Smartphones Account for 55 Percent of Mobile Phones Sold in Q3-2013 : Ericsson

smartphone

smartphoneAccording to a recent report by Ericsson, Smartphone uptake continued its strong momentum and accounted for around 55 per cent of all mobile phones sold in July-September period compared to around 40 per cent for the full year in 2012. The report said mobile subscriptions across the world are expected to reach 9.3 billion by 2019, and more than 60 per cent of these – 5.6 billion – will be for smartphones.

As per the report, total mobile subscriptions up to and including Q3 2013 are at around 6.6 billion, including 113 million new subscriptions added during the third quarter. India saw the second highest number of new mobile subscriptions in Q3 2013, following China.

According to the report, there was a net addition of 10 million mobile subscriptions in India, taking the total number of Indian mobile subscriptions to 742 million. The report forecasts that the total smartphone subscriptions will reach 1.9 billion at the end of 2013 and are expected to grow to 5.6 billion in 2019.

An increase in Asia Pacific and Middle East and Africa subscriptions is one of the key factors leading to an increase in smartphone subscriptions.

Commenting on the insights, Ericsson Senior Vice President and Head of Strategy Douglas Gilstrap said:”The rapid pace of smartphone uptake has been phenomenal and is set to continue. It took more than five years to reach the first billion smartphone subscriptions, but it will take less than two to hit the 2 billion mark. Between now and 2019, smartphone subscriptions will triple. Interestingly, this trend will be driven by uptake in India and other emerging markets as lower-priced smartphone models become available.”

The report also revealed that due to availability of smartphones in lower price ranges, in 2016 there will be more smartphone subscriptions globally than those for basic phones.

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Global Mobile Augmented Reality Users to Approach 200 Million by 2018 – Juniper Research

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juniperAccording to a recent report by Juniper Research, the mobile Augmented Reality (AR) market, is set to increase dramatically from 60 million unique users this year to nearly 200 million in 2018. The market will expand from the early adopting gaming segment and navigation based utility to becoming an integral part of the consumer’s ecosystem.

The report reveals that despite initial trepidation and single use applications of the technology, Juniper forecasts AR to become a key future platform for communication and commerce. AR has a potential to engage a new generation of consumers in a unique manner, combining the personal nature of mobile devices with the Internet’s wealth of accessible information.

The report found that as the AR market matures the utilisation of AR apps will evolve to suit the device, with the tablet becoming a natural environment for multimedia and second screen apps and the smartphone becoming a platform for navigation AR apps to thrive on. It notes that the forthcoming smart glasses will once again evolve this dynamic, as users will increasingly benefit from multiple AR capable devices each with unique app ecosystems.

The report also notes that the mobile AR market will continue to be dominated by three key regions, North America, Western Europe and the Far East & China. These regions benefit by being some of the most developed and mature smartphone and tablet markets in the world – the key platform for AR developers. These regions will also be the first to adopt smart glasses, the next big development for AR.

The report also found that in app advertisers will see a high value / low volume market evolve over the forecast period. As per the report Japan will be most valuable market per user download, with the US third by 2018

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Worldwide Smartphone Shipments Reach a Record 250m in Q3 2013

smartphone

smartphoneAccording to a recent report by Juniper Research, the number of smartphone shipments exceeded a quarterly record of 250 million in Q3 2013, representing a y-o-y growth of almost 49% from Q3 2012, and q-o-q growth of 10%. The report found that ndset maker Samsung now accounts for a third of all smartphones shipped with an estimated 85 million smartphones. Driven by  an increase of smartphone sales in both Premium and Economy segments, Samsung reported a 26% growth in profit.

As per the report, the iPhone accounted for 1 in 7 smartphone shipments during Q3 2013, representing a quarterly growth of 8% from Q2 2013. According to Juniper, Apple and Samsung will continue to dominate the global market, shipping 17% more smartphones in 2018 than were shipped globally by all vendors in 2012.

Nokia shipped a record 8.8 million Lumia devices and nearly 6 million Asha smartphones in Q3 2013, together exceeding LG for the second time this year. LG maintained its smartphone shipment pace compared to the previous quarter, shipping another 12 million in Q3 2013, representing a 24% increase year-over-year. While BlackBerry shipped only 3.7 million units, Huawei, ZTE and LG together shipped over 37 million smartphones in Q3 2013, accounting for a combined market share of 15%.

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By 2018, Mobile Ad Spend to Reach $40 Billion – Juniper Research

mobile-ads

mobile-adsAccording to a recent report by Juniper Research, increased utilisation of analytics platforms, allied to the introduction of innovative ad formats and purchasing mechanisms, will push global mobile ad spend beyond $39 billion in 2018, up from $13 billion this year.

The report highlighted the opportunities offered by targeted in-app advertising, citing the dramatic success of Facebook in monetising its native applications over the past year. Mobile now contributes 41% to its overall advertising revenue. Facebook recently announced that it is going to begin rolling out video ads, a move illustrative of the wider industry trend for interactive rich media ads, away from underperforming mobile banner adverts.

The report found that the growth of Real-Time Bidding (RTB), a mechanism which lets advertisers buy impressions in real-time, means that publishers will be able to more easily sell their advertising inventory, which will thereby boost overall mobile ad spend.

However the report also pointed out that some brands still remain wary of the mobile channel due to concerns that mobile advertisements may be perceived as inappropriate or intrusive. Indeed, the report noted the disproportionately low spend on mobile advertising, versus other mediums, relative to the high engagement levels that frequently occur.

According to the report, the fastest growing region, in terms of mobile ad spend, will be the Indian Subcontinent with the mobile spend expected to increase four times from 2013 to 2018. The report also found that advertisers can increase conversions by simply adding mobile optimised features, for instance a ‘click to call’ button, or by linking to the correct app store.

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Opera Mobile Store Now Serves More Than 140,000 Apps To 75 Million Visitors

opera

operaRecently, Opera Mobile Store announced that it has tripled the size of the store in the last 12 months, currently offering more than 140,000 apps. The Opera Mobile Store provides more than 75 million monthly visitors, an increase of 63%, with mobile apps and games across most platforms, including Android, Java, BlackBerry, Symbian and iOS.

The number of daily visitor to the Opera Mobile Store has increased from 1 million to 2.6 million in the past year. While the United States jumped five positions to take second place in terms of Opera Mobile Store visitors since last year. India remains no. 1, while Indonesia has moved to no. 3, continuing to reflect the Opera Mobile Store’s strength and popularity in Southeast Asia.

Upcoming markets such as India, Brazil, South Africa and Indonesia continue to grow and by the end of September 2013, their cumulative download share represented 35% of the Opera Mobile Store’s global downloads. The biggest market share for mobile apps in these countries still belongs to the low-cost, J2ME-powered mobile devices, with over 49% of the total downloads. These statistics confirm that Android-powered smartphones are slower in penetrating developing countries.

However, Android is showing growth in the above-mentioned countries. Android’s market share in these four countries has grown from 11% in September 2012 to 32% in September 2013. Concurrently, the popularity of Java apps in these countries has decreased by 29%, falling from 78% to 49%.

Across all countries, total downloads of Android apps from the Opera Mobile Store grew 18.5% to 38.4% of total app downloads in a year, Java apps downloads have decreased from 67.8% to 43.9%, Symbian has gone from 10.3% to 9.9% and Windows Mobile has shifted from 1.9% to 0.4%. Gaming apps based on the recently-introduced HTML5 online-gaming platform has had 2.6% of downloads on the Opera Mobile Store.

The Facebook app, Tubemate Youtube downloader, Angry Birds App, WeChat are among the top 10 downloaded apps in the Opera Mobile Store.

Users can access the Opera Mobile Store via Opera’s flagship Opera Mini, Mobile Classic, Opera for Android mobile browsers as well as by browsing to apps.opera.com on their phones.

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42 Percent Internet Users in India Prefer To Access Internet Only In Local languages – IAMAI

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iamai logoAccording to a recent report ‘Internet in Rural India’ by IAMAI and IMRB, there will be 68 million claimed Internet users and 46 million active internet users in rural India by the end of October 2013. The report further estimates that by December 2013, there will be 72 million claimed Internet users and 49 million active Internet users in rural India. By June 2014, claimed internet users in rural India will rise to 85 million and active internet users to 56 million. The report also finds that around 61% or 25 million of Active Internet users access Internet at least once a week.

As per the report, the number of active Internet users has seen 58% growth since June 2012. The report further found that there are 21 million active mobile internet users in Rural India in June 2013 – a huge 5.3 times growth in 2013 over 2012 and nearly 47 times over 2010. It is estimated that by October 2013, there will be 25 million active mobile internet users and 27 million by December 2013.

The report also found that nearly 42% of the internet users prefer to access Internet only in Local languages. With more content becoming available in the local languages, more users will start using the internet, states the report. The findings of the report reveal that majority of the rural internet population is not comfortable in accessing Internet in English and this is holding them back from using internet fully for other purposes than online entertainment.

According to the report, only 9% of the active internet users transact online. With a very low awareness level, Online transaction is still in its infancy and there is a pressing need to educate and inform the user of the benefits of the internet services to drive the growth of internet usage.

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Shipments of consumer M2M devices will reach 13.8 million in 2017 – Berg Insight

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berg-insightAccording to a new research report from Berg Insight, shipments of consumer M2M devices with cellular connectivity reached 5.3 million worldwide in 2012. In the next five years, shipments are forecasted to grow at a compound annual growth rate (CAGR) of 21.1 percent to reach 13.8 million devices in 2017. This relatively new breed of connected devices – neither classified as handsets, PCs, tablets nor traditional M2M devices – have strong growth potential. Today, e-readers and PNDs are the most common consumer M2M devices already shipping in millions. The consumer device market is changing rapidly and dedicated devices are facing fierce competition from multipurpose devices such as smartphones and tablets. Introducing wireless connectivity is one strategy to meet this threat and new connected products such as the Galaxy camera range from Samsung as well as smaller scale success stories such as the PocketFinder from Location Based Technologies show the market potential for cellular connected consumer devices.

Emerging device categories such as personal tracking, wearable technology and digital cameras are well suited for embedded cellular connectivity and have high growth potential in the coming years. Berg Insight predicts that by 2017, smart watches will be the most sold consumer M2M device category before personal tracking devices, accounting for 23 percent and 17 percent respectively of total annual shipments. An increasing share of all content and services are delivered through the cloud and cellular connectivity gives the freedom of being connected everywhere.

“There are already over 15 million consumer M2M devices in use worldwide. Business innovation from device vendors, content service providers and telecom operators is now necessary in order to turn M2M consumer devices into a mainstream success” says Johan Svanberg, Senior Analyst at Berg Insight. The 3G connected Kindle e-reader from Amazon is the most sold consumer M2M device to date. “A seamless integrated offering without any complicated subscription models has been key to the success”, continues Mr Svanberg. Mobile data plans which let users buy a bucket of data to share across several devices as well as pay-per-use models are other promising business models for consumer M2M devices. “It is not always possible to hide the cost of data such as in the case of the Kindle, but the relationship between the benefits and costs need to be both clear and fair in order for users to be willing to pay extra for wireless data”, concludes Mr Svanberg.

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Annual Downloads From Mobile App Stores To Reach 102 billion in 2013 – Gartner

gartner

gartnerAccording to a recent report by Gartner, annual downloads from mobile app stores will reach 102 billion in 2013, up from 64 billion in 2012. Total revenue in 2013 will reach $26 billion, up from $18 billion in 2012. Free apps will account for 91 percent of total downloads in 2013. Gartner said that in-app purchases (IAPs) will account for 48 percent of app store revenue by 2017, up from 11 percent in 2012.

Commenting on the insights, Brian Blau, research director at Gartner said,”Free apps currently account for about 60 percent and 80 percent of the total available apps in Apple’s App Store and Google Play, respectively.iOS and Android app stores combined are forecast to account for 90 percent of global downloads in 2017. These app stores are still increasingly active due to richer ecosystems and large and very active developer communities. However, we expect average monthly downloads per iOS device to decline from 4.9 in 2013 to 3.9 in 2017, while average monthly downloads per Android device will decline from 6.2 in 2013 to 5.8 in 2017. This relates back to the overall trend of users using the same apps more often rather than downloading new ones.”

According to the report, IAP purchases will drive 17 percent of the store revenue in 2013 and increase to 48 percent in 2017. However, as with downloads, IAP is expected to have strong growth in 2013 and 2014 and slow in later years. This is due to smart devices reaching more mass-market consumers whose willingness and/or affordability to spend on IAPs is lower than early adopters. Nevertheless, IAP will become a major monetization method for apps stores and developers.

Research shows that IAP contributes to a significant amount of Apple’s App Store revenue from iPhones worldwide. Other platforms have not reached such high levels as the iPhone, but analysts expect they will also see IAP contributions increase in the future.

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Android Mobile App Revenues To Reach $6.8 Billion in 2013 – ABI Research

abi

abiAccording to a recent report by ABI Research, Android’s smartphone mobile app revenues are projected to reach almost $6.8 billion by the end of 2013, nearly doubling its revenues from the previous year.The report revealed  that Android smartphone app revenues will increase from 59.1% to 65.9% when compared to iOS smartphone app revenues over the next twelve months.

Commenting on the insights, ABI analyst Josh Flood said,”Apple’s iOS still leads all the other mobile operating systems’ revenues by a significant margin; however, the greater number of Android smartphones in use is clawing back Apple’s lead in this market. This year, Android smartphones will ship by a factor of more than three-to-one to iPhones.”

The report found that other key contributors to Android’s app revenues are its effective app advertising. Android’s digital advertising, which is primarily based on Google’s powerful analytics search engine and vast experience, gives the company a big edge over Apple. Google has been incredibly successful at mastering targeted online advertising. Additionally, Android’s willingness to incorporate carrier billing for its app purchases could prove to be a very decisive factor against iOS in-house payments. According to the report, App purchases through mobile carriers have recorded significantly higher successful completions when compared to paying by credit or debit cards. This is also particularly notable in emerging markets such as Latin America and Asia-Pacific, where low-cost smartphone sales are beginning to rocket.

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Rise of the Chinese Smartphone brand Xiaomi; Xiaomi's Key to International Growth: Data Usage & Carriers

Xiaomi

XiaomiXiaomi was recently in the news for stealing away Android’s VP of Product Management, Hugo Barra. Hugo Barra’s new role with Xiaomi, as VP of Xiaomi Global, will be to help guide its growth strategy in markets outside China. Let’s take a look at the key drivers of Xiaomi’s international growth prospects.

An Introduction to Xiaomi

For those readers who may be unfamiliar with Xiaomi, let me provide a brief overview of the company. The 3-year old Chinese OEM, founded by Lei Jun and Bin Lin, has quickly shot up the smartphone sales charts to overtake Apple in the country. In fact, Xiaomi’s Mi 2S was said to be the most popular smartphone in China, overtaking the Galaxy S4. In addition to this, initial stocks of Xiaomi’s $130 “Red Rice” smartphone sold out it less than 90 seconds and then racked up more than 7 million preorders.
Since Xiaomi’s business model is focused on services, it allows the company to price its products slightly higher than the BOM cost. As a result, Xiaomi’s products are priced at roughly $100-$330, far lower than competing smartphones of the same quality. Xiaomi also uses a customized Android skin with crowd-sourced updates, called MIUI, which is fairly popular among the developer community.In China, a majority of Xiaomi’s smartphone sales have come from the prepaid market. This allowed Xiaomi to use an innovative manufacturing and distribution model – Xiaomi sells 70% of its devices online, which it manufactures in batches, and usually sell-out in a matter of minutes. It has now begun to expand overseas, first to Hong Kong and Taiwan, which are primarily carrier subsidized markets. The results so far have been impressive – Xiaomi’s flagship is already the third best-selling phone on one of Taiwan’s largest carriers, after the HTC one and the Samsung Galaxy S4.

As a result of this performance, the company recently raised funds at a valuation of $10 billion, which is more than twice HTC’s current market value. In short, the company’s rapid ascent has been impressive and the investing community has great confidence in their growth prospects.

Xiaomi’s Usage & App Download Metrics

I initially thought that Xiaomi would target pre-paid markets outside China because of their natural cost-quality advantages. That was until I saw this statement from Xiaomi’s CEO, Bin Lin:

 Xiaomi’s customers are twice as active on the mobile web as those of other manufacturers.
The statement, while encouraging, is quite vague as we don’t know if this comparison holds good against Chinese smartphones or for iPhones and other Android smartphones as well. As a result, I decided to do some more research to shed some light on this situation. Xiaomi’s MIUI appstore has seen a total of 1 billion downloads in just 13 months and has become one of the top 5 appstores in China. Xiaomi also announced that the MIUI appstore has 17 million active users (out of 20 million total users) and sees 5 million downloads per day. Based on this data, I was able to derive the following chart:
 Xiaomi - App Download Rate
Xiaomi’s app download rate is almost twice of that on iOS and Google Play, which seems to be consistent with Bin Lin’s statement. This is even more staggering when we take into account the fact that Xiaomi’s application base is likely to be far smaller than the 900,000 apps available on iOS and Google Play. International variants are likely to have access to Google Play’s application base, which could boost downloads. However, since the overall user base is still small, usage metrics are likely to go down as their products begin reach a larger base of mainstream users.

Xiaomi: Competing for Carrier Attention

As I stated in my last post on carrier motivations in subsidized markets, a carrier’s primary goal is to sell smartphones that maximize ARPU and minimize churn rate while also minimizing subsidy costs. While this was a challenge in the early years of the smartphone industry, the data consumption rates across flagship devices have rapidly narrowed. In other words, flagship smartphones are rapidly becoming “good enough” for carriers who happen to be direct customers of smartphone OEMs.

Xiaomi’s doesn’t necessarily have to beat high-end flagships in terms of data usage, but to needs to reach comparable metrics. In other words, Xiaomi’s challenge boils down to being “good enough” for carriers. If they can establish this trend in subsidized markets like Taiwan & Hong Kong, it is in carriers’ interest to invest in marketing & branding their products. In addition to the data consumption rates, carrier subsidies on Xiaomi’s devices will be a fraction of what is paid to companies like Apple & Samsung. Even in a financed smartphone distribution model (like T-Mobile’s), the low acquisition cost and high quality is likely to appeal to consumers, if the carrier puts sufficient marketing muscle behind it. Carrier marketing funds are currently allocated to leading flagships because of contractual obligations and a lack of appealing options. This is likely to change going forward as bargaining power shifts back to the carriers, which would be favorable for companies like Xiaomi.

Xiaomi’s next target market is rumored to be Europe. We may soon find out just how effective this strategy will be.

This is  post  has been written by  Sameer Singh , Founder & Editor of  Tech Thoughts

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