile banking, the news anchor says he will call the person. And on camera, he takes an fixed landline phone and calls, looking into the camera. And then your phone rings! And when you answer, for a moment it seems like the person on the news is talking to you! After a little while you understand its not real, its a recording and they clearly are not listening to what you say. But this was a huge viral hit, where people absolutely loved it and told all friends, you have to see this ad. And yes, it obviously drove Garanti Bank to sign up tons of new customers to its banking in particular, to its mobile banking.

The advertising industry is embracing mobile now. Last year Ford became the first global brand to state categorically, that mobile was so critical, that from now on, every Ford car campaign will include mobile in it. Coca Cola offers us a good rule about how to spend your mobile budget, with their 70:20:10 rule, ie 70% spent on mobile messaging (SMS and MMS), 20% spent on the mobile web, and only 10% spent on all smartphone apps across all smartphone platforms. Or the simple guide from US food giant, Kraft, whose mobile philosophy is 'Leave no phone behind'. To illustrate how important mobile is for one of the biggest advertising companies on the planet, Google's Chairman, Eric Schmidt says: 'Put your best people on mobile.'

If you are in advertising, you are probably doing something in mobile already and are considering how to expand. I am here to tell you, that if you don't achieve these kinds of levels of success, you are not doing it right. You CANNOT try to copy the legacy media. You HAVE to learn that mobile has 9 unique abilities, and using those unique abilities, you can create SUPERIOR advertising on mobile, better than anything on any other media. If your mobile ads deliver response rates in the single digits, you are doing it wrong. Fire your agency, hire some competence to teach your team. Throw the current concepts into the waste basket and start again. Read the big names in our industry, books by Kim Dushinski and Chetan Sharma. Hire the right people to advise you like Jonathan MacDonald and Alan Moore (and me haha). Use agencies that have the competence and win the awards and deliver that kind of performance as I outline. It may be global giants like Ogilvy or specialist agencies like R/GA or D2C or Naked etc. But don't accept mediocre performance simply because it outperforms your internet advertising.

Mobile advertising launched 12 years ago and I was the first person in the world to talk about it at any telecoms conference (in Vienna). I then chaired the world's first mobile advertising conference eleven years ago in London. All of my books have included examples and case studies about mobile advertising and one of my twelve books actually is dedicated to case studies only about mobile advertising (see Tomi Ahonen Pearls Vol 1: Mobile Advertising - only 9.99 Euros for 50 case studies - see sample pages including several of the cases at the link).

For those who need an update of how the mobile advertising market evolved and grew in 2011, including the regional split of mobile advertising revenues, the total ads served, the distribution of mobile ads by type etc - there is a whole chapter on just mobile advertising in the TomiAhonen Almanac 2012 - only 9.99 Euros see more including sample pages here.

The State of the Union blog for Mobile Industry - all the stats and facts for 2012

The big statistics and numbers blog! Its that time of year, the start of a new year, and we have to update and memorize new numbers. For me this annual blog is a kind of honor, a bit like the US president who gives his 'State of the Union' speech to Congress. (The state of our industry is strong!) And the blog article will get very wide coverage throughout the year as the definitive collection of the big numbers in one place. 

So lets do a bit of the headline stuff. Two years ago we learned that the richest person on the planet was no longer from the PC industry, Mr Bill Gates of Microsoft in the USA, but that title had been taken over by Mr Carlos Slim, the mobile telecoms tycoon from Mexico whose America Movil network stretches across 240 million people and most of Latin America. Cool. This industry produced the richest person on the planet.

Three years ago I reported that mobile had passed the Trillion dollar level in annual revenues and in so doing, had become in fact the fastest new industry to reach that lofty level - television and radio never became that big, the PC industry and the internet even combined, are not that big today. Print media - all books, magazines and newspapers printed annually - never reached that level. Mobile is not just one of a handful Trillion-dollar size giant global industries like the automobile business or food or construction or banking or military spending; but mobile has set the record for the fastest growth from zero to one Trillion dollars in annual revenues. We have literally witnessed the setting of a world record in growth of any industry. Even as the world went through two economic downturns in the past ten years, mobile grew strongly through both of them.

Then last year we had Apple fighting for the lead for the most valuable corporation by market capitalization (which it has since seized and is now increasing that lead). But few remember that less than two decades ago, Apple was on the brink of bankruptcy. They brought back Steve Jobs to rescue the company, and he steered Apple to the mobile future. So much so, that the company whose official name was Apple Computer, and had launched highly successful new series of Macintosh PCs and the iPod music player and iTunes store - changed its name to only 'Apple' when Jobs announced the iPhone. Since then Apple has called itself a 'mobile' company. Today the iPhone delivers more than half of Apple's revenues and most of Apple's profits. Like I say in my seminars and workshops - Mobile is the Magical Money-Making Machine. This is very literally and factually the strongest industry on the planet, with the most robust growth, the strongest profits and thus it is the best place to be for any company or person to build a success.

But its no longer just the PC industry which is excited about mobile. Look at statements from various industry giants outside of technology. Visa said in 2011 that the future of payments is mobile. And they were not talking about contactless payment plastic cards. They were talking about mobile phones. Google's Chairman Eric Schmidt wrote on Harvard Business Review last year, that mobile money is one of Google's top priorities. What? The internet giant known for advertising intends to take on Citibank and American Express and Paypal? In mobile? Yes. Google has been mad about mobile for seven years now, and their internal mantra is 'Mobile First' - meaning that for any Google initiative today, they will deploy the mobile variant first. This from the company that set the record for fastest growth from zero to entering the Fortune 500. And they say the future of the internet and advertising (and money) is.. mobile.

Facebook and Twitter say the future of social networking is mobile. BBC says the future of broadcast is mobile. Tesco's the big UK retailer feels mobile is vital for the future of retail. Gaming is rushing to mobile (Angry Birds, anyone?) and music is already on mobile. Even print media are rushing to embrace mobile from MMS based highlight clips to Augmented Reality enhancements to print editions.

Its not just business. Government is increasingly turning to mobile. Politics is embracing mobile. Healthcare is providing assistance via mobile. Education is using mobile to help in learning. This is by far the most dynamic and most exciting industry to be in. And with that, lets start to dig into the numbers today. All data in this blog is current as of December 31, 2011 and yes, you may freely quote all the data on this blog (please list the source as TomiAhonen Almanac 2012).

5.9 BILLION SUBSCRIBERS

 

When I left Nokia ten years ago to start my own consultancy, the global mobile phone subscriber count was at 700 million - there were more fixed landline accounts (1 Billion) globally than mobile accounts. The leading countries like Finland, Hong Kong, Austria, Italy and Israel had passed 80% mobile phone penetration rate per capita, and one country, Taiwan was past 90%. Yes it was an exciting time, but even the mobile industry itself did not foresee this incredible growth. The industry expected the world to have 2 Billion mobile phone subscriptions by the end of the decade - a huge growth of tripling in size in one decade. The reality was quite different. By the end of 2010 we had 5.2 Billion mobile phone subscriptions on the planet (prepaid and post-paid, combined). All sensible analysts predicted that the growth rate would slow and nobody expected half of Africa to be connected. How wrong we all were.

Today more than 77 countries have passed 100% mobile phone penetrations per capita including the mobile laggard country, USA which finally reached that level last year. Meanwhile the leading countries continue to push past 150% and past 175% and even yes, past 200% mobile phone penetration rate - as the UAE did becoming the first country with literally two mobile phone accounts for every living person of any age.

 

The planet has a population of 7 Billion people alive. And now there are 5.9 Billion active mobile phone subscriptions. That is a global penetration rate of 84.3%. To put it another way, if we allocated all mobile phones to every living person by age, starting with the over 100 year olds, and then proceeded down every person alive getting one mobile phone subscription, today the ages we would cover comes down to everybody older than the age of .. eight! Yes, if the 5.9 Billion mobile phone subscriptions were distributed evenly, every single person on the planet age 9 or older, would have one.

Makes you think? In one decade this industry grew more than 8 fold. This mobile industry has sustained a compound annual growth rate of 24% year-on-year for a whole decade! (when measured in its paying customers, obviously, the revenue growth is not quite that dramatic while also good). Even the past year, we grew new customers from 5.2 Billion to 5.9 Billion, adding 700 million new customers in the past year. The whole mobile industry had only 700 million customers a decade ago! The growth rate of adding 700 million new customers to 5.2 Billion is still an enormous 13.5% in just one year.

Compared to the landline cousin, ten years ago fixed landline was the big brother of telecoms, at 50% bigger. Today, if a telephone rings anywhere on the planet the odds are 5 to 1, that the phone ringing is a mobile phone. Yes, the picture is so lopsided, that for 5.9 Billion mobile accounts, there are only 1.1 Billion fixed landline telephones worldwide.

When will we reach 100% per capita mobile phone accounts. Some have started to push early numbers now for 2012. I saw a Cisco projection claiming we'll hit that milestone this year. I think that is premature, but definitely by Spring of 2013, the world will pass that incredible milestone, that when measured per-capita, there will literally be more mobile phone subscriptions than people alive on the planet. I do not think we will see that number this year, but we will definitely see it by Spring of 2013.

4 BILLION UNIQUE USERS, 4.8 BILLION HANDSETS IN USE TODAY

A mobile phone subscription is not a unique user. Some still are astounded by the stats, but yes, increasingly we, perfectly normal people, are walking around with two mobile phones in our pockets. And in many markets the competitive situation is such, that consumers switch between carriers/mobile operators by swapping the SIM card, so you might have two or three or four mobile phone accounts and use one phone. Several manufacturers have introduced Dual SIM phones (mobile phone handsets with slots for two separate SIM cards, allowing the user to switch between two networks without swapping out the cards). The first Triple SIM phones have already appeared.

Just to be clear. Why two phones? Imagine having a phone from work - a Blackberry. But your employer has tight controls on what you can and cannot do on that phone. So you get yourself an iPhone as your private phone. You are now part of the population with two mobile phones (and two mobile phone accounts). If you have a data dongle for your laptop or netbook or iPad - that would be a third cellular mobile account..

I was the first telecoms expert to expose the bizarre concept of multiple phone ownership (because it happened first in Finland and it was first observed by my team when I was employed by the Finnish telecoms operator/carrier group Elisa/Radiolinja/Helsinki Telephone at the time in the late 1990s) and have been reporting on the phenomena ever since. So my consultancy has also provided the most accurate counts of how many of the planet's total mobile users are 'unique' users and how many of those accounts are second and third accounts. This is the far more relevant number to consider on a planetary migration to digital connectedness. How many 'unique' users are there on mobile, after we remove the second phones and the multiple subscriptions.

Its an easy number to memorize for this year - 4 Billion. That is the unique mobile phone user number. That is 57% of the total population of the planet, which very literally - not by statistical gimmicks - very literally do have an active mobile phone subscription (prepaid or post-paid) and at least one mobile phone handset that they use.

And you might ask what of the total number of mobile phone handsets in use. That number will be more than the unique users (some have 2 phones) and it will be less than the 5.9 Billion total subscriber number (because some only have SIM cards on rival networks sharing one phone on them). My consultancy now reports the 2011 number for total active mobile phone handsets in use and with a live paid subscription to be 4.8 Billion. Wow. 4.8 Billion pocketable digital communication devices that are in use on Planet Earth every day. Wow. That is huge.

MOBILE SUBSCRIBERS AND HANDSETS IN USE
Total mobile subscriptions (incl multiples) . . . 5.9 B
Total mobile handsets in use . . . . . . . . . . . . 4.8 B
Total unique mobile phone owners  . . . . . . . . 4.0 B

Source TomiAhonen Almanac 2012

This data may be freely quoted

How big is 4.8 Billion? There are 970 million cars registered and in use worldwide. There are 1.1 Billion landline phones. There are 1.3 Billion personal computers of any kind including desktops, laptops, netbooks and tablet PCs like the Apple iPad - all combined. There are 2.2 Billion internet users (including office use, home use, shared use at internet cafes and schools etc, and mobile internet users). There are 1.8 Billion television sets and 4 Billion radios in use globally. But 4.8 Billion actual mobile phone handsets in use! Wow, that is an enormous number. Or let me put it this way. If you take all television sets in use in the world, and add all personal computers of any kind including laptops and tablets, and add fixed landlines - their combined total - 4.2 Billion is still less than the 4.8 Billion mobile phone handsets currently in our pockets globally. Massive! Obviously much more on mobile subscribers, also regionally, and by age, and across the Digital Divide in the TomiAhonen Almanac 2012.

THE AVERAGE USER?

So with 4 Billion unique users and 5.9 Billion total mobile subscriptions, clearly there are 1.9 Billion 'second or third' (or fourth etc) accounts. How many of us therefore actually have more than one account? The number is now 1.5 Billion people or 37.5% of the total number of unique users, actually walk around with two SIM cards or more in their pocket. 400 million of those have three or more active mobile subscriptions (mostly pre-paid accounts).

And yes, 3.2 Billion people on the planet who have a mobile phone account, are satisfied (or can only afford) with one handset, but 800 million people already walk around with two phones in their pockets (some ultra-geeks like me have 3 phones, haha, but that number is too small to register in the big picture). So yes, one in five of us, literally 20% of anyone who has a mobile phone, walks around with two connected phones in his or her pockets (and/or purse in the case of the ladies..)

Its no longer 'weird' to have two phones. One fifth of all who have a mobile phone today, actually use two phones daily. Not just two accounts, two actual phones. This is a remarkably different reality from the one imagined by industry thought-leaders a decade ago, when they were planning mobile phone handsets for the future. The mantra was the perfect device, that would do 'everything' but now if we have two devices, we will of course optimize. One is great for texting - has a great QWERTY keyboard like a Blackberry, while the other is great for surfing, has a big touch screen like the iPhone. Or if we love our cameras, we have one camera-optimized phone in one of our pockets like the Nokia N8 or the HTC  Titan 2, etc.

SMARTPHONES

And what of the normal user? How many of those mobile phone handsets are smartphones then? Not that many actually. Globally the installed base is still 81% non-smartphones, what I call 'dumbphones'. Some are very advanced 'featurephones' that have cameras, big color screens, full internet browsers, and often improved input methods from QWERTY keyboards to touch-screens. These would typically cost in the 50 to 100 US dollar ranges without any handset subsidy ie no contract. Still others are of the ultra-cheap type that do only voice, SMS and have perhaps some rudimentary functions and facilities - a flashlight/torch, an FM radio and a clock. These can cost under 25 US dollars without subsidy. Many of the phones in use are older, often second hand, so there is a large pool of hundreds of millions of older Nokia models still in circulation especially in the less-affluent countries in the Emerging World. Also our younger kids often get hand-me-down phones which may be a two-year old Samsung or SonyEricsson or indeed an iPhone 3GS.

So 19% of the installed base of handsets globally are smartphones. That is an increasing ratio, last year it was 17%. The new sales of mobile phone handsets this year passed 1.6 Billion units, and 30% of them - 486 million - were smartphones. By the fourth Quarter, ie Christmas sales - a third of all mobile phones sold were smartphones. So we are well on the way on that transition which is now unstoppable, that eventually all handsets in the world will be what we now define as 'smartphones' (but the actual form factors and specifications will of course evolve).

Most who read this blog will have an interest in the Industrialized World, and with us in the most affluent parts of the planet, the migration to smartphones is well along already. In Europe the installed base of smartphones corresponds to a 41% penetration of smartphones per capita. In many individual countries like the UK, Netherlands, Switzerland and Finland, the tipping point has been passed where there is a smartphone now for half the population (bear in mind, with these 'per capita' calculations, we still have the dual phone phenomenon - so in reality some wealthy employed white-collar workers will often have two smartphones). North America passed the point last year where there is a smartphone for one third of the total population per-capita. In advanced countries of Asia-Pacific like here in Hong Kong or Australia and Singapore etc, the penetration rate of smartphones per capita is almost half, at 48%.

This tracks perfectly the sales patterns too. Last year the US market reached the point where half of new phone sales were smartphones. Europe was there a year earlier and advanced countries of Asia-Pacific were reaching the half-point of new handset sales by 2009.

But others of my readers are interested in the Emerging World (or the full global view). So lets not forget that. I can report that in the Middle East the smartphone penetration level per-capita is past one third, at 37%, slightly ahead of North America. Some of the leading countries like Qatar, UAE and Israel are well ahead of the mainstream Europeans and the Asia-Pacific region. Latin America has passed the point of a smartphone for one out of five people, the per-capita penetration rate is 22%. In the less-affluent countries of Asia, which includes most of the big population countries like China, India, Indonesia etc, the smartphone penetration rate is 12% per capita. And in Africa its still in the early days, with smartphone penetration rate of 3% per capita.

How many smartphones will be sold this year? I am projecting about 750 million, which would be about 44% of all new phones sold. The migration is continuing and the global smartphone installed base will pass the 1 billion level by the second quarter of 2012. We will end the year with something between 1.1 Billion and 1.2 Billion smartphones in use worldwide, which starts to approach the installed base of all personal computers of any kind including desktops, laptops, netbooks and tablet PCs like the iPad.

While everyone obsesses about the iPhone and Android (and Windows haha) the global installed base of smartphones by operating system is still dominated by Symbian. Not for long, because of Nokia's suicidally stupid move to end Symbian last year, while it towered over all rivals - and was growing new sales strongly - but yes, even now, more than one year after the infamous Burning Platforms memo that destroyed Symbian's (and Nokia's) future, this is the picture of the installed base:

Installed Base of Smartphones by Operating System 2011
1 - Nokia Symbian . . . . . 33%
2 - Google Android . . . . . 31%
3 - Apple iPhone  . . . . . . 16%
4 - RIM Blackberry . . . . . 12%
5 - Samsung bada  . . . . . . 3%
6 - MS Windows Mobile . . 2%
7 - MS Windows Phone  . . 1%
Others . . . . . . . . . . . . . . . 3%
TOTAL IN USE . . . . . . 910 Million

 

Source TomiAhonen Almanac 2012
This data may be freely quoted

 

If you want to see the actual market shares of new sales for the various smartphone handset maker brands and the operating systems for full-year 2011 or the latest quarterly sales numbers, please see this, my comprehensive blog article about smartphone market shares. And if you are interested in national smartphone penetration rates, I have that too. The top 3 for most smartphones per capita are Singapore, Hong Kong and Sweden. The chart for 42 country penetration rates in 2011 is here. Much more data about smartphones including regional data, market shares, handset features, age distribution etc in TomiAhonen Almanac 2012.

 

Last year 2011 was the first time that more smartphones were sold than all types of personal computers added together including desktops, laptops, netbooks and tablet PCs like the iPad. I have also been calculating the global 'computer manufacturer' market shares annually, when smartphone shipments are included in the overall numbers. The chart for last year for the biggest PC makers with smartphones included is here. And for those who need all the nitty-gritty about mobile phone handsets, feature sets, market shares, regional penetration rates, and market sizes for the major countries, the obvious total data source is the Tomi Ahonen Phone Book 2010.

 

WHAT DO WE DO ON MOBILE?

So what do we do on our mobile phones? The obvious answer used to be 'we make voice calls' and some smartphone users might say 'download apps' or perhaps that we 'surf on the web'. That is all fine and good, but the truth of the matter is that last year marked a major milestone in the 'mobile' industry, where the primary use of the mobile handset is no longer voice calls - and no, its not apps nor is it web surfing either. The primary use worldwide - and the one with most users today - is SMS text messaging. Yes, last year, only 18 years after SMS text messaging was first offered as a commercial service for consumers, our favorite messaging method has passed voice calls in total users. SMS text messaging is used by 85% of mobile phone users - 5.0 Billion people - vs voice calls that are only used by 83% of mobile phone users (4.9 Billion people). Apps and mobile web come far lower on our list of preferences. And its good to see that even the USA is finally embracing SMS wholeheartedly. Pew reported in 2011 that the active user level of SMS text messaging had reached 88% of US cellphone owners. That compares to 90% in Pakistan, 91% in Brazil, 91% in China, 96% in Indonesia. Most of Europe has passed the 90% user level years ago for SMS text messaging.

So its time to end calling it a mobile 'phone' (or cellular 'phone') - because voice calls are no longer the most used service on our mobile handset devices. I am trying to learn to call the device just a 'mobile'. But lets talk about SMS text messaging a bit. First how big is 5.0 billion? Compared to total email users - SMS is three times bigger. Compared to all landline telephones? SMS is 4 times bigger. Compared to facebook? Over 5 times bigger. Active users? SMS text messaging grew users last year from 4.2 billion to 5.0 billion ie 16% growth in total paying users. In just one year! The traffic in SMS text messages grew even more - by 18% and while the carriers/operators kept giving huge bundles of 'free' SMS messages in various pricing packages, the revenues of SMS globally? Still grew 5% last year reaching 126 Billion dollars worldwide! The SMS industry earns a fresh new million dollars every four minutes of every day, day and night, 7 days a week, 52 weeks a year. SMS alone is bigger than Hollywood movies and the global music industry and videogaming - all added together. Or to put it another way, SMS text messaging alone is bigger than the revenues of the global radio broadcast industry. Not bad for an 18 year old haha.

DON'T FORGET MMS

And then we have the other monster mobile messaging success, MMS picture messaging. The versatile MMS is exceptionally well suited for various media and advertising uses, but also has a growing user base in consumers who send pictures. The usage of MMS has now passed 43% of the total mobile subscriber base and at 2.5 Billion active users, MMS now has more users than the total of people who access the internet by any method (at work, at home, at shared computers at libraries, schools and internet cafes; and via mobile internet). MMS became the second most used data service on the planet last year. And what a service. MMS user base grew by 21%, and MMS revenues grew by 15% reaching 39 Billion dollars last year! Much of the premium revenues are generated by various media and advertising uses as media brands learn that MMS answers most media issues with SMS - MMS allows longer texts than 160 characters of SMS; and MMS allows adding sounds, pictures and video clips. MMS is also an increasingly popular transport vehicle for coupons, offers, tickets, boarding passes, receipts etc

WHAT OF MOBILE DATA?

You may have heard some say that soon there will be more users of the internet on moble phones than on the PC. Those 'experts' are severely misguided. We passed that milestone two years ago as reported widely from IBM to Nokia. Now we have the latest count of browser based service use on mobile handsets for 2011. Today the number of mobile internet users (including WAP) is 30% of all mobile subscribers - and thus 1.8 Billion total people worldwide - browse internet content on their mobile devices at least part of the time (in the Industrialized World most of us will also have access to a traditional PC). Still out of all 2.2 Billion internet users worldwide today, less than 400 million use a PC exclusively. Over 1 Billion use both a mobile device and a PC to access the internet - and in 2011, 800 million use a mobile handset exclusively as the internet access device. In six of the world's ten largest internet user countries the mobile use is bigger than traditional PC based use (China, Japan, UK, India, Russia and South Korea).

And what of news? An astonishing milestone also has now passed. The global user base of news and alert services on mobile is 1.9 Billion. Why is that a relevant number? Yes, its four times more than the total circulation of all daily newspapers worldwide - so even accounting for three readers per newspaper, mobile news still now has more (paying) users than total readership (paid and free-loading) of all newspapers printed. But that is not the astonishing number. Now mobile news has passed the total number of television sets in use globally! No wonder the Associated Press Managing Editors declared in September of 2011, that mobile was the future of news.

How about advertising then? Sure. That too is exploding globally. JP Morgan told us a year ago that the total value of all mobile advertisingin 2010 globally was 11.5 Billion dollars. I now have the update to that number, for 2011 that was 14.4 Billion dollars (including advertising on various new ad platforms such as the branded smartphone apps etc). How many people receive ads on their phones? 3.4 Billion people worldwide, or 58% of all mobile phone owners. Most of that is now banner advertising, with SMS text messaging based ads second, MMS third and the rest such as search, location-based ads, adver-gaming, branded smartphone apps, etc making up the rest. For those in the marketing and advertising (and perhaps media) industries who would like to understand mobile advertising more, please see Tomi Ahonen Pearls Vol 1: Mobile Advertising.

WHAT DO WE DO ON OUR PHONES?

Here is an abbreviated chart is exceprted from the brand new TomiAhonen Almanac 2012 of the types of activities we do on our mobile phones today, as a percentage of all mobile phone subscribers:

PERCENT WHO USE MOBILE SERVICE/FUNCTION

 

SMS text messaging  . . . . . 85% . . . 5.0 B
Voice calls  . . . . . . . . . . . . 83% . . . 4.9 B
Camera . . . . . . . . . . . . . . . 71% . . . 4.2 B
Received Advertising  . . . . . 58% . . . 3.4 B
MMS picture messaging  . . 43% . . . 2.5 B
News and alerts . . . . . . . . 32% . . . 1.9 B
Browsing (incl WAP) . . . . . 30% . . . 1.8 B
Premium SMS (incl voting) . 28% . . . 1.7 B
Download apps (incl Java)  . 18% . . . 1.1 B

Source: TomiAhonen Almanac 2012
This data may be freely quoted

Note for example the active user base of cameraphone based digital cameras at 4.2 Billion (or 71% of all mobile phone users). It is four times more than the installed base of all non-phone based cameras on the planet, including digital and film based stand-alone cameras and videocameras, combined. Much more such user info in the new TomiAhonen Almanac 2012 if you need more data.

The mobile has become indispensible for us. Its more than a communication device, it now has our clock and alarm, it has our calendar and reminders. We use the camera not just to take 'traditional pictures' but also as a memory tool taking pictures of what we should remember to buy at the store and where we parked the car. We store vital information at the phone book and we store valued SMS text messages with information such as addresses and parts numbers etc, to the romantic message that so touched us that we want to keep it forever. Nokia reported a year ago that the average person looks as a phone 150 times per day. For every waking hour, that means you and I look at our phone once every 6.5 minutes. Those heavily addicted teenagers do it even more - although they are so proficient at their phones, they often don't need to look at the phone to send their messages.

SO WHERE IS THE MONEY?

Ever since my second book (M-Profits the first business book for the mobile industry) my obsession with this industry has of course always been the money. Where are the revenues, how are the profits generated. And even while many still are hyping the smartphone apps space, that is not where the money is. The mobile industry is a juggernaut. The mobile industry is the youngest Trillion-dollar sized giant industry on the planet, and reached that level only three years ago. Last year the world economy grew between 3% and 4% in size. In the same period, the mobile industry grew revenues by 10%. The mobile industry is now worth 1.3 Trillion dollars (1,300 Billion dollars).

Most of those revenues are earned by the carriers/operators whose total revenues last year passed 1.02 Trillion dollars. 651 Billion of that was in voice call revenues and 186 Billion was in various mobile messaging service revenues. 179 Billion dollars was in premium data services. Beyond the operator/carrier revenues, there was also equipment sales consisting of handsets, networks and various accessories.

MOBILE INDUSTRY REVENUES 2011

Operator Revenues  . . . 1,016 B
 - Voice Revenues  . . . .   651 B
 - Messaging Revenues .  186 B
 - - SMS revenue  . . . . .  126 B
 - - MMS revenue . . . . .     39 B
 - VAS Data Revenue . .   179 B
Handset Sales  . . . . . .   185 B
Other hardware sales  . .    95 B
TOTAL INDUSTRY  . . . 1,300 B

Source: TomiAhonen Almanac 2012
This data may be freely quoted

So yes, the very first mobile telecoms service as we know it, on a cellular network service, was launched commercially (in Japan, by NTT) in 1979. It took this industry only 29 years to breach the 1 Trillion dollar level. So we have been witness to the establishment of a world record in the fastest growth of any new industry. No wonder the world's richest person is now Carlos Slim of America Movil and high tech companies from Apple to Google say their future is in mobile.

And what are the companies that lead this industry? I also provide the listing of the biggest global corporations - when their non-mobile business is removed. So after we remove the Macintosh PCs from Apple and remove the plasma-screen TVs from Samsung and remove the fixed landline business from Vodafone, who are the biggest companies on their 'pure mobile' business. The latest top 10 list of the biggest companies purely on their mobile revenues looks like this:

BIGGEST COMPANIES WHEN ONLY COUNTING THEIR MOBILE BUSINESS
1. China Mobile, China, operator . . . . . . . $ 77 B
2. Verizon Wireless, USA, operator  . . . . $ 72 B
3. Vodafone Mobile, UK, operator . . . . . . $ 66 B
4. AT&T Wireless, USA, operator . . . . . . $ 58 B
5. Telefonica Movil, Spain, operator . . . . . $ 55 B
6. T-Mobile, Germany, operator . . . . . . . . $ 49 B
7. Orange Mobile, France, operator . . . . . $ 48 B
8. Nokia Mobile, Finland, handsets . . . . . $ 45 B
9. Apple iPhone, USA, smartphones . . . . $ 42 B
10. Samsung Mobile, S Korea, handsets . $40 B

Source: TomiAhonen Almanac 2012
This data may be freely quoted

That is the Top 10. I published the Top 25 on this blog earlier if you want to see that, and to find out more about my quirky names for some of those imaginary companies, and how they would rank in the Fortune 500 etc.

ABOUT THOSE APPS

I have been monitoring the despair of the app developers in attempting to monetize the smartphone app space. Apple is about to celebrate its 25 Billionth iPhone app download but before you cheer that big milestone, bear in mind, Apple has only paid out a total of 4 Billion dollars so far. So Apple, the most successful app store, in its four years of existence, has only generated 5.7 Billion dollars of total revenues cumulatively (of which Apple kindly keeps 30%). Those 25 Billion downloaded apps have shared 4 Billion dollars of developer revenues in total or about 20 cents per downloaded app. Its not a way to get rich, if the median app gets under 1,000 downloads (meaning, half of all apps out there get even less than that). Obviously most apps on the App Store are free apps, so yes, the numbers are somewhat better for the paid apps, but this is no goldmine. I have been cautioning audiences globally to beware of the app store opportunity, it is a treacherous one, and its not anywhere near the easiest way to make money in mobile. And while we are on those numbers, the total smartphone app revenues in 2011 were now 12 billion yes, but those were not all 'app store' type of consumer apps.

Like in years past, the majority of the smartphone app revenues were still generated by enterprise/business apps, such as those for the Blackberry enterprise users, sold often with licenses counted in the thousands or more. Consumer apps associated with 'app stores' only were worth 5 Billion dollars last year, 2011, and enterprise apps were worth 7 Billion dollars, giving us the grand total of 12 Billion dollars last year for all types of smartphone apps. 12 Billion may seem big perhaps. But before you get excited about that number - all apps revenues formed only 4% of the total mobile data revenues opportunity last year. Yes, you are far better off going where the big opportunities lie such as in gaming, news, social networking, music, television related services (like TV voting) etc. That is why Coca Cola has a rule of 70:20:10 about their mobile strategy - they put 70% of their mobile dollars to SMS and MMS mobile messaging; they invest only 20% to the mobile internet; and only 10% in mobile apps. Or the simple way to say it, is like US food giant Kraft, whose mobile strategy is 'no mobile left behind.' They too start with SMS and MMS, then do mobile web (and WAP) and only after no mobile has been left behind, do they bother with the apps side of smartphones. Similar thinking is with Finnair the airline that invented the mobile check-in and a similar mobile philosophy is for example used by the German railway system.

Incidentially where is the strongest growth in profits and revenues, if not in apps? Its in mobile social networking (think Facebook and Farmville but on mobile). And conveniently, if you so desire, I have a book for you on that, with 50 case studies of excellence in user-generated content, citizen journalism, virtual worlds, dating, flirting, picture sharing, multiplayer gaming, social networking etc. The ebook is called called Tomi Ahonen Pearls Vol 2: Mobile Social Networking.

WHO IS THE LEADER? JAPAN OF COURSE

 

This is a difficult complex industry - far more complex than rocket science actually - and very difficult to fully comprehend. But the industry was launched in Japan, and for most of the commercially viable innovations of this young industry, Japan and Finland have taken turns in the leadership, with South Korea, Sweden and Norway often also playing major parts. But recently some innovation has come from the USA, especially relating to those smartphone apps (even though, some of the most successful - like Angry Birds by Rovio comes from Finland - or the most futuristic and innovative - like Layar the Augmented Reality Browser comes from the Netherlands). So it becomes difficult to know where to go to see the future in mobile. Where is the leadership? I have done the math for you. I use a formula which combines the four most used measures of mobile industry leadership (mobile subscription penetration rate, the generation(s) of the networks in use, the adoption of mobile data services, and the level of how advanced the handset installed base is, ie smartphone penetration rate). The world's leading mobile country once again was Japan for 2011, here is the Top 10 list as I calculated it:

1 - Japan
2 - South Korea
3 - Singapore
4 - Italy
5 - Finland
6 (tie) - Sweden
6 (tie) - Taiwan
8 - Austria
9 - Hong Kong
10 - Australia

Source: TomiAhonen Almanac 2012
This data may be freely quoted

If you were looking for the USA, it didn't make the top 10 but is ranked 17th (up from 19th in 2010). You can see the Top 20 list here, and the Top 30 list with far more information is of course in the TomiAhonen Almanac 2012.

IT ONLY GETS BETTER

But its not ending there. The world's largest lock-maker, Assa-Abloy is deploying locks for hotels and homes that can be operated by mobile phone. Google, Nokia, Vodafone and many more mobile giants are in a race to deploy mobile money solutions around NFC Near Field Communciations, a new technology coming to our phones - 19% of Japanese already make such payments.. daily. You may have heard of the border-crossing incident on the US-Canadian border where a stranded visitor had lost his passport, but had a scan of it on his iPad and was allowed to pass over the border. I have been saying for some time now, that in the future our passports will be on our phones. But today, I advise all friends and collagues to make scans of our passports and driver's licenses and save them on our phones, just in case you are in a similar situation. While such a scanned image is not necessarily legally valid, it is far better than nothing - and if you have a good cameraphone (5 megapixel or better) all you need is good sunlight, take a picture of your passport and driver's licence and save them onto your phone(s).

Meanwhile the innovation in mobile is relentless. Turkey became the second country after Spain, to accept SMS based signatures as legally binding in contracts last year. Estonia became the second country after Norway to accept SMS based tax returns! And after Sweden launched it, there is now a race for which country is the first to stop the manufacturing of coins and banknotes altogether - replaced by mobile money. Kenya has passed the point where 30% of its GDP is now going through mobile phone money accounts. The 'usual suspects' are in the race of course including Finland, Norway and Estonia; including Japan and South Korea; including the Philippines and South Africa; as well as some less obvious countries like the Netherlands and Somaliland. But the first country to give a target date for when they expect to eliminate cash is Turkey - and they said in November of 2011, that their target year is 2025. That is only 13 years from now!

If we go back 13 years to 1998, that was the year of the movie Titanic and when Bill Clinton had his Monica Lewinski scandal. Google was launched that year. Tony Blair was Britain's Prime Minister. And now only a similar amount of time into the future, we may see the first country to end the manufacturing of cash (and this being a race, it may actually happen a little bit earlier in some other ambitious country). Wow. After several thousand years, we will be the generation to see the end of cash as a monetary instrument, in our lifetimes. Killed by mobile. And yes, if you needed to read a quick book about mobile money and payments, check out my Pearls Vol 3: Mobile Money.

My dear friend and fellow mobile statistician and forecaster, the author Chetan Sharma says the world will change more in the next 10 years, than it has in the previous 100 years. The driving force in that change is mobile, as mobile is a robust, economically sound industry, not clinging desperately to some advertising-based revenues alone. This is the best economic opportunity of our lifetimes. And not just in strict monetery terms, obviously also if your passion is in education, please substitute 'learning' for profits; or if you are in m-health, consider healthcare benefits rather than revenues. And so forth. But this is the richest and most rewarding opportunity and the epicenter of creativity. No wonder Google's Chairman Eric Scmidt says 'Put your best people on mobile'.

UPDATE 29 FEB - I have announced the release of the TomiAhonen Almanac 2012. With that publication I added some exclusive data from the Almanac with four charts (out of 96) published in total and some other excerpted sample data from the Almanac. You may find the data useful especially if you are interested in the mobile internet, gaming, music, handset installed base, or the 'Digital Divide'. See more here TomiAhonen Almanac 2012 Released.

WHERE NEXT?

This article is using data from the brand new edition of my annual statistical volume for this industry, published in ebook format, called the TomiAhonen Almanac 2012. You may freely quote any of the data in this article, please mention the TomiAhonen Almanac 2012 as your source. And if you are interested, the Almanac has over 90 tables and charts, is a 184 page ebook. conveniently formated for the small screens of smartphones so you can carry all the stats in your pocket with you and only costs 9.99 Euros for immediate download. Please see more including sample pages at this link TomiAhonen Almanac 2012.

If you need more information about the handset side of the industry, my Tomi Ahonen PhoneBook 2010 is still very current with all the data about cameraphone resolutions, screen sizes, smartphone operating system market shares etc. Similarly formated and priced 9.99 Euros, also at over 90 tables and charts in an 180 page ebook, the sister volume to the Almanac, focusing only on the handsets side of our industry is the Tomi Ahonen PhoneBook 2010.

Thinking Like a Social Media Slut - Should we publish Twitter handle on Business Card?

We are having an interesting debate and discussion on Twitter about the use of the Twitter handle or nickname - like for me my Twitter nickname is @tomiahonen (no surprise) - on the business card. If you want to follow - and join - the debate, the hashtag is #twbizcard - add your thoughts.

But to summarize so far. I thought it was pretty obvious and included my TW handle already a few years ago. I thought it was 'a no brainer' ie obviously beneficial. Then on TW we started that debate and clearly there are very good reasons why not. First, that business cards are provided by employers (businesses) and the Twitter name may be personal. Some companies may not want that, and the individual - who may not remain with that employer forever - may not want to give the Twitter name to the (former) employer. I never thought of that, as I am my own boss haha..  And then there is the personal vs business use of Twitter. Again, for me its no issue, of course I use TW just like this blog to promote myself and my business. But many use TW for personal stuff and it may not be obvious to include the TW name on a business card.

Separately we have the discussion about the pending death of business cards. Many have stopped printing them and only use electronic cards. For that, I just say that for now, here in Asia, if you do not have an actual business card, you are not 'very modern' - you are 'insignificant' haha. Here the culture demands that if you are important enough to come to a meeting, you must have 'name cards' - the more impressive the better (and there is a whole etiquette on how to present and receive business cards). 

So just to let blog followers know, if you hop in on Twitter to the hashtag #twbizcard - you can read the debate so far and please add your thoughts. Should we all be printing our Twitter nicknames to our business cards (and I add when talking of business cards, if you are a true mobilista - make sure your next business card has a QR code if it doesn't have one already.)  

No Straight Lines: an open access participatory book

An invitation to come and read No Straight Lines: making sense of our non-linear world as an open access participatory book.

It looks at how we can build better more sustainable societies, organisations and vibrant economies through innovative practice.

It argues we need to design and create for the needs of humanity not industrial systems. You can read the entire book (open access) by clicking on READ THE BROWSER BOOK link on the No Straight Lines webpage

There is an entire chapter devoted to mobile.

I explore mobile from the perspective of what it can do at an organisational and at a societal level.

From the Achuar tribe in the Amazon rainforest using mobile and GPS enable digital technologies to challenge the Peruvian government and the mining companies trying to exploit their habitat and way of life to children using iPhones at school for learning in new exploratory ways - I make the point that mobile plays an important role in the evolution of every aspect of our society.

So NSL looks at education from Africa and India to the western world, it looks at how bricks and mortor organisations can become platforms and become part of a global economy, we look at how people living on $2 a day could be doubling their daily income by working on their mobile phones – we look at the politcal consequences of rapidly shared knowledge and information, we look at data and the impact on how commerce per se will evolve enabled by mobile. And we celebrate organisations like Ushahidi that are showing us the way in how innovation really works. In Japan we look at ground breaking business models that are already nearly 10 years old and we wonder why the fashion industry is not fully up to speed, nor indeed the media industries either.

I also argue that if organisations are not able to really design with mobile they could be missing a significant opportunity.

Here is a sample of the introduction.

Gutenberg is a moblogger: economic, organisational and societal transformation through mobile communications

There is another aspect of our non-linear world which plays an important role in what comes next. We are inevitably moving towards a society where our mobile devices become the remote control for our daily lives. Any technology that allows us to better connect, communicate, share knowledge and information and get stuff done will be widely adopted.[1] Some of the stories already presented suggest the changes to people’s lives big and small that mobile communications will usher in.

We are but at the beginning of our journey of transformation which will take some time, generations even, to play out. Vint Cerf, one of the founders of the world wide web, has a view that much has already been achieved to create a better world: ‘It has provided access to information on a scale never before imaginable, lowered the barriers to creative expression, challenged old business models and enabled new ones.’ He continues: ‘It has succeeded because we designed it to be both flexible and open. These features have allowed it to accommodate innovation without massive changes to its infrastructure.’[1]

 

Gutenberg is a moblogger

When discussing or teaching disruption, I ask the question whether the church ever saw Gutenberg coming. The church was a powerful monopoly controlling all before it did so by ensuring that knowledge, the protein for innovation and creativity, was safely kept out of the hands of feudal man and woman. Power was knowledge, and knowledge could only ever be accessed by joining the church. Gutenberg, busy in his garret in Mainz, had no idea what he was unleashing upon the world, yet were Gutenberg to be alive today, he would be creating technology so that he could be taking pictures and shooting videos with his mobile; he would be blogging and vlogging via his mobile, paying for his car parking spaces via his mobile, getting his library books renewed via SMS, dating on Flirtomatic and getting his healthcare from the 3G Doctor. When technology becomes successful, it becomes ubiquitously invisible and so our mobile devices become our personalised remote controls for life.

The numbers of mobile devices in the world, currently some 5 billion, with 80% of the world’s population living within range of a mobile network, including the Masai and the Bedouin, is extraordinary. Never in the history of the human race have so many people been able to connect to each other – the scale is simply unprecedented. In developing economies, people are finding innovative ways to use mobile technology. Grameen's microfinance and village phone programmes in Bangladesh and elsewhere are known and respected around the world, but there are many less famous examples. During the Kenyan elections, Mobile Planet provided its subscribers with up-to-the-minute results by text message. And in his Presidential election campaign, Barack Obama did not miss the opportunity to mobilise his supporter network through mobile connectivity. Writing in the Observer, Cerf states: ‘As the cost of mobile technologies fall, the opportunities for such innovation will continue to grow. We're nearing the tipping point for mobile computing to deliver timely, geographically and socially relevant information.’ He goes on to comment on how researchers in Japan have proposed using data from vehicles' windscreen wipers and embedded GPS receivers to track the movement of weather systems through towns and cities with a precision never before possible. ‘It may seem academic’, he adds, ‘but understanding the way severe weather, such as a typhoon, moves through a city could save lives. Further exploration can shed light on demographic, intellectual and epidemiological phenomena, to name just a few areas.’

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[1] Vint Cerf, ‘If you thought the internet was cool, wait until it goes space age’, Observer, Sunday, 17 August 2008.

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[1] McGuire’s Law: the utility of any activity increases with its mobility. http://mcguireslaw.com/.

Mo Mobile mAdness - Ecosystem-Elop Sells Nokia Mobile Ad Unit (??? - True!)

This makes NO sense. Nokia CEO Stephen Elop himself has said that the war in mobile today is one of ecosystems, not of mere handsets or their software. Elop himself has explicitly mentioned advertising as one of the key components of a mobile ecosystem. If Elop practised what he preached, he would not be selling his mobile advertising unit, he would be nurturing it, growing it - not selling it.

Google believes so strongly in mobile advertising, they bought Admob. Apple's Steve Jobs believed so strongly in mobile advertising, he launched iAd. The company that invented the cellular telecoms industry - and launched the world's first mobile internet service, NTT DoCoMo of Japan believes so strongly in mobile advertising, they created D2C the world's biggest pure mobile ad agency. Even Stephen Elop's past employer Microsoft believes so strongly in mobile advertising, they bought ScreenTonic, and today have mobile advertising a central aspect of the Windows Phone ecosystem. And what does Elop do at Nokia? He just sold Nokia's mobile advertising unit on Friday to a company previously known as Matchbin and now renamed Radiate Media.

CENTRAL TO ECOSYSTEM

I don't want to make this blog a monologue about Nokia. But if Elop does something this mad, at this time, then I do have to observe it. As it is Stephen Elop who has been lecturing the world about how the race in mobile phones is no longer one of hardware or software, it is about ecosystems. And Elop himself defined ecosystems as they relate to mobile handsets in general and Nokia explicitly, as: "Ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things."

Advertising! One of the key components of a mobile ecosystem. And Elop has tried to rally his Nokia employees to engage in a battle of ecosystems. He warned that Nokia's competitors "are taking our market share with an entire ecosystem." He claimed last year in his notorious Burning Platforms memo that Nokia had fallen behind on this ecosystems war. He said that Nokia had "lacked accountability and leadership" and that Nokia "had not delivered innovation fast enough".

OBVIOUS MAJOR GLOBAL TREND

Apple decided to launch iOS in the summer of 2009, at a time when the total global shipments of all iOS based devices, iPhones, iPads and iPod Touch'es had not passed 50 million cumulatively (including devices no longer in use). Yet Apple felt mobile advertising was that important to the Apple iPhone and iOS ecosystem. Steve Jobs himself explained why the ecosystem would be stronger with an ad platform explaining that "developers have to find a way to make some money" and that the iAd platform was a way Apple could help its developers in its ecosystem.

Google decided to buy Admob in December of 2009. At that time, there were far less than 10 million Android smartphones in use worldwide. By 2011, Google's Chairman Eric Schmidt was saying that mobile advertising was delivering 2.5 Billion dollars of ad revenues to the company.

I mentioned that NTT DoCoMo created D2C together with the Japanese advertising giant Dentsu. Microsoft got into mobile advertising years ago with the purchase of ScreenTonic. Major mobile industry players from carriers/operators like Vodafone and Telefonica to equipment makers like Ericsson and Alcatel-Lucent offer solutions in the mobile ad space.

Mobile advertising (roughly) doubled in annual revenues in the year 2008 when the world economy crashed. Mobile advertising almost doubled again in 2009 and 2010 yet again. Early numbers say mobile advertising had again roughly doubled in 2011. By 2011 the global advertising industry had embraced mobile ads from Ford saying that mobile ads will be integral to every ad campaign they run on any medium, to US food giant Kraft saying 'no mobile left behind'.

If you believe in growth opportunities coming from those sectors of the industry that expanding most strongly, mobile advertising is that right now. Certainly Google, Apple, Microsoft, NTT DoCoMo, Vodafone etc see this and invest heavily in it. Is there any doubt, that mobile advertising is a key component in any ecosystem in mobile? None whatsoever.

WHEN DID NOKIA GO mAD

I happen to know the mobile advertising side of the mobile content and media industry quite well, as I was the first person to discuss commercially launched mobile ads at any international conference (in Austria) literally within weeks after they had launched (in Finland in year 2000). And I was honored to chair the world's first mobile advertising conference in London the next year. That conference had many pioneers of mobile ad space, presenting, as were some big advertising companies who had launched their mobile advertising units. But there was only one handset manufacturer presenting at the two-day conference on mobile advertising. That handset manufacturer was ...Nokia.

Nokia was studying the mobile advertising opportunity more than a decade ago, so much, that they had an internal unit looking at it (modest in size at the time) and Nokia had commissioned a global study about mobile advertising in 2001, long before most thought that ads served to our pockets were even commercially plausible.

Nokia monitored the space, and as mobile advertising slowly achieved acceptance beyond some of the most advanced markets like Japan and South Korea (and Scandinavia) Nokia then got serious about mobile advertising when it bought Enpocket. When was that? In 2007 ! Two years before Apple and Google got serious about mobile advertising. And since then Nokia had developed the mobile advertising arm at its Navteq unit, and bought other mobile advertising companies such as Acuity Mobile in 2009.

 

So is it factually NOT true (once again the Elop delusions) in this empirical case about fighting in ecosystems rather than handsets, that Nokia supposedly "fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind."

In reality, as it relates to mobile advertising (just like in mobile payments, location and mapping, app stores, videogames, music etc) Nokia caught the big trend, were indeed making the right decisions, and with the benefit of incredibly accurate foresight, once again, found itself years ahead. The truth is 100% diametrically opposite of what Elop has been saying (once again). Nokia was not years behind, Nokia was literally years ahead of all its rivals in this space.

BATTLE OF ECOSYSTEMS

Elop preaches about the battle of ecosystems. The Nokia Symbian platform, one of several Nokia technical platforms, and the one most suited for mobile advertising today, is not just the world's biggest smartphone operating system by installed base - and advertisers will equate installed base with 'audience' rather than new sales, where last year Elop's mis-management of Nokia smarpthones saw Symbian sales fall behind Google's Android and Apple's iPhone iOS. But lets just examine that potential advertising target audience a bit more. Here are the world's twenty largest countries by population, and the biggest smartphone OS as of November as measured by statcounter:

COUNTRY . . . POPULATION . . . BIGGEST SMARTPHONE OS

China . . . . . . . . 1.3 B . . . . . . . . . . . Symbian
India  . . . . . . . . 1.2 B . . . . . . . . . . . Symbian
USA . . . . . . . . . . 310 M . . . . . . . . . iOS
Indonesia . . . . . . 220 M . . . . . . . . . Symbian
Brazil . . . . . . . . . 190 M . . . . . . . . . Symbian

Pakistan  . . . . . . . 170 M . . . . . . . . . Symbian
Bangladesh . . . . . 160 M . . . . . . . . . Symbian
Nigeria . . . . . . . . 150 M . . . . . . . . . Symbian
Russia . . . . . . . . . 145 M . . . . . . . . . Symbian
Japan . . . . . . . . . 120 M . . . . . . . . . Android

 

Mexico . . . . . . . . 110 M . . . . . . . . . Symbian
Vietnam  . . . . . . .  90 M . . . . . . . . . Symbian
Philippines . . . . .   90 M . . . . . . . . . Symbian
Germany  . . . . . .   80 M . . . . . . . . . iOS
Ethiopia . . . . . . .   80 M . . . . . . . . . Symbian

Egypt . . . . . . . . .   75 M . . . . . . . . . Symbian
Turkey . . . . . . . .   70 M . . . . . . . . . Symbian
Iran  . . . . . . . . . .   70 M . . . . . . . . . Symbian
Thailand . . . . . . .  65 M . . . . . . . . . Symbian
Congo . . . . . . . . .  65 M . . . . . . . . . Symbian

(above adapted from statcounter data from November 29, 2011, as reported by browserrank.com)

 

Yes! Nokia's 'obsolete' Symbian is the biggest smartphone operating system in 17 out of the 20 largest countries on the planet by population. And its not just that Nokia has this incredible reach. Consider the other competing advertising mass media.

In the USA, the television market is the biggest advertising market and the biggest mass medium. In some of the more affluent markets on the above list, most households do have TV sets like in China and Russia. In all but one of the above countries, more people access internet content on mobile phones than on PCs (the exception being the USA where the half-point will be passed this year 2012). And in many of the less affluent countries on that list, even radio does not reach as widely as mobile phones. Like they say in Africa, mobile is not the 7th mass medium, its not the first mass medium; it is the only mass medium.

Nokia owns the smartphone OS platform that reaches the widest audience in 17 out of the 20 biggest countries on the planet. Where iOS and Admob and others face strong competition in advertising from legacy mass media like TV, newspapers, radio etc; and obviously internet advertising - Nokia's Symbian platform is the dominant smartphone platform in all countries where legacy media is not established as a true 'mass' medium reaching even half of the population and where mobile access to the internet exceeds PC based access to the internet.

Nonetheless, Apple's iPhone has an installed based (not cumulative shipments, but active users) of about 150 million smartphone users today. Remember, for any iOS media partner - including any advertising, we need to add the other iOS users, iPads and iPod Touch'es, so the total reach of the iOS currently is about 240 million. Google's Android reaches about 250 million active users today. Microsoft feels it worthwhile to continue building its mobile advertising unit even as its reach across both Windows Mobile and Windows Phone smartphones, currently, is less than 30 million. But Nokia's Symbian has currently over 275 million users worldwide. And the CEO who thinks its a war about ecosystems, and believes that advertising is a key part of ecosystems, doesn't want to keep Nokia's competitive advantage here, one that Nokia years ahead of its rivals in discovering and exploiting?

NOKIA TRUE REACH FAR WIDER

The above picture is not the full picture for a Nokia ecosystem. Nokia sells more S40 based featurephones, which use the proprietary S40 operating system (not part of Symbian) but which could be described as 'smartphone lite' - just like Symbian, S40 does allow full internet use, allows application downloads and the use of the Nokia (ex Ovi) store for content, apps and services. Nokia does not give us a breakdown of the S40 sales, but Nokia recently celebrated the 1.5 Billionth S40 cumulative shipment number. In rough terms the installed base of S40 currently is more than 700 million, so when added together, Symbian and S40 give Nokia an addressable market potential of 1 Billion mobile phone users worldwide.

(Note this does not include the ultra-cheap dumbphones that use the even simpler Nokia S30 OS, by which Nokia's total reach was last year estimated at about 1.7 Billion)

This ecosystem of Symbian and S40, plus Nokia's other current and past OS platforms like MeeGo and Maemo; plus Nokia's upcoming low-cost smartphone OS, Meltemi, are all supposed to be supported by the Qt developer tools of Nokia. So if we count Nokia branded Qt ecosystem potential reach, it is well in excess of 1 Billion pockets. And add to that the Android installed base (Qt supports Android) and potentially Blackberry (the new Blackberry OS will be compatible with Qt) - the Nokia 'first ecosystem' if built around Qt has a potential reach of more than 1.35 Billion mobile phone users (more than 5x bigger than the total iOS ecosystem or the Android ecosystem; more than 12 times bigger than the total Blackberry ecosystem and more than 100 times bigger than the Windows Phone). Yet Elop is doing everything he can to sink that Nokia-controlled first ecosystem and replace it with what Microsoft tries to call the 'third ecosystem' ie Windows Phone, which only reaches the pockets of less than 12 million people in the world, and is legitimately called at best, the 8th ecosystem.

 

ELOP DEFINITION OF LEADERSHIP

We have seen it time and again. We saw it with the Ovi store, we saw it with Nokia developer relationships, we saw it with mobile commerce and NFC (the Lumia series does not support NFC while Nokia's own MeeGo and Symbian both of course do support NFC). And now once again we see it with mobile advertising. Elop discovers a significant Nokia advantage in its ecosystem. Even as it is an element of genuine leadership, that is supported by essentially the whole industry as an obvious trend, Elop goes against the trend. He damages the Nokia version (or in this case sells it). This destroys a Nokia native advantage 'in a war of ecosystems' and instead brings Nokia ever more to the full control of Microsoft, as its slave.

Before this action, Nokia could control how advertising might appear on Nokia branded smartphones. Nokia could sell advertising to its own smartphones. Now Nokia branded smartphones, when using the Microsoft Windows Phone OS, will be subject to Microsoft advertising concepts and spyware. Microsoft will also be selling the ads irrespective of Nokia's own brand. Its quite feasible for Samsung or HTC to spam Nokia branded smartphones via the Windows Phone ad platform. Is this the sensible way to go?

ONLY BECAUSE OF ELOP

This desperation move is purely due to mismanagement and mistakes by Elop. I am not claiming all was hunky dory at Nokia prior to Elop. I have written time and again, that Nokia was struggling in 2009 to 2010, and fired its CEO Kallasvuo, replacing him with Elop. I am not in any way suggesting that all was perfect at Nokia when Elop took over. But the first five months at Nokia, when Elop was in charge, saw the Nokia smartphone unit sales grow strongly, Nokia smartphone sales revenues grow dramatically, and Nokia profits at the smartphone unit jump at a Nokia record level. Nokia overall corporate profits grew. In the first five months of Elop's stewardship, Nokia's share price had grown by 11%. I am not saying all was well, but Nokia had passed the worst part, and was on the road to better. Nokia was 'on the mend'. And Elop was hired - as then Chairman of Nokia Jorma Ollila said when introducing Stephen Elop - Elop was hired to fix Nokia problems in execution.

From February 2011 to today, Nokia has set a world record in destroying its market share. In smartphones Nokia's market share fell from 29% in Q4 of 2010, to 12% of Q4 of 2011. Nokia very literally scared away six out of every ten customers it had a year ago. For the full year 2010, Nokia was twice as big as its nearest rival. By Q4 Nokia had shrunk to nearly half the size of its strongest rival, Apple's iPhone.

This carnage has all been a self-induced wound, and it started with the Elop Effect, but Elop has added to the problems continuously ever since. Elop himself admitted the damage to Nokia market share took him by surprise and admitted later to more surprise that Nokia plunged from generating profits to generating losses. It did not surprise any real experts of the mobile industry, many of us said days after Elop announced his mad Microsoft strategy last February, that this would be the result, like I did on this blog, correctly forecasting that Nokia's market share would crash to 12% by the end of the year, and Nokia's strongly growing profits in its smartphone unit would reverse into loss-making, and the damage to all of Nokia would be so severe, that all of Nokia would generate a loss by the end of the year.

Elop had a company that had growing sales, growing revenues, growing profits, and a growing share price - and turned that to losing sales, losing revenues, generating losses and a massively crashing share price (Nokia's share price fell to less than half in the next five months). This damage is not only the world record crash of market share of any mobile phone handset maker. Its not only the biggest fall ever witnessed in any one year by a global brand leader in technology such as computers or home electronics etc. It is literally the biggest fall of a global customer base, in any one year, of any company, in any industry - ever.

And Elop did not see it coming, and did not manage his company wisely. That is all water under the bridge. Yes it was the biggest management failure in the economic history of humankind, that we witnessed last year. Because of it, Nokia now is in deep trouble and has to try to sell assets just to remain alive. Elop has been trying to sell the NokiaSiemens Networking unit and is currently trying to sell the Vertu luxury phones unit. He has sold various Nokia assets from several sets of Nokia's prime patents, to a whole handset factory in Romania. And now he sold Nokia's advertising arm.

I can understand that the CEO of a company that is massively generating losses (no matter what the cause) is now resorting to desperate moves such as firing tens of thousands of employees and selling assets.

RATHER THAN SELL AD UNIT, WHY NOT ALLOW SALES OF N9

What I cannot understand, is if Nokia is in the business of selling mobile phones, and its most profitable smartphones are currently on the undersirable Lumia brand (where sales representatives at stores find that in 11 cases out of 12, a customer who buys a Nokia branded smarthpone refuses to take a Lumia) and the highly desirable MeeGo platform (where sales representatives find that one in four customers who buys a Nokia smartphone, will buy an N9 which uses the MeeGo operating system) - why is Elop not willing to sell the N9 (and its sister phone the N950) in every market!

Elop would rather sell Nokia assets, such as Nokia's patent portfolio, its factories, its staff, and now, its mobile advertising unit - than allow the MeeGo based N9 (and its sister, the N950) to be sold worldwide!

Elop's priorities are wrong. He looks at global trends where the whole industry is in agreement - like now with mobile advertising. And he goes against it. He finds a genuine Nokia asset where Nokia was years ahead of the rivals - like now with mobile advertising - and rather than fix that unit's execution to deliver massive profits for Nokia, he prefers to sell it. Google just told us last year that Google makes 2.5 Billion dollars of advertising revenues out of its mobile advertising arm. Why doesn't Elop fix this at Nokia, Nokia has a far wider reach in countries where mobile advertising is often the only mass market advertising medium.

The decision to sell the mobile advertising unit at Nokia may have been necessary because Nokia is so badly generating a loss. That loss is solely due to Elop's mismanagement of Nokia last year. Before February, Nokia's profits were growing strongly. And Elop himself admitted he miscalculated how badly Nokia smartphone sales would collapse, and he also admitted surprise to the sudden massive losses that obviously resulted. The reason Nokia is now conducting a fire sale of its best assets is only due to incompetent management by its CEO, causing self-induced damage to Nokia, its products, its carrier relations, its customers and its brand.

Nonetheless, to sell a mobile advertising unit for a major handset maker goes totally against the grain, where rivals are investing more in advertising, not less. And this is how Nokia's CEO actions speak the opposite of his words. This selling of a key Nokia ecosystem component is how Nokia's CEO communicates to his staff how his new management stops the competition from "taking our market share with an entire ecosystem." This selling of the mobile advertising unit is how Nokia's new CEO indicates "accountability and leadership". This sale of Nokia's pioneering mobile ad unit is how the CEO rewards those parts of Nokia that did indeed "deliver innovation fast enough". 

The decision to sell the mobile advertising unit at Nokia was certainly not to the best interests of Nokia and Nokia's ecosystem. But the decision to sell away Nokia's own mobile advertising arm, and turn Nokia hostage to Microsoft's advertising, is in the best interests of Microsoft.

Nokia CEO Stephen Elop is once again acting in the best interests of Microsoft, and against the best interests of Nokia. He is in breach of stock market regulations and clearly has acted with a confict of interest. His actions must be investigated as a breach of his fiduciary duty to Nokia shareholders. He must be fired for cause and any Nokia Board Members who do not support an immediate investigation of Elop should be themselves investigated for collusion, neglect or incompetence.