Mobile Electronic Books

Our gift to you our readers: The TomiAhonen Cheat Sheet on all major mobile industry numbers

Tomi T Ahonen — Mon, 08 Feb 2010 15:44:46 +0000

I mentioned this at the end of the big blog reviewing the mobile industry statistics that I posted last Friday. But its a very long blog, and the 'gift' was buried deep in the back of the blog posting. So now just about the freebie gift.

I have taken the top level numbers from the brand-new TomiAhonen Almanac 2010 (about to be released), and have squeezed as many of the stats to a two-page document as I can. I tried to be comprehensive, so it covers handsets and smartphones, users, revenues, services, phone functionalities, and the Digital Divide. The Cheat Sheet has this kind of info:

So it has that kind of statistical tables on seven categories of data: Mobile Subscriptions; Mobile Industry Revenues; Digital Divide; Mobile Services Used; Mobile Data Service Revenues; Handset Market Shares; Smartphone Market Shares; Handset Capability Installed Base.

The total document is only 2 pages in length, is an unrestricted pdf file that you may freely quote from, and you may freely forward to any colleagues and friends. I only ask that the pdf file itself, or its full content not be posted online. Individual stats and charts may of course be excerpted from it. And as the Cheat Sheet is directly excerpted from the TomiAhonen Almanac 2010, I ask that anyone who references stats from the Cheat Sheet, not say that the source is 'Cheat Sheet' - that sounds a bit cheesy haha - but that the source is the "TomiAhonen Almanac 2010".

So. Would you like this free pdf file, the TomiAhonen Cheat Sheet Mobile Industry Numbers 2010? If you would like to receive it, just send me an email requesting it to tomi (at) tomiahonen (dot) com and I will send the Cheat Sheet to you by return email. And don't worry - I am not going to be selling your email address to anyone, ever, and I will not be spamming you with any kind of newsletter. If you are lucky, you may hear from me once per year, but more likely once every two years haha...

The Big Picture “All the Stats” Total View to Mobile Industry, 2010 Edition

Tomi T Ahonen — Fri, 05 Feb 2010 04:24:30 +0000

Its been our custom to give a review of the mobile industry at the start of the year, usually before the big Mobile World Congress conferece in Barcelona. I struggle to come up with 'interesting' ways to discuss the stats, but lets try once again. This is indeed a giant, complex and most dynamic industry. I am sorry, for me to be reasonably comprehensive, this blog cannot be brief. But consider it the only one place you need to come to during 2010 to find all the numbers. To paraphrase Woody Allen, All the facts you wanted to know about mobile (but were afraid to ask).

(please note that still on Friday this blog entry is missing links and has some minor typos etc, I will be finishing the blog during the day)

4.6 BILLION SUBSCRIPTIONS

The mobile industry has now 4.6 Billion active subscriptions. Note that the planet as 6.8 Billion people. And while most in the Industrialized World have TV sets, PCs and internet access - those are not normal for most people on the planet. So for contrast - on the planet there are 1.2 Billion PCs of any kind including netbooks; 1.6 Billion TV sets, 1.7 Billion Internet users (including those who access at an internet cafe, or via a mobile phone); and 3.9 Billion FM radio receivers. But 4.6 Billion mobile phone subscriptions. A mobile phone account for 68% of the planet already!

Now, not all subscriptions are actual unique users. The total number of unique users is 3.4 Billion people ie exactly now half of the planet. About 35% of those unique users have two or more subscriptions. And many but not all who have two accounts also have two phones. So the total number of actual mobile phone handsets in use is 3.9 Billion. In Eastern Europe already 81% of unique mobile phone users have more than one account. In Africa only 17% of subscribers have two or more accounts.

A few specific details - there are about 200 million people beyond the 3.4 Billion unique users who live in poor households where they share a phone, such as often in Africa for example. Out of the 3.9 Billion handsets in use, about 375 million are second-hand phones (as in many countries of the Emerging World) or hand-me-down phones (as often with younger teenagers and children). And out of the 4.6 Billion subcriptions 200 million are not actually used by humans, but are 'telematics' subscriptions connecting machines, remote metering etc. In the year of the global economic crisis, the mobile industry grew 15% more paying subscriptions. This industry is not just healthy and robust, it is positively a powerhouse.

New Service example. Let me give you one example service. In many parts of the Emerging World there are poor people living in villages where there is no traditional media at all. No TV coverage, no newspapers, no internet, no fixed landline and even no FM radio coverage. But increasingly there is mobile telecoms ie cellular telecoms reach. For example out of the Billion people of India, about 200 million live in such villages where there is no FM radio coverage even, but there is cellular mobile phone reach. What happens? These people are poor but not without any funds. And they have almost no 'media' to entertain them at evenings. But they are human, they still enjoy music and drama and sports and news. How can they get it? Through their mobile phones of course. In India there are countless mobile phone premium voice services (like in Western markets we have sex phone lines) which deliver news, sports scores, pop music. The latest Bollywood musical hits and the scores or even live game broadcasts of Cricket games etc. This type of new 'mobile radio' deliveres as much income in India as the total radio industry of India. Amazing.

Since 2008, mobile has become the most widely spread technology on the planet. The phone is also the most commonly used clock, as many abandon wristwatches; it is the most used alarm clock; there are three times as many cameraphones in use today than any kind of stand-alone camera, digital or film-based - ever manufactured. More people have an MP3 player on their phone today than own any kind of musicplayer including iPods and home CD players.

EARNS 1.1 TRILLION DOLLARS IN ANNUAL REVENUES

The mobile industry is a global giant which generated 1.07 Trillion (1,070 Billion) dollars in annual revenues last year. Compare that with 'major' industries such as print (newspapers, magazines & books) or Television or advertising or the computer industry - these are all industries roughly speaking worth only half a Trillion dollars. The fixed landline phone industry is also worth in that group. Only a few global industries earn a Trillion dollars such as automobiles, food, construction and military spending. And since 2008 also mobile telecoms.

Of the 1.07 Trillion dollars, 865 Billion dollars is service revenues and 205 Billion is hardware. The service revenues split so that 615 Billion dollars is voice call revenue; 153 Billion dollars is mobile messaging revenue; and 98 Billion dollars is non-messaging 'mobile data' revenues. Of the hardware income, 160 Billion dollars is handset sales and 45 Billion dollars is network infrastructure. Of the mobile messaging 113 B dollars is earned by SMS text messaging and 29 Billion dollars by MMS messaging. The mobile data revenues (including messaging) are now larger at 253 Billion dollars than all internet-related revenues including advertising, content revenues, and access fees (broadband and dial-up) added together.

These numbers will become numbing very fast. So a bit of context. There are 920 million people who own and operate a car on the planet, thus paying for petrol and insurance and car maintenance regularly. There are 950 million people who watch multi-channel TV like cable TV or satellite TV and a vast majority of those pay to do so. There are about 1.15 Billion people with a landline phone account. About 1.2 Billion PC owners pay for an internet access (about half now on broadband). There are about 1.7 Billion households on the planet, so in most cases but not all, those involve rents, mortgages, electricity utility bills etc. But there are 4.6 Billion paid subscriptions to mobile telecoms. You get the picture. Mobile is the giant among lilliputs.

The average mobile phone user when counted as total subscriptions on the planet pays 15.70 dollars per month for mobile telecoms services.That ranges from 47 dollars per month in North America to 7 dollars per month in countries of Developing parts of Asia. This number is somewhat misleadingly called the "ARPU" (Average Revenue Per User) but should be called "Average Revenue Per Subscription". When re-calculated and adjusted for unique users, the nominal 15.70 dollars per month becomes a real average monthly spending per "unique users" at 21.30 dollars per month on a worldwide average. The average mobile phone subscriber on the planet spends 2.95 dollars per month on mobile messaging and 1.75 dollars per month on non-messaging mobile data services. Data services overall account for 29% of all mobile phone service revenues.

Service example. The internet is struggling to discover ways to make money, they essentially only can beg for some subscription revenues or hope to build 'eyeballs' to try to monetize on advertising. The mobile services industry has invented four newer business models and thus has six, as I explain in my recent books. Consider social networks. Twitter, Facebook, YouTube, Flickr, Wikipedia, etc, how can they earn money? Apart from some advertising income they have millions of users but make pitifully little money if any. Meanwhile mobile social networks from Itsmy out of Germany, Flirtomatic out of the UK, Cyworld out of South Korea, Frenclub out of Malaysia, Mixi, Mobagetown and Gree out of Japan etc - these all make money. Tons and tons and tons of money. Now think of this. All three Japanese mobile social networks, Mixi, Mobagetown and Gree - have similar modern new business models with no or modest subscription fees, and advertising accounts for a small minor part of their total income. Yet all three are making between 200 and 400 million dollars annual in revenues and each of the three generates profits - and get this - all three are listed on the Japanese stock market! That is a business that has become 'mature' enough if it is accepted by the stock market. None of that 'new economy' nonsense of 'build enough of an audience but don't know how to monetize it' nonsense.

The mobile telecoms industry was launched in Japan by NTT in 1979 (the industry was not launched by Motorola in 1983). In only 29 years the global mobile telecoms industry breached the Trillion dollar annual sales level, becoming the fastest-growing Trillion dollar industry of all time, and doing it so rapidly, odds are this record will stand for centuries. And even in the time of the economic downturn, the mobile industry grew 7% in revenues.

SOLD 1.1B NEW HANDSETS

The industry sells over a Billion new handsets every year. Last year it sold 1.13 Billion new mobile phones. This compares with 300 million new TV sets, 270 million new PCs of any kind including netbooks, and 250 million DVD players. Videogame consoles, MP3 players, eBook readers, digital cameras etc sell in far smaller numbers. No other consumer electronics comes even close to mobile. The average replacement cycle for mobile phones, at 17 months, is also far shorter than for other digital technologies.

The 3.9 Billion phones in use have rapidly gained enormous capabilities. 100% of the installed base of mobile phones are able to receive SMS text messages. 95% of all phones have some kind of browser, whether a 'real' xTML browser of a more limited WAP browser. 93% of all phones in use have a color screen. 80% of all phones in use can receive MMS multimedia messages. 73% of all phones in use are cameraphones. 71% of all phones have a modern xTML web browser. Over half of all phones in use today have bluetooth, a media player; and can accept downloads ie have Java or Brew. 44% have a memory card slot, 29% are 3G high speed data phones or faster and 19% have WiFi. Only 13% of the installed base of mobile phones in use are smartphones worldwide.

If we look only at smartphones, then in 2009 the Nokia brand formed 39% of all new smartphones sold. RIM and its Blackberry smartphones sold 21%. Apple's iPhone achieved 15% of new smartphone sales in 2009. HTC was fourth biggest selling 5% and Fujitsu fifth biggest selling 4% of all smartphones. All other of over two dozen brands of smartphones including Samsung, SonyEricsson, LG, Google, Motorola, Palm, etc sold a combined 16%. Of the installed base of smartphones, Symbian branded smartphones (about a dozen brands but mostly Nokia) account for 56% of all smartphones in use on the planet. Blackberry smartphones are the second most common type by operating system, with 16%. Apple's iPhone OS/X forms 8% of all smartphones in use. Microsoft's Windows Mobile (used by over a dozen manufacturers but predominantly HTC brand) control 7% of all smartphones in use. All other smartphone operating systems such as Linux Mobile, Palm, Google Android, Nokia Maemo etc form the rest at 13% of all smartphones in use.

Service example. While the US focused IT and financial press obsess about 'apps stores' the mobile handset market is very dynamic and innovative and can provide great opportunities for innovation. And it does not require 'apps' sold to consumers to be able to capitalize on mobile. Take basic SMS alerts. All mobile phones on the planet can accept text messages. So we can build alerts services around those. So hospitals in Britain will send reminders when you have your doctor's appointment. Dentists in Finland will let you take cancelled appointments on a first-come-first-served basis. Surf cams in South Africa and Australia will send you surfing alerts with links to the surf cam so you can also use your phone to view the beach if you feel like surfing. Here in Hong Kong the government sent a warning to all residents when they discovered the first case of swine flu, through SMS to every phone.

Airlines all over the world send alerts if you are a registered frequent flier and your next flight is delayed, so you don't need to come to the airport and wait for hours there. I was just in Norway and met with one of the most innovative airlines, Norwegian, which was the world's first airline to do the full air passenger mobile ticketing solution - from selling your ticket on your phone, to the check-in via phone to the boarding pass on your phone screen - imagine how much this saves money for the discount airline. Norwegian the airline is so thrilled with their mobile telecoms experience that they are launching their own... mobile phone service in Norway. Like I say, this industry is a 'magical money-making machine' and it is a gateway for other industries to make money or deliver customer excellence. And while we are on those SMS alerts, think of these. In South Korea the mobile phone 'love detector' will monitor tension in the person on the voice call and send an alert to you telling you if your partner is telling the truth and if there is still romance in that person's voice... Yes, its getting that silly now. And in Japan, Agrihouse introduced a service that lets your plants send you alerts when they need to be watered. We can make millions without the silly apps stores.

Now yes, last year for the first time ever, actual mobile phone sales levels dipped with this economic downturn, by 5%. But even as the economy crashed last year, smartphone sales grew 9%

3.6 BILLION SMS TEXT MESSAGING USERS

Mobile phone messaging using SMS text messaging is the most widely used data application on the planet. There are 3 times as many active users of SMS as there are total number of personal computers on the planet. The total active user base of SMS is more than 2.5 times larger than the total unique user base of email. At 3.6 Billion active users, SMS text messaging is now used by 78% of all mobile phone subscribers - and more amazingly, SMS is used now by 53% of the total population of planet Earth. The planet sent 4.6 Trillion SMS text messages last year, which is 12.6 Billion messages per day (two SMS for every live person on the planet per day), or 8.7 million messages every minute. At 2.5 US cents per SMS cost on average globally, the SMS industry earns another million dollars every five minutes.

The second most used data application on the planet is not Google search or Facebook or email or any internet service. It is MMS multimedia messaging, often mistakenly thought of as only 'picture messaging'. MMS is a powerful media channel to deliver pictures, videos, sounds, text - and advertising - with a potential reach of 3.1 Billion people. That is a reach almost exactly twice the total reach of television. Already 1.7 Billion people - 37% of all mobile subscribers - are active users of MMS multimedia messaging, which is over three times the total daily circulations of all newspapers printed around the world. MMS is often mistakenly thought of as a 'failure' but delivers 29 Billion dollars of revenues globally - which makes it bigger than the global music industry or total Hollywood box office revenues worldwide. Hardly a 'failure'. MMS revenues grew 12% in 2009 while the global economy was in crisis.

Service example. British AQA Any Question Answered does just what it says in the title. They are a paid SMS based service that will answer any question. You have your sports argument at a pub, send the question to AQA and get your answer. Or you need to know what is the height of the second tallest mountain or whatever, they have it. But the users will of course try to stump the service asking those eternal questions like what happens if your vehicle is travelling at the speed of light and you turn on your headlights or which tastes better, bread that is cut in triangles or bread that is cut in squares etc. And more than that, when drunken young adults have a laugh at the pub, then they send in the questions like asking AQA which of the three girls sitting with the boys at the table is the sexiest. Obviously AQA won't know these girls, yet they will answer. And their answers are often very funny and entertaining. Each answer is free, each question costs one UK pound. Easy. And this model is viable you ask? Anyone could just Google for answers? Yes, this makes oodles of money because it is entertaining as well as informative. 4 Million pounds per year (7 million dollars) in revenues out of silly answers to stupid questions. If the same level happened in America, thats about 35 million dollars in income. You still think SMS is not for you?

The most used data application on the planet became the fastest-ever industry to reach 100 Billion dollars in annual revenues in only 16 years. And grew users, services and revenues in 2009, a year of economic crisis. MMS is following on the heels of SMS hitting 29 Billion dollars in only 9 years and yes, MMS also grew users, services and revenues this past year.

MORE INTERNET USERS ON MOBILE THAN ON PERSONAL COMPUTERS

The transition point has been passed and as we heard Nokia CEO say a few weeks ago, today there are more people who access browser-based services on a mobile phone than on a personal computer. Out of all 1.7 Billion internet users today, there are only 400 million who never use a mobile phone and only access on a PC. 800 million use both a PC and a mobile phone to access the internet. And 500 million people today never use a PC to access the web and only use a phone. In numerous populous Emerging World countries the majority of internet access is from mobile such as in India, South Africa, Bangladesh, Russia etc. In many very advanced Industrialized World countries of high broadband penetration the same phenomenon has happened such as in Japan, Sweden, South Korea and Taiwan where also more people access the internet on a phone than on a PC. Thus the total PC based internet user base is now 1.2 Billion people but the mobile phone based internet user number is 1.3 Billion people. Note that these numbers include any browser services including WAP (often called 'mobile internet' as distinct from the 'real internet' using xTML web browsers on mobile phones)

Service example. Take Flirtomatic from the UK. If you have a social networking site on the legacy PC based internet, like say Facebook or YouTube or MySpace that is not making profits, and you then release that same service on 'the real internet on mobile' say on a smartphone like an iPhone, on an 'all you can eat' data plan; there is no magic there, suddenly turning a free service into a money-maker. No. Trying to put the 6th mass medium ie the legacy PC internet onto a 7th mass medium mobile phone is as dumb as trying to put a 'real horse' in to a car (or to use a media example, as silly as using your TV to listen to radio). We have a FAR MORE POWERFUL engine in the car than the horse, and we have a FAR MORE POWERFUL engine in the mobile, called the 'mobile internet' (a very bad term, by the way). But mobile has 8 unique abilities that cannot be replicated on any of the legacy 6 mass media.

So Flirtomatic, another 'social networking' service out of the UK. Flirtomatic was launched as an integrated service on both the legacy PC internet and the 'mobile internet'. So in essence, Flirtomatic on mobile is a 'WAP' service. And before you complain for one second that 'everybody knows WAP is crap' - stop and consider this. Flirtomatic has four separate revenue streams not the two on the legacy PC internet. And Flirtomatic abandoned its subscription as 'unnecessary' in 2007 ! and Flirtomatic earns less than a quarter of its income from advertising. Their other three revenue streams? Personalization, virtual gifts, and 'ego services'. Already in four countries, they have passed 2 million subscribers in Britain. And most importantly, Flirtomatic is profitable. How many internet-based social networks can say that? And they did it without 'the real internet in your pocket' they did it on WAP. Take that to your bank.

MOBILE PREMIUM CONTENT AND SERVICES WORTH 98 BILLION DOLLARS

The total premium data revenues on mobile data services, after removing mobile messaging, are worth 98 Billion dollars. Only 5.9 Billion dollars of that total is advertising revenue. So paid content and services on non-messaging mobile services total 92 Billion dollars worldwide. That number is four times as much as all paid content revenues on the legacy PC based internet. Meanwhile mobile advertising revenues grew 85% in 2009, a year when the global economy 'cratered' to quote a former US presidential candidate. Many in the 'real' media industries tend to dismiss mobile content as silly frivolous fringes of the content world, like the Crazy Frog ringing tone for example (that was the first pure ringing tone to become number 1 on the British weekly pop music charts five years ago).

So first some market realities. Basic 'ploink-ploink' ringing tones may be 'minimalist' and modest in their musical range, and short in duration, but understand their economic power. The total Apple iTunes music store - the world's biggest online digital music store - earns under 2 Billion dollars of revenues in its music sales annually. Basic ringing tones - I am not talking of 'truetones' or real samples or real music, the very basic simple monophonic tunes you hear random people have on their phones when you walk on the street - basic ringing tones earned 5 Billion dollars of revenues in 2008. More than 2.5x more than all of iTunes. And I have not even started with 'Ringback' tones - also today bigger than all of iTunes - or any more advanced forms of mobile music styles such as Realtones/Truetones; and full MP3 track downloads, and music streaming services, and mobile music videos, and welcoming tunes, and background tunes, and mood music, and music gifting and music recognition and yes alas, the mobile karaoke service. Each of those is a real service earning millions. Music recognition (Shazam, if you know the brand) earned 100 million dollars last year out of 35 million paying customers. Music on mobile is worth 13.9 Billion dollars in 2009. When you remove mobile music, the rest of the global music industry is worth only 17 Billion dollars. Mobile forms of revenues account for 45% of all music spending by consumers on the planet!

And its not just music. News services on mobile deliver 9.8 Billion dollars annually. Videogaming on mobile is even bigger at 11.6 Billion dollars. And while few actually watch full TV episodes on mobile (millions do, but mostly the youth) the real money out of 'mobile TV and video related services' is of course in the SMS-to-TV service opportunity - think voting for American Idol or the Eurovision Song Contest - Total TV and video services including SMS voting on TV are worth.... 14 Billion dollars in 2009. How much is YouTube contributing to the income of NBC or Fox or HBO or Disney or the BBC? Not much. But mobile video and related services including SMS votes - deliver already 4% of the total worldwide TV industry revenues. Thats exactly the same level as ringing tones were early in the previous decade.

Service example. The Real Madrid soccer/football team launched a mobile service version of their fan club. It includes just about anything you could hope for as a fan, from game scores and updates, to player biographies and stats, to ticketing, to sales of merchandise like jerseys etc. They have signed up 100,000 fans to the service and it earns... 14 Million Euros per year (21 million dollars). Mobile is a magical money-making machine!

MOBILE ADVERTISING GREW 85% LAST YEAR AS ECONOMY CRASHED

So the last item I want to discuss is mobile advertising. mAd as I like to call it, is a tiny part of the big picture of mobile, but is of great interest in particular last year after the news that Google bought Admob. So the story? There has been advertising on mobile phones for a decade since first introduced in Finland. Today 1.8 Billion people on the planet have received ads on their phone and in leading countries like Spain, Japan and South Africa, between 70% and 90% of mobile phone owners receive ads on them.

Early mobile ads were horrid bastardized copies of legacy PC internet concepts, like banner ads and spam SMS. Then there were several further moronic ideas of old intrusive interruptive ad models force-fed to mobile like pre-roll ads for video and location-based ads. I was there from the start, literally chairing the world's first conference on mobile advertising and have witnessed the slow painful growth of this magnificent opportunity. As an ad channel, every single one of 4.6 mobile phone subscriptions can be used to deliver the simplest sound and basic text message based advertising. And over 90% of them can receive basic WAP oriented 'mobile internet' (not real internet) advertising and over 80% can receive very advanced multimedia ads on video, music and images, using MMS as the ad platform. Mobile is by far - by a country mile - larger in reach than any other media and these four methods - voice, SMS, WAP and MMS - are the only viable 'mass market' ad propositions. Don't fall for any snake-oil slaes pitches about some silly iPhone App that only 3$ of the nation can even receive and a tiny fraction of iPhone users would actually download.

For the media owners, only mobile can identify every consumer (almost every one but far more than on any other platform). And for brands, mobile can result in direct call-to-action including click-to-pay, even if the customer does not own a credit card or Paypal account. Mobile is a magnificent couponing medium as well as a ticketing system. And most importantly for any legacy media from the 1st mass medium print, to the 6th mass medium the PC based internet - only mobile is present when any other media is consumed. Thus mobile can enhance media consumption on other platforms - making a one-way commuciation like radio or a billboard suddenly interacive - and indeed, to collect revenues for a legacy media like TV does with American Idol or the intenet does with say the childrens virtual playground Habbo Hotel (yet another example of making tons of profits on mobile, while giving the internet version for free. Habbo and its owner Sulake of Finland invented the whole premium mobile payment model for internet media content. They became profitable early in the last decade. How many other totally free internet services do you know that are profitable? Mobile is the magical money-making machine).

It took the mobile advertising industry much of the decade to discover that mobile has unique abilities (as I now teach in my workshops, a total of 8 unique abilities). Using those, far more advanced mobile ad models are being developed, that are truly personal; that are not just 'interactive' but actually 'engagement marketing' and ones that often reward recepients if they spread the ads via viral marketing. When using the most modern 'engagement marketing' methods, hundreds and even thousands of consecutive mobile ad campaigns by the giants of the ad industry, Coca Cola, Nike, Mastercard, Ford, L'Oreal etc etc etc - have achieved consistent response rates from 20% in the USA to 25% in the UK to 30% in Slovenia to 40% in Japan. Consistent response rates (not just click-through rates) and across thousands of campaigns - but not as stupid banner ads or spam SMS or pre-roll ads or location-based spam; but rather by using 'engagement marketing' methods. On the internet the average 'click-through rate' (an inferior metric than response rate) is 0.2%. Thus modern intelligent mobile ad campaings, when using 'engagement marketing' methods, deliver yields of not ten times better - but indeed well in excess of 100 times better results than the internet. Consistently - not an early curiosity peak, consistently across thounsands of campaigns on four continents.

As these newer better engement marketing methods are being discovered, learned, spread and utilized, mobile advertising grew enormously last year, from 3.1 Billion dollars to 5.9 Billion dollars - a mind-boggling 85% growth rate in a year when the overall economy crashed, and all advertising budgets were severely slashed, and all non-digital advertising budgest were decimated and even internet advertising was flat for the year. But mobile exploded by 85% growth.

Service example. There is no better way to illustrate this than a basic simple MMS based ad campaign out of Germany that was pure 'engagement marketing' and deserves every award it is entered for. Not by a high tech digital media brand, this was BMW. They used a very clever, tightly targeted and truly personalized ad campaign using MMS to sell winter tyres in Germany. They sent a personalized picture message and offer to German owners of BMW who had bought their car the previous year during the summer months and thus very likely did not own winter tyres. The ads were customized so, that each BMW owner received a frontal view of their own model of car (3 series, 5 series etc) in the right color! So each recepient felt it was 'my car'. Then they suggested a winter tyre and showed what it looked like on that car, and had a link to the BMW mobile web (ie WAP) site with many alternate tyres so the owner could also scroll through alternatives and compare. And finally, the MMS message suggested a nearby registered BMW dealer or service center with the tyres in stock to do the installation. And the best part - they waited with the campaign ready to run, until first now fell in Germany.

The total campaign cost less than 120,000 dollars to run including creative work and air time costs of the MMS messages. The campaign generated a 30% conversion rate (ie not just that consumers clicked on the ads, 30% of the recepients came to a BMW dealer to buy tyres and often also wheel rims). The campaign generated bonus income for BMW that was measured and directly identified to the MMS campaign - worth 45 Million dollars. BMW will never again try to sell tyres the old-fashioned way on newspaper ads and magazine ads and billboards and TV ads...

Mobile is the way to go if you use engagement marketing methods. Mobile advertising will roughly double again in revenues this year and will end up the biggest ad platform of the planet, bigger than the internet, or print ads or radio or even television before this decade is done. Mark my words. As to the year when all ad industry funds vanished due to the economy but mobile ads were so compelling that the brands showered their money on mobile, it grew yes 85% last year.

You may reference any info in this blog and please feel free to link here if you blog about these numbers. The source for all in this blog unless separately mentioned, is TomiAhonen Almanac 2010.

I HAVE MORE INFO FOR YOU

So there. The industry review for 2010. The big picture. Thanks for visiting our site and you may want to bookmark this page or send your colleagues to read it and if you write a blog, feel free to use stats and examples from here and link to this page.

As is my mantra (my personal motto is as I write in all of my books, and print on my business cards, my quotation:) "In a connected age, sharing information is power" - so I will now share one more item with you, a gift to you in fact.

If you would like to have in your pocket, on your smartphone, on your laptop, or printed out in your documents, a simple two page summary of all of these numbers and many many more, I have complied my first ever mobile industry 'Cheat Sheet'. Yes, it has all the numbers of the industry from subscriber numbers, to industry revenues by major categories, to the big mobile industry revenue cateogries, to phone market shares and smartphone market shares, to the phone capabiliies of the installed base globally, to service usage across the major service categories, to the digital divide. and for most data it has this year's number and last year's number and the growth rate. And yes, of course the document is free. And yes, its an unrestricted pdf file that you may freely forward and quote from at length. It is directly taken from the brand new 2010 edition of the TomiAhonen Almanac, an industry statistical resource that is most trusted and referenced the world over. You can receive your copy of the Cheat Sheet: Mobile Industry Numbers 2010 if you send me an email to tomi at tomiahonen dot com and I will send you the two page pdf file by return email.

FURTHER ARTICLES? DEPENDS ON YOUR INTEREST

(note some of the links are not yet active, all will be by end of Friday)

I have several deep, fact-filled and business-oriented articles about the industry on this blog that may be of interest. So consider what you really want to know next.

If you are interested in the handsets and smartphones, I analyze the total marketshares for the full year 2009 for the top 10 handset makers, plus smartphones and operating systems in this 2009 phone market view. And if you would like my insider view to how the smartphone market will evolve this year (such as why Samsung can grow to 3x its size but HTC, Motorola, Google, Apple and RIM cannot) here is the Smartphones Bloodbath 2010. And if you really want to understand what it takes to gain market share in smartphones, this is what determines who wins in smartphones.

If you want to understand the new innovative business models of mobile, I discussed all six including the two legacy business models copied from the PC based internet and the four new models introduced in the past few years, at this blog: the ways to make money in mobile

If you are interested in the Digital Divide, I have a comprehensive view to it here.

If you would like to understand more about the unique abilities of mobile or how the phone has evolved from a single-purpose device to one with 10 abilities, follow the links.

If you are from advertising and would like to understand what can be better than banner ads and what kind of measures we should use, then here are the links to

If you want to understand SMS text messaging, I explained the ins and outs of the biggest data application on the planet last year at this blog

If you are more of a strategic thinker and would like to consider the long-term, then I have my famous 20 year forecast (5 years ago, so 15 years more to go) to the Canadian industry at this link, and my current 5 best predictions with Mobile Trends 2020 at this link.

If you would like to see me discuss these stories and see my slides and also perhaps want to see 'how' I perform in front of an audience (if you are considering booking me a speaker for example) then please view my keynote to the big Picnic event in Amsterdam last year: Tomi slides/presentation at Picnic

And finally, if you want to understand what is your economic opportunity in this industry, whether your company or brand or department or team or you personally, I have explained fully the economic opportunity of the moment in mobile in the digital Klondyke.

TOMI AHONEN ALMANAC 2010

Please finally allow me one plug. All the info in this blog are source: TomiAhonen Almanac 2010. My Almanac is an annual statistical review of the most relevant industry stats, with far more depth and detail than this blog can deliver. If this blog satisfied your needs, I am totally happy. If however, you have a need for more info about the industry, its size, or perhaps some breakdowns like what kinds of music services form the 13.9 Billion dollar size mobile music sector, or the installed base of smartphones over time, or the geographic breakdown of multiple subscriptions and unque mobile phone subscribers; or age breakdowns, or revenues per user, or the main data for specific countries of the 60 biggest countries on the planet, etc, that sort of info is in the Almanac.

The Almanac is not going to cripple your budget. The 180 page edition of the TomiAhonen Almanac 2010 will cost 9.99 Euros. It is an unrestricted pdf file and formatted for smartphone readers, so you can carry all the industry data in your pocket. It has over 80 charts, tables and diagrams. I do think it is the best value for statistical information about our industry. If you do want more facts about the industry, take a look at the 2009 Almanac and its sample pages and the endorsements by industry leaders. And the Almanac 2010 is already taking pre-orders. I expect it to ship next week (week of 8-12 February). The Almanac is not sold on Amazon, so the only place to see it and buy it is at this link: Tomi Ahonen Almanac 2010. (note currently it shows the 2009 edition but is taking pre-orders for 2010)

This was a long blog once again, but thanks for reading to the end. Please feel free to leave comments, we are always engaging here on the CDB blog and I will get to all comments as soon as I can.

The Big Picture “All the Stats” Total View to Mobile Industry, 2010 Edition

Tomi T Ahonen — Fri, 05 Feb 2010 04:24:30 +0000

Its been our custom to give a review of the mobile industry at the start of the year, usually before the big Mobile World Congress conferece in Barcelona. I struggle to come up with 'interesting' ways to discuss the stats, but lets try once again. This is indeed a giant, complex and most dynamic industry. I am sorry, for me to be reasonably comprehensive, this blog cannot be brief. But consider it the only one place you need to come to during 2010 to find all the numbers. To paraphrase Woody Allen, All the facts you wanted to know about mobile (but were afraid to ask).

4.6 BILLION SUBSCRIPTIONS

The mobile industry has now 4.6 Billion active subscriptions. Note that the planet as 6.8 Billion people. And while most in the Industrialized World have TV sets, PCs and internet access - those are not normal for most people on the planet. So for contrast - on the planet there are 1.2 Billion PCs of any kind including netbooks; 1.6 Billion TV sets, 1.7 Billion Internet users (including those who access at an internet cafe, or via a mobile phone); and 3.9 Billion FM radio receivers. But 4.6 Billion mobile phone subscriptions. A mobile phone account for 68% of the planet already!

Now, not all subscriptions are actual unique users. The total number of unique users is 3.4 Billion people ie exactly now half of the planet. About 35% of those unique users have two or more subscriptions. And many but not all who have two accounts also have two phones. So the total number of actual mobile phone handsets in use is 3.9 Billion. In Eastern Europe already 81% of unique mobile phone users have more than one account. In Africa only 17% of subscribers have two or more accounts.

A few specific details - there are about 200 million people beyond the 3.4 Billion unique users who live in poor households where they share a phone, such as often in Africa for example. Out of the 3.9 Billion handsets in use, about 375 million are second-hand phones (as in many countries of the Emerging World) or hand-me-down phones (as often with younger teenagers and children). And out of the 4.6 Billion subcriptions 200 million are not actually used by humans, but are 'telematics' subscriptions connecting machines, remote metering etc. In the year of the global economic crisis, the mobile industry grew 15% more paying subscriptions. This industry is not just healthy and robust, it is positively a powerhouse.

New Service example. Let me give you one example service. In many parts of the Emerging World there are poor people living in villages where there is no traditional media at all. No TV coverage, no newspapers, no internet, no fixed landline and even no FM radio coverage. But increasingly there is mobile telecoms ie cellular telecoms reach. For example out of the Billion people of India, about 200 million live in such villages where there is no FM radio coverage even, but there is cellular mobile phone reach. What happens? These people are poor but not without any funds. And they have almost no 'media' to entertain them at evenings. But they are human, they still enjoy music and drama and sports and news. How can they get it? Through their mobile phones of course. In India there are countless mobile phone premium voice services (like in Western markets we have sex phone lines) which deliver news, sports scores, pop music. The latest Bollywood musical hits and the scores or even live game broadcasts of Cricket games etc. This type of new 'mobile radio' deliveres as much income in India as the total radio industry of India. Amazing.

Since 2008, mobile has become the most widely spread technology on the planet. The phone is also the most commonly used clock, as many abandon wristwatches; it is the most used alarm clock; there are three times as many cameraphones in use today than any kind of stand-alone camera, digital or film-based - ever manufactured. More people have an MP3 player on their phone today than own any kind of musicplayer including iPods and home CD players.

EARNS 1.1 TRILLION DOLLARS IN ANNUAL REVENUES

The mobile industry is a global giant which generated 1.07 Trillion (1,070 Billion) dollars in annual revenues last year. Compare that with 'major' industries such as print (newspapers, magazines & books) or Television or advertising or the computer industry - these are all industries roughly speaking worth only half a Trillion dollars. The fixed landline phone industry is also worth in that group. Only a few global industries earn a Trillion dollars such as automobiles, food, construction and military spending. And since 2008 also mobile telecoms.

Of the 1.07 Trillion dollars, 865 Billion dollars is service revenues and 205 Billion is hardware. The service revenues split so that 615 Billion dollars is voice call revenue; 153 Billion dollars is mobile messaging revenue; and 98 Billion dollars is non-messaging 'mobile data' revenues. Of the hardware income, 160 Billion dollars is handset sales and 45 Billion dollars is network infrastructure. Of the mobile messaging 113 B dollars is earned by SMS text messaging and 29 Billion dollars by MMS messaging. The mobile data revenues (including messaging) are now larger at 253 Billion dollars than all internet-related revenues including advertising, content revenues, and access fees (broadband and dial-up) added together.

These numbers will become numbing very fast. So a bit of context. There are 920 million people who own and operate a car on the planet, thus paying for petrol and insurance and car maintenance regularly. There are 950 million people who watch multi-channel TV like cable TV or satellite TV and a vast majority of those pay to do so. There are about 1.15 Billion people with a landline phone account. About 1.2 Billion PC owners pay for an internet access (about half now on broadband). There are about 1.7 Billion households on the planet, so in most cases but not all, those involve rents, mortgages, electricity utility bills etc. But there are 4.6 Billion paid subscriptions to mobile telecoms. You get the picture. Mobile is the giant among lilliputs.

The average mobile phone user when counted as total subscriptions on the planet pays 15.70 dollars per month for mobile telecoms services.That ranges from 47 dollars per month in North America to 7 dollars per month in countries of Developing parts of Asia. This number is somewhat misleadingly called the "ARPU" (Average Revenue Per User) but should be called "Average Revenue Per Subscription". When re-calculated and adjusted for unique users, the nominal 15.70 dollars per month becomes a real average monthly spending per "unique users" at 21.30 dollars per month on a worldwide average. The average mobile phone subscriber on the planet spends 2.95 dollars per month on mobile messaging and 1.75 dollars per month on non-messaging mobile data services. Data services overall account for 29% of all mobile phone service revenues.

Service example. The internet is struggling to discover ways to make money, they essentially only can beg for some subscription revenues or hope to build 'eyeballs' to try to monetize on advertising. The mobile services industry has invented four newer business models and thus has six, as I explain in my recent books. Consider social networks. Twitter, Facebook, YouTube, Flickr, Wikipedia, etc, how can they earn money? Apart from some advertising income they have millions of users but make pitifully little money if any. Meanwhile mobile social networks from Itsmy out of Germany, Flirtomatic out of the UK, Cyworld out of South Korea, Frenclub out of Malaysia, Mixi, Mobagetown and Gree out of Japan etc - these all make money. Tons and tons and tons of money. Now think of this. All three Japanese mobile social networks, Mixi, Mobagetown and Gree - have similar modern new business models with no or modest subscription fees, and advertising accounts for a small minor part of their total income. Yet all three are making between 200 and 400 million dollars annual in revenues and each of the three generates profits - and get this - all three are listed on the Japanese stock market! That is a business that has become 'mature' enough if it is accepted by the stock market. None of that 'new economy' nonsense of 'build enough of an audience but don't know how to monetize it' nonsense.

The mobile telecoms industry was launched in Japan by NTT in 1979 (the industry was not launched by Motorola in 1983). In only 29 years the global mobile telecoms industry breached the Trillion dollar annual sales level, becoming the fastest-growing Trillion dollar industry of all time, and doing it so rapidly, odds are this record will stand for centuries. And even in the time of the economic downturn, the mobile industry grew 7% in revenues.

SOLD 1.1B NEW HANDSETS

The industry sells over a Billion new handsets every year. Last year it sold 1.13 Billion new mobile phones. This compares with 300 million new TV sets, 270 million new PCs of any kind including netbooks, and 250 million DVD players. Videogame consoles, MP3 players, eBook readers, digital cameras etc sell in far smaller numbers. No other consumer electronics comes even close to mobile. The average replacement cycle for mobile phones, at 17 months, is also far shorter than for other digital technologies.

The 3.9 Billion phones in use have rapidly gained enormous capabilities. 100% of the installed base of mobile phones are able to receive SMS text messages. 95% of all phones have some kind of browser, whether a 'real' xTML browser of a more limited WAP browser. 93% of all phones in use have a color screen. 80% of all phones in use can receive MMS multimedia messages. 73% of all phones in use are cameraphones. 71% of all phones have a modern xTML web browser. Over half of all phones in use today have bluetooth, a media player; and can accept downloads ie have Java or Brew. 44% have a memory card slot, 29% are 3G high speed data phones or faster and 19% have WiFi. Only 13% of the installed base of mobile phones in use are smartphones worldwide.

If we look only at smartphones, then in 2009 the Nokia brand formed 39% of all new smartphones sold. RIM and its Blackberry smartphones sold 21%. Apple's iPhone achieved 15% of new smartphone sales in 2009. HTC was fourth biggest selling 5% and Fujitsu fifth biggest selling 4% of all smartphones. All other of over two dozen brands of smartphones including Samsung, SonyEricsson, LG, Google, Motorola, Palm, etc sold a combined 16%. Of the installed base of smartphones, Symbian branded smartphones (about a dozen brands but mostly Nokia) account for 56% of all smartphones in use on the planet. Blackberry smartphones are the second most common type by operating system, with 16%. Apple's iPhone OS/X forms 8% of all smartphones in use. Microsoft's Windows Mobile (used by over a dozen manufacturers but predominantly HTC brand) control 7% of all smartphones in use. All other smartphone operating systems such as Linux Mobile, Palm, Google Android, Nokia Maemo etc form the rest at 13% of all smartphones in use.

Service example. While the US focused IT and financial press obsess about 'apps stores' the mobile handset market is very dynamic and innovative and can provide great opportunities for innovation. And it does not require 'apps' sold to consumers to be able to capitalize on mobile. Take basic SMS alerts. All mobile phones on the planet can accept text messages. So we can build alerts services around those. So hospitals in Britain will send reminders when you have your doctor's appointment. Dentists in Finland will let you take cancelled appointments on a first-come-first-served basis. Surf cams in South Africa and Australia will send you surfing alerts with links to the surf cam so you can also use your phone to view the beach if you feel like surfing. Here in Hong Kong the government sent a warning to all residents when they discovered the first case of swine flu, through SMS to every phone.

Airlines all over the world send alerts if you are a registered frequent flier and your next flight is delayed, so you don't need to come to the airport and wait for hours there. I was just in Norway and met with one of the most innovative airlines, Norwegian, which was the world's first airline to do the full air passenger mobile ticketing solution - from selling your ticket on your phone, to the check-in via phone to the boarding pass on your phone screen - imagine how much this saves money for the discount airline. Norwegian the airline is so thrilled with their mobile telecoms experience that they are launching their own... mobile phone service in Norway. Like I say, this industry is a 'magical money-making machine' and it is a gateway for other industries to make money or deliver customer excellence. And while we are on those SMS alerts, think of these. In South Korea the mobile phone 'love detector' will monitor tension in the person on the voice call and send an alert to you telling you if your partner is telling the truth and if there is still romance in that person's voice... Yes, its getting that silly now. And in Japan, Agrihouse introduced a service that lets your plants send you alerts when they need to be watered. We can make millions without the silly apps stores.

Now yes, last year for the first time ever, actual mobile phone sales levels dipped with this economic downturn, by 5%. But even as the economy crashed last year, smartphone sales grew 9%

3.6 BILLION SMS TEXT MESSAGING USERS

Mobile phone messaging using SMS text messaging is the most widely used data application on the planet. There are 3 times as many active users of SMS as there are total number of personal computers on the planet. The total active user base of SMS is more than 2.5 times larger than the total unique user base of email. At 3.6 Billion active users, SMS text messaging is now used by 78% of all mobile phone subscribers - and more amazingly, SMS is used now by 53% of the total population of planet Earth. The planet sent 4.6 Trillion SMS text messages last year, which is 12.6 Billion messages per day (two SMS for every live person on the planet per day), or 8.7 million messages every minute. At 2.5 US cents per SMS cost on average globally, the SMS industry earns another million dollars every five minutes.

The second most used data application on the planet is not Google search or Facebook or email or any internet service. It is MMS multimedia messaging, often mistakenly thought of as only 'picture messaging'. MMS is a powerful media channel to deliver pictures, videos, sounds, text - and advertising - with a potential reach of 3.1 Billion people. That is a reach almost exactly twice the total reach of television. Already 1.7 Billion people - 37% of all mobile subscribers - are active users of MMS multimedia messaging, which is over three times the total daily circulations of all newspapers printed around the world. MMS is often mistakenly thought of as a 'failure' but delivers 29 Billion dollars of revenues globally - which makes it bigger than the global music industry or total Hollywood box office revenues worldwide. Hardly a 'failure'. MMS revenues grew 12% in 2009 while the global economy was in crisis.

Service example. British AQA Any Question Answered does just what it says in the title. They are a paid SMS based service that will answer any question. You have your sports argument at a pub, send the question to AQA and get your answer. Or you need to know what is the height of the second tallest mountain or whatever, they have it. But the users will of course try to stump the service asking those eternal questions like what happens if your vehicle is travelling at the speed of light and you turn on your headlights or which tastes better, bread that is cut in triangles or bread that is cut in squares etc. And more than that, when drunken young adults have a laugh at the pub, then they send in the questions like asking AQA which of the three girls sitting with the boys at the table is the sexiest. Obviously AQA won't know these girls, yet they will answer. And their answers are often very funny and entertaining. Each answer is free, each question costs one UK pound. Easy. And this model is viable you ask? Anyone could just Google for answers? Yes, this makes oodles of money because it is entertaining as well as informative. 4 Million pounds per year (7 million dollars) in revenues out of silly answers to stupid questions. If the same level happened in America, thats about 35 million dollars in income. You still think SMS is not for you?

The most used data application on the planet became the fastest-ever industry to reach 100 Billion dollars in annual revenues in only 16 years. And grew users, services and revenues in 2009, a year of economic crisis. MMS is following on the heels of SMS hitting 29 Billion dollars in only 9 years and yes, MMS also grew users, services and revenues this past year.

MORE INTERNET USERS ON MOBILE THAN ON PERSONAL COMPUTERS

The transition point has been passed and as we heard Nokia CEO say a few weeks ago, today there are more people who access browser-based services on a mobile phone than on a personal computer. Out of all 1.7 Billion internet users today, there are only 400 million who never use a mobile phone and only access on a PC. 800 million use both a PC and a mobile phone to access the internet. And 500 million people today never use a PC to access the web and only use a phone. In numerous populous Emerging World countries the majority of internet access is from mobile such as in India, South Africa, Bangladesh, Russia etc. In many very advanced Industrialized World countries of high broadband penetration the same phenomenon has happened such as in Japan, Sweden, South Korea and Taiwan where also more people access the internet on a phone than on a PC. Thus the total PC based internet user base is now 1.2 Billion people but the mobile phone based internet user number is 1.3 Billion people. Note that these numbers include any browser services including WAP (often called 'mobile internet' as distinct from the 'real internet' using xTML web browsers on mobile phones)

Service example. Take Flirtomatic from the UK. If you have a social networking site on the legacy PC based internet, like say Facebook or YouTube or MySpace that is not making profits, and you then release that same service on 'the real internet on mobile' say on a smartphone like an iPhone, on an 'all you can eat' data plan; there is no magic there, suddenly turning a free service into a money-maker. No. Trying to put the 6th mass medium ie the legacy PC internet onto a 7th mass medium mobile phone is as dumb as trying to put a 'real horse' in to a car (or to use a media example, as silly as using your TV to listen to radio). We have a FAR MORE POWERFUL engine in the car than the horse, and we have a FAR MORE POWERFUL engine in the mobile, called the 'mobile internet' (a very bad term, by the way). But mobile has 8 unique abilities that cannot be replicated on any of the legacy 6 mass media.

So Flirtomatic, another 'social networking' service out of the UK. Flirtomatic was launched as an integrated service on both the legacy PC internet and the 'mobile internet'. So in essence, Flirtomatic on mobile is a 'WAP' service. And before you complain for one second that 'everybody knows WAP is crap' - stop and consider this. Flirtomatic has four separate revenue streams not the two on the legacy PC internet. And Flirtomatic abandoned its subscription as 'unnecessary' in 2007 ! and Flirtomatic earns less than a quarter of its income from advertising. Their other three revenue streams? Personalization, virtual gifts, and 'ego services'. Already in four countries, they have passed 2 million subscribers in Britain. And most importantly, Flirtomatic is profitable. How many internet-based social networks can say that? And they did it without 'the real internet in your pocket' they did it on WAP. Take that to your bank.

MOBILE PREMIUM CONTENT AND SERVICES WORTH 98 BILLION DOLLARS

The total premium data revenues on mobile data services, after removing mobile messaging, are worth 98 Billion dollars. Only 5.9 Billion dollars of that total is advertising revenue. So paid content and services on non-messaging mobile services total 92 Billion dollars worldwide. That number is four times as much as all paid content revenues on the legacy PC based internet. Meanwhile mobile advertising revenues grew 85% in 2009, a year when the global economy 'cratered' to quote a former US presidential candidate. Many in the 'real' media industries tend to dismiss mobile content as silly frivolous fringes of the content world, like the Crazy Frog ringing tone for example (that was the first pure ringing tone to become number 1 on the British weekly pop music charts five years ago).

So first some market realities. Basic 'ploink-ploink' ringing tones may be 'minimalist' and modest in their musical range, and short in duration, but understand their economic power. The total Apple iTunes music store - the world's biggest online digital music store - earns under 2 Billion dollars of revenues in its music sales annually. Basic ringing tones - I am not talking of 'truetones' or real samples or real music, the very basic simple monophonic tunes you hear random people have on their phones when you walk on the street - basic ringing tones earned 5 Billion dollars of revenues in 2008. More than 2.5x more than all of iTunes. And I have not even started with 'Ringback' tones - also today bigger than all of iTunes - or any more advanced forms of mobile music styles such as Realtones/Truetones; and full MP3 track downloads, and music streaming services, and mobile music videos, and welcoming tunes, and background tunes, and mood music, and music gifting and music recognition and yes alas, the mobile karaoke service. Each of those is a real service earning millions. Music recognition (Shazam, if you know the brand) earned 100 million dollars last year out of 35 million paying customers. Music on mobile is worth 13.9 Billion dollars in 2009. When you remove mobile music, the rest of the global music industry is worth only 17 Billion dollars. Mobile forms of revenues account for 45% of all music spending by consumers on the planet!

And its not just music. News services on mobile deliver 9.8 Billion dollars annually. Videogaming on mobile is even bigger at 11.6 Billion dollars. And while few actually watch full TV episodes on mobile (millions do, but mostly the youth) the real money out of 'mobile TV and video related services' is of course in the SMS-to-TV service opportunity - think voting for American Idol or the Eurovision Song Contest - Total TV and video services including SMS voting on TV are worth.... 14 Billion dollars in 2009. How much is YouTube contributing to the income of NBC or Fox or HBO or Disney or the BBC? Not much. But mobile video and related services including SMS votes - deliver already 4% of the total worldwide TV industry revenues. Thats exactly the same level as ringing tones were early in the previous decade.

Service example. The Real Madrid soccer/football team launched a mobile service version of their fan club. It includes just about anything you could hope for as a fan, from game scores and updates, to player biographies and stats, to ticketing, to sales of merchandise like jerseys etc. They have signed up 100,000 fans to the service and it earns... 14 Million Euros per year (21 million dollars). Mobile is a magical money-making machine!

MOBILE ADVERTISING GREW 85% LAST YEAR AS ECONOMY CRASHED

So the last item I want to discuss is mobile advertising. mAd as I like to call it, is a tiny part of the big picture of mobile, but is of great interest in particular last year after the news that Google bought Admob. So the story? There has been advertising on mobile phones for a decade since first introduced in Finland. Today 1.8 Billion people on the planet have received ads on their phone and in leading countries like Spain, Japan and South Africa, between 70% and 90% of mobile phone owners receive ads on them.

Early mobile ads were horrid bastardized copies of legacy PC internet concepts, like banner ads and spam SMS. Then there were several further moronic ideas of old intrusive interruptive ad models force-fed to mobile like pre-roll ads for video and location-based ads. I was there from the start, literally chairing the world's first conference on mobile advertising and have witnessed the slow painful growth of this magnificent opportunity. As an ad channel, every single one of 4.6 mobile phone subscriptions can be used to deliver the simplest sound and basic text message based advertising. And over 90% of them can receive basic WAP oriented 'mobile internet' (not real internet) advertising and over 80% can receive very advanced multimedia ads on video, music and images, using MMS as the ad platform. Mobile is by far - by a country mile - larger in reach than any other media and these four methods - voice, SMS, WAP and MMS - are the only viable 'mass market' ad propositions. Don't fall for any snake-oil slaes pitches about some silly iPhone App that only 3% of the nation can even receive and a tiny fraction of iPhone users would actually download.

For the media owners, only mobile can identify every consumer (almost every one but far more than on any other platform). And for brands, mobile can result in direct call-to-action including click-to-pay, even if the customer does not own a credit card or Paypal account. Mobile is a magnificent couponing medium as well as a ticketing system. And most importantly for any legacy media from the 1st mass medium print, to the 6th mass medium the PC based internet - only mobile is present when any other media is consumed. Thus mobile can enhance media consumption on other platforms - making a one-way commuciation like radio or a billboard suddenly interacive - and indeed, to collect revenues for a legacy media like TV does with American Idol or the intenet does with say the childrens virtual playground Habbo Hotel (yet another example of making tons of profits on mobile, while giving the internet version for free. Habbo and its owner Sulake of Finland invented the whole premium mobile payment model for internet media content. They became profitable early in the last decade. How many other totally free internet services do you know that are profitable? Mobile is the magical money-making machine).

It took the mobile advertising industry much of the decade to discover that mobile has unique abilities (as I now teach in my workshops, a total of 8 unique abilities). Using those, far more advanced mobile ad models are being developed, that are truly personal; that are not just 'interactive' but actually 'engagement marketing' and ones that often reward recepients if they spread the ads via viral marketing. When using the most modern 'engagement marketing' methods, hundreds and even thousands of consecutive mobile ad campaigns by the giants of the ad industry, Coca Cola, Nike, Mastercard, Ford, L'Oreal etc etc etc - have achieved consistent response rates from 20% in the USA to 25% in the UK to 30% in Slovenia to 40% in Japan. Consistent response rates (not just click-through rates) and across thousands of campaigns - but not as stupid banner ads or spam SMS or pre-roll ads or location-based spam; but rather by using 'engagement marketing' methods. On the internet the average 'click-through rate' (an inferior metric than response rate) is 0.2%. Thus modern intelligent mobile ad campaings, when using 'engagement marketing' methods, deliver yields of not ten times better - but indeed well in excess of 100 times better results than the internet. Consistently - not an early curiosity peak, consistently across thounsands of campaigns on four continents.

As these newer better engement marketing methods are being discovered, learned, spread and utilized, mobile advertising grew enormously last year, from 3.1 Billion dollars to 5.9 Billion dollars - a mind-boggling 85% growth rate in a year when the overall economy crashed, and all advertising budgets were severely slashed, and all non-digital advertising budgest were decimated and even internet advertising was flat for the year. But mobile exploded by 85% growth.

Service example. There is no better way to illustrate this than a basic simple MMS based ad campaign out of Germany that was pure 'engagement marketing' and deserves every award it is entered for. Not by a high tech digital media brand, this was BMW. They used a very clever, tightly targeted and truly personalized ad campaign using MMS to sell winter tyres in Germany. They sent a personalized picture message and offer to German owners of BMW who had bought their car the previous year during the summer months and thus very likely did not own winter tyres. The ads were customized so, that each BMW owner received a frontal view of their own model of car (3 series, 5 series etc) in the right color! So each recepient felt it was 'my car'. Then they suggested a winter tyre and showed what it looked like on that car, and had a link to the BMW mobile web (ie WAP) site with many alternate tyres so the owner could also scroll through alternatives and compare. And finally, the MMS message suggested a nearby registered BMW dealer or service center with the tyres in stock to do the installation. And the best part - they waited with the campaign ready to run, until the day the first snow started to fall in Germany.

The total campaign cost less than 120,000 dollars to run including creative work and air time costs of the MMS messages. The campaign generated a 30% conversion rate (ie not just that consumers clicked on the ads, 30% of the recepients came to a BMW dealer to buy tyres and often also wheel rims). The campaign generated bonus income for BMW that was measured and directly identified to the MMS campaign - worth 45 Million dollars. BMW will never again try to sell tyres the old-fashioned way on newspaper ads and magazine ads and billboards and TV ads...

Mobile is the way to go if you use engagement marketing methods. Mobile advertising will roughly double again in revenues this year and will end up the biggest ad platform of the planet, bigger than the internet, or print ads or radio or even television before this decade is done. Mark my words. As to the year when all ad industry funds vanished due to the economy but mobile ads were so compelling that the brands showered their money on mobile, it grew yes 85% last year.

You may reference any info in this blog and please feel free to link here if you blog about these numbers. The source for all in this blog unless separately mentioned, is TomiAhonen Almanac 2010.

I HAVE MORE INFO FOR YOU

So there. The industry review for 2010. The big picture. Thanks for visiting our site and you may want to bookmark this page or send your colleagues to read it and if you write a blog, feel free to use stats and examples from here and link to this page.

As is my mantra (my personal motto is as I write in all of my books, and print on my business cards, my quotation:) "In a connected age, sharing information is power" - so I will now share one more item with you, a gift to you in fact.

If you would like to have in your pocket, on your smartphone, on your laptop, or printed out in your documents, a simple two page summary of all of these numbers and many many more, I have complied my first ever mobile industry 'Cheat Sheet'. Yes, it has all the numbers of the industry from subscriber numbers, to industry revenues by major categories, to the big mobile industry revenue cateogries, to phone market shares and smartphone market shares, to the phone capabiliies of the installed base globally, to service usage across the major service categories, to the digital divide. and for most data it has this year's number and last year's number and the growth rate. And yes, of course the document is free. And yes, its an unrestricted pdf file that you may freely forward and quote from at length. It is directly taken from the brand new 2010 edition of the TomiAhonen Almanac, an industry statistical resource that is most trusted and referenced the world over. You can receive your copy of the Cheat Sheet: Mobile Industry Numbers 2010 if you send me an email to tomi at tomiahonen dot com and I will send you the two page pdf file by return email.

FURTHER ARTICLES? DEPENDS ON YOUR INTEREST

I have several deep, fact-filled and business-oriented articles about the industry on this blog that may be of interest. So consider what you really want to know next.

If you are interested in the handsets and smartphones, I analyze thetotal marketshares for the full year 2009 for the top 10 handset makers, plus smartphones and operating systems in this 2009 phone market view. And if you would like my insider view to how the smartphone market will evolve this year (such as why Samsung can grow to 3x its size but HTC, Motorola, Google, Apple and RIM cannot) here is the Smartphones Bloodbath 2010. And if you really want to understand what it takes to gain market share in smartphones, this is what determines who wins in smartphones.

If you want to understand the new innovative business models of mobile, I discussed all six including the two legacy business models copied from the PC based internet and the four new models introduced in the past few years, at this blog:the 6 ways to make money in mobile

If you are interested in the Digital Divide, I have a comprehensive view to it here.

If you would like to understand more about the 8 unique abilities, the first 7 are explained here and the 8th ability is here or how the phone has evolved from a single-purpose device to one with 10 abilities, follow the links.

If you are from advertising and would like to understand what can be better than banner ads and what kind of measures we should use, I also dig deep into the successful campaign metrics and explain why traditional ad metrics like audience reach are meaningless in mobile.

If you want to understand SMS text messaging, I explained the ins and outs of the biggest data application on the planet last year at this blog

If you have heard that I am 'against' apps stores, then my views of why the Apps Stores are Totally Irrelevant Today are here, and then after that please read why I do think Apps are Good for the industry in the long run.

I am also famous for once believing passionately into the big promise of location-based services, but have changed my mind and now believe they are a massive waste of effort that are a bad choice for investment or service development. I may be wrong, I may be right - but I have once believed in them, perhaps my 'change of mind' carries more weight than those who blindly believe in them. Read this to understand the Elusive Pot of Gold.

And there are still many who have somehow gotten the impression that I hate Apple. If that is what you think, why not read this 'definitive' prediction of how important the iPhone would become - written before the first iPhone had been sold, in Two Eras: Age Before iPhone and Age After iPhone. And let it be told one more time, I never called the iPhone a 'jesusphone' - that was mistakenly attributed to me based on this blog posting.

If you believed like Winston Churchill, that the further back you look, the further forward you see, ie if there's a bit of a history buff in you (ah, a kindered spirit!) then check out why the previous decade should be called the Nokia Decade, and why NTT DoCoMo of Japan has been the true innovator for our industry for 30 years.

If you are more of a strategic thinker and would like to consider the long-term, then I have my famous 20 year forecast (5 years ago, so 15 years more to go), and my current 5 best predictions with Mobile Trends 2020 at this link.

If you would like to see me discuss these stories and see my slides and also perhaps want to see 'how' I perform in front of an audience (if you are considering booking me a speaker for example) then please view my keynote to the big Picnic event in Amsterdam last year: Tomi slides/presentation at Picnic

And finally, if you want to understand what is your economic opportunity in this industry, whether your company or brand or department or team or you personally, I have explained fully the economic opportunity of the moment in mobile in the digital Klondyke.

TOMI AHONEN ALMANAC 2010

Please finally allow me one plug. All the info in this blog are source: TomiAhonen Almanac 2010. My Almanac is an annual statistical review of the most relevant industry stats, with far more depth and detail than this blog can deliver. If this blog satisfied your needs, I am totally happy. If however, you have a need for more info about the industry, its size, or perhaps some breakdowns like what kinds of music services form the 13.9 Billion dollar size mobile music sector, or the installed base of smartphones over time, or the geographic breakdown of multiple subscriptions and unque mobile phone subscribers; or age breakdowns, or revenues per user, or the main data for specific countries of the 60 biggest countries on the planet, etc, that sort of info is in the Almanac.

The Almanac is not going to cripple your budget. The 180 page edition of the TomiAhonen Almanac 2010 will cost 9.99 Euros. It is an unrestricted pdf file and formatted for smartphone readers, so you can carry all the industry data in your pocket. It has over 80 charts, tables and diagrams. I do think it is the best value for statistical information about our industry. If you do want more facts about the industry, take a look at the 2009 Almanac and its sample pages and the endorsements by industry leaders. And the Almanac 2010 is already taking pre-orders. I expect it to ship next week (week of 8-12 February). The Almanac is not sold on Amazon, so the only place to see it and buy it is at this link: Tomi Ahonen Almanac 2010. (note currently it shows the 2009 edition but is taking pre-orders for 2010)

This was a long blog once again, but thanks for reading to the end. Please feel free to leave comments, ask questions, we are always engaging here on the CDB blog and I will get to all comments as soon as I can.

Our Alan Moore one day course on Social Media & Mobile Media Marketing in 2 weeks

Tomi T Ahonen — Thu, 04 Feb 2010 15:57:28 +0000

Our Alan Moore has been very busy and hasn't been here for a while to blog but asked me to post this link to a course he will run in England in two weeks. Its on Social Media and Mobile Media Marketing, on the 16th of February, held at the Hospital Club and arranged by Figaro Digital. This is truly a masterclass by obviously teh guy who coined the term Engagement Marketing and a rare chance to get a day with Alan as he mostly jetsets around the world consulting with giant global brands on these matters. Check out the course, I wish I was in England, I would attend haha... Alan Moore course on Social and Mobile Marketing.

Idle screen, Idle screen… Ford got 20% click through rates on Idle Screen ads

Tomi T Ahonen — Wed, 03 Feb 2010 16:34:31 +0000

I love the idle screen as a service delivery option for the 7th mass medium (that is mobile, for random readers. Print was first mass medium, TV is 5th, the legacy internet is 6th mass media channel). I liked it so much it is the first case study in my latest hardcover book Mobile as 7th of the Mass Media. And now we have yet another well-executed mobile marketing campaign using idle screen, by Ford. The story was reported in Mobile Marketer today.

So first to be clear. If you take out your phone from your pocket, it will be displaying its idle screen, typically the clock with the screen light turned off. Now imagine if rather than looking at the clock on the idle screen, there was news - like CNN's news ticker - or entertainment or advertising etc. That is a lot of very valuable real-estate that we glance at about 80 times every day (once every 11 minutes in the Industrialized world what with our phone calls, SMS text messages, our phonebook, calendar, clock, camera, media player internet browser etc).

So yes, Ford ran a campaign on the Idle Screen and achieved a 20% click-through rate. Compare that with average click-through rates on the 6th mass media legacy PC based internet banner ads, which get 0.2% click through rates. So Ford achieved literally not 10x better response rates, but 100x better response rates. Awesome. They hit 1 million customers, and received 200,000 visits from those. Wow. Really cool. This is the year of mobile advertising clearly.

Portio mobile messaging user number is too big, can’t be 4B today, more like 3.6B

Tomi T Ahonen — Tue, 02 Feb 2010 19:38:57 +0000

A report came out yesterday by Portio on mobile messaging, that is summarized at Fierce Wireless. Regular readers know I am passionate about SMS messaging and MMS messaging on mobile. And it would greatly please me to find any analyst report new numbers, because inevitably the newer numbers for 2009 will be bigger than the numbers we had for 2008. So now Portio released their 4th edition of their study, the Mobile Messaging Futures 2010-2014 report. And it has good numbers that seem consistent with other sources reported in the past. Numbers like the total mobile messaging industry being worth 150 Billion dollars - consistent with growth from about 130 B last year - and total SMS traffic at 5 Trillion messages in 2009 and MMS revenues at 27 Billion dollars (yes, MMS alone is bigger than the total worldwide music industry - or the total box office revenues of Hollywood movies. And you thought its only person-to-person picture messages of poor quality at high prices. No, MMS is a very viable vibrant and growing media channel especially in Asia)

So far so good. But one number is totally out of whack. The SMS user number. Portio reported that total worldwide SMS text messaging user base has passed 4 Billion. Boy would I love that to be true and some day it certainly will be true. But it is far too much of a jump from last year. At the start of 2009 (end of 2008) the total SMS user base was passing 3 Billion. The total user base was 76% as a percentage of all subscribers of mobile phones worldwide. If Portio's number was true, SMS text messaging active user base would have suddenly jumped enormously to 87% of all mobile phone subscribers. That would be a huge jump in any circumstances.

But there are specific issues that hit SMS user levels at this enormous size. Note that SMS user base even at 3 Billion a year ago was by far the biggest data application on the planet, over twice as big as total user base of the internet. When we now bring mobile to ever more poor parts of the planet - Afirica, Latin America, poor parts of Asia like India, Bangladesh, Sri Lanka, Pakistan etc - and the Middle East - SMS text messaging collides with illiteracy. I heard that last year at several stops at events from Egypt to Indonesia to Brazil, Mexico and Pakistan. That their usage levels of SMS text messaging is well below the global average levels in great part because parts of the population who have phones, are not literate.

There are two other factors. The growth in phone subscriptions of first-time phone owners in Europe are in the under 10 year old segment and the very elderly, retired people. Obviously many of them have phones, but I mean the first-time buyers who never had a mobile phone before are almost all under age 10 or over age 70. With under 10 year olds - often 5 and 6 year olds yes, 5 and 6 year olds - do not write yet (often). And the very elderly - often have issues with arthritis and weak eyesight and thus greatly prefer to talk on a phone than attempt to write or read messages. There are 'biological' reasons why some parts of the society do not embrace SMS text messages.

And then there is the issue of multiple subscriptions. Often among the affluent, when having two or more phones, they perform similar uses and use similar services on both phones and on both networks. So if you are reading this blog you probably have two phones, and you probably put messaging traffic on both of your subscriptions. But for poor people who have two or more subscriptions, they often get separate subscriptions for their comparative benefits. Then they often have one accoun for voice calls, another for text messages etc. In these cases, of the multiple subscriptions one will be used for SMS, the other explicitly will not. That is a growing trend with multiple subscriptions now that relatiovely poor countries like the Ukraine have over 150% mobile phone subscriptions per capita.

So what should it be. I am certain that the user base has grown strongly in SMS, especially in touch economic times. If the percentage of SMS users out of the total subscriber base remained the same, at 76%, we would have 3.5 Billion active users of SMS. That is almost certainly the 'floor' level of the user base. Note that it is an enormous number by itself. If the percentage of users of SMS grew, to 78% of all mobile phone subscriptions, then we'd be at 3.6B users. This to me is still very reasonable. At the top end, if we actually accelerated SMS user base to 80%, we'd arrive at nearly 3.7B users. This number to me is the absolute maximum as of December 31, 2009. I would love to believe it was more, but it can't be. The numbers do not add up. So thank you Portio for nice data, but your SMS user base number is way off - has an error of roughly 10% overcount. It may be - and this often happens in this industry - that this is perhaps if Portio does not accurately measure multiple subscriptions and multiple phone ownership. That could explain the error. But nonetheless, please do not use the 4B number it cannot be. I am confident the 3.6B number is close to real, please use that and you can reference the TomiAhonen Almanac 2010 as your source if you need a source.

Finally - about that literacy. Please support the 1Goal initiative to put every kid into school during this decade. We are nearing that goal - it will eliminate illiteracy in our lifetime. They are not asking for money, just your support and publicity to promote the 1Goal and everyone from Ban Ki Moon at the UN are supporting it, as do dozens of athletes, movie stars, celebrities, national political leaders worldwide etc. (and we support the 1Goal here at Communities Dominate). Please read this short blog Support 1Goal to put every child into school.

The video has had 15,000 viewings already? Wow…..

Tomi T Ahonen — Tue, 02 Feb 2010 17:39:47 +0000

I am totally stunned by the numbers. The video of my keynote presentation to the Picnic conference in Amsterdam, where I for the first time explained why the mobile industry will grow not from 4 billion to 6.8 billion users (ie the total planet) but rather will grow to 8 billion subscribers. As that presentation was given to an audience that was not purely mobile industry execs, I did a more general explanation of some of the dynamics, why mobile is a different mass medium - with comparisons to the legacy mass media including the PC based legacy internet; and then how the phone has evolved, and of course about our users. Then I discuss mobile in the developing world, with comparisons to the industrialized world. If you have not seen the video, you may enjoy it. Or perhaps send a colleague to go take a look. Here is the link Tomi at Picnic about the Next 4 Billion. but yes, 15,000 viewings. I am truly humbled. Thank you to all my fans and followers!

Do yourself a favor, watch this slideset: Mobile Trends 2020 (or watch it again)

Tomi T Ahonen — Mon, 01 Feb 2010 13:08:54 +0000

If you are reading our blog you are interested in mobile, or digital convergence, or media, or social networking. Mobile was important five years ago when we started, it is huge now. Digital convergence? All major tech brands now shift mobile to center stage witness Apple's iPad and Google's Android phones and Dell and other PC makers rushing to smartphones. Media? Mobile is now the newest (the 7th) mass media channel. Social networking? All social networks have announced an aggressive strategy headed to mobile starting with Facebook, YouTube, Flickr, Twitter and Wikipedia. So whatever your reason to visit our blog, mobile now in 2010 is more important to your career and interests than it has ever been.

So we do our bit of gazing into the crystal ball to guess the future. But as Alan Moore says, nobody is as clever as everybody. Wouldn't it be great to collect the very best minds on the planet whose full-time job focuses on mobile, and have their collected wisdom of what will happen in this decade? That was the brilliant brain-child of our dear friend Rudy de Waele of M-Trends. Rudy knows just about everybody and he invited them to contribute. Each expert was asked to give only five major trends for the next ten years. Each expert's view is then summarized onto one slide each. The slide set is Mobile Trends 2020.

This really is the who's who of mobile. Alan Moore is there of course. Most of the people we regularly mention on this blog are there, such as Russell Buckley, Ajit Jaokar, Howard Rheingold, Jonathan MacDonald, Tony Fish, Carlo Longino, CEO C Enrique Ortiz, and so many many more people we respect, read and refernce including Rudy's own prediction and yes, I am there too.

The slides are beautifully illustrated and as each expert has one slide where his or her five predictions are summarized, it is an easy slide set to go through. Yes, there is inevitably overlap, but that slide set has just about every relevant thought of any major trend for our industry, that can be foreseen at this point at the start of the new decade. Go read it now. If you have read it already, please go read it again. And bookmark the page, return to it in a few months. That slide set will guide you, your company, your business, your team, your projects and your career - more than any other single website or free resource anywhere.

If this pitch was not enough for you - the slide set has had over 36,000 viewings ! and was the most-viewed slide set for the month of January at Slideshare, I believe the biggest slide-sharing website on the web. Awesome, thanks Rudy on behalf of all of us who were invited to join, and congratulations for a fantastic achievement!

NOW ON MY FIVE PREDICTIONS

I cheated.. Seriously, I promised Rudy to get my predictions in but then it was the Christmas break and I forgot and while he kindly sent several reminders, I was too lazy to get mine in by the first deadline. So my predictions were not in the first edition of the slide set. But Rudy being the kind man that he is, he allowed me to submit mine even after the deadline. And that did allow me to 'cheat' by reading the predicitons of those who had already submitted theirs.

First, I would not disagree to a meanigful degree with any of the experts in the set. In some cases out of five forecasts for a given expert I might disagree with one perhaps, or more likely with the 'degree' of the forecast (maybe it happens earlier or later etc). But I wanted to be able to add to the overall slide set. So there are some forecasts I think are very important but they are already well represented, mentioned by several of the experts, and I wanted therefore to 'add value' to the slide set and selected my forecasts based on that. So yes, I cheated. I tried to 'add to the insights' rather than blindly submit my 5 most relevant forecasts haha.. But you know I did this with the best of intentions and with that in mind, here are my five trends and a bit more on my reasoning why I said so:

SHRINKING SUPERPHONE REACHES 10 DOLLAR COST

This is perhaps the 'easiest' forecast but I think the point was not clear enough in other forecasts. The amazing shrinking phone. Moore's Law tells us that a smartphone of today is as powerful as a laptop 5 years ago, high end desktop 10 years ago, mainframe computer 15 years ago and supercomputer 20 years ago. So the evolution of the smartphone will give us devices in 2020 which are as powerful as a supercomputer from the year 2000. Think about that for a moment. In our pockets, we'll have two such devices, and then we'll be handing them to our kids as hand-me-downs as we get ever more poweful phones. At the same time we get the diminishing price. The 'phone' form factor 'basic' device will be far more capable than todays' top phones and those will cost no more than ten dollars. Meanwhile the 'smartphone' top end devices will be embedded into us in our teeth or under our skin etc.

MOBILE ADVERTISING BECOMES BIGGEST AD PLATFORM

There were many who mentioned mobile marketing and advertising. I don't think anyone else had made this poweful a claim, that by 2020 mobile will have grown past not only internet advertising but print and even TV advertising to become the biggest ad medium by revenues. As mobile advertising today accounts for only 1 percent of all advertising, that is a tall order, but I am confident when we revisit my forecasts in 2020, this will turn out to have become true. If this sounds outrageous to you, please remember that I have had an uncanny accuracy for my long-term forecasts, especially those that were contrarian or unconventional views. I am 100% certain this will happen and very confident we will hit that point before the end of 2020. If not, it will be only a few years after that point.

HALF OF TOTAL ECONOMY IN SOME COUNTRIES TRANSITS THE PHONE

Salaries, mortgage payments, taxes, corporate and government purchases, cars, houses, utility bills, etc. Seem far-fetched? Except that in some countries this is starting to happen already. In two years, 46% of all banking accounts in Kenya had shifted to mobile banking. In South Korea more than half of the population regularly use at least one of the five mobile payments solutions. The point to my forecast is that this will happen in 'some countries' and those will not be the UK or Germany or the USA etc. Those countries will mostly be in the emerging world and countries where the domestic banking industry is not very advanced. So Kenya, Nigeria, Bangladesh, Philippines, India, South Africa etc. We do have a long way to go, for even if your salary comes to a phone in say Kenya today, then probably you are not earning much - more afflient Kenyans have 'real' banking accounts and mostly only the poorer members of society have mobile banking accounts. So while soon half of Kenyans will have a mobile banking account, they will not move anywhere near half of the total economy through their accounts. Yet as the economy learns of the power of mobile, the transitions can be fast. Public utilities will give a 5% discount to m-payments in India for example, and Estonia became the first country to have a specific use of money that eliminated cash and only accepts mobile payments - for parking fees. It is a long journey but I am confident there will be several countries where half of the economy will transit mobile payment systems, by 2020.

STAR TREK 'UNIVERSAL TRANSLATOR" COMMONPLACE

This is not that big necessarily as a global 'industry' but I am very hopeful that many international issues can be resolved with better communications. If we can talk to our neighbors, we will get to know them better. We can do more business with our neighbors, visit them and engage with them. That in turn should reduce wars, distrust and violence between peoples. So while a smaller 'benefit' this is becoming technically possible already today in some languages (at a crude level text-to-text and voice-to-voice) and well before the decade is done, each phone can do instant translation of any language to any language. Will be very useful for us whose work involved international travel.

OUR PHONE BECOMES MAGICAL SERVANT AS CONSIERGE

This to me is the most exciting prediction. It is also the most difficult to explain. But imagine if you had permanently in your presense a super highly trained and paid secretary or 'personal assistant'. The real person would answer your calls and your messages and like a very highly paid and professional secretary, would know how you want each call and message handled, and would anticipate your needs, warn you of upcoming birthdays, anniversaries; remind you about names and occasions; perfectly remember who was allegic to what food and who liked what kind of restaurants when you need to book a place where to dine; buy the 'right' gifts for your nephews and nieces, etc etc etc. And the secretary would be totally discreet - would never accidentially reveal any secrets say about your health of wealth or whatever even if you happen to gamble or have a sex addiction or drug addiction etc. A total, loyal, discreet and 'perfect' assistant. Available with you 24 hours a day.

Now, unless you're a multimillionaire, you cannot afford such a personal 'servant' but now think of Amazon and Google. Amazon will 'anticipate' your needs in books, movies and music. It will give recommendations to you based on your personal tastes (based on what you have bought or looked at, and then by their algorithm they measure from their total customer base exactly what to recommend to you). It is like magic, that Amazon is reading our minds. And we love it. Also think of Google search. Magical. Fifteen years ago if you wanted to find out how many mobile phone subscribers there are on the planet, you had to order a 2,000 dollar report from a big industrial analyst house. Today you Google it and find a free reference of totally updated numbers at for example this blogsite...

Now imagine the 'anticipation' of Amazon with the 'power' of Google and then add 3G - 4G - 5G telecoms networking speeds and super-hyper-smartphone power. It will be 'easy' to have a digital assistant, as an avatar on our phone, to be not only our secretary - yes, answering our phones like a real secretary - but also our 'consierge' - I 'really' want to have two tickets to tonight's game or concert, a good hotel consierge will be able to get them for you - at a price. So too will our pocket assistant. And the assistant will be our accountant, handling our money - do you have to submit expense claims to your employer? Don't you hate it. Wouldn't you love it if 'someone' would do them 'automatically' and all you need to do is to review them and sign the form and submiut. Magical! and the lawyer while we are at it. How many times did you think - 'are they allowed to do that' - well, now your pocket consierge/assistant/secretary/attorney - will actually pro-actively inform you whenever your rights are abused - and then asssit you with contracts etc. The 'magical' assistant. We will have it as a premium feature on our phones by the end of the decade. A very rudimentary version already exists in Japan and users totally love it.

Those were my five forecasts. Thank you Rudy for selecting the Rosetta Stone as the backdrop for my slde, awesome, my history teacher would be so proud haha.. For you the reader on this blog - please do yourself that favor, go read through those 62 slides. Its a fast read but the most insightful and useful slide set you will read this year, I promise you.

Mobile Phone Market Shares for year of 2009 and last quarter 2009

Tomi T Ahonen — Mon, 01 Feb 2010 01:34:19 +0000

As we head into the bloodbath of 2010.. So the final numbers are out for the 5 biggest handset makers for 2009 and for several smaller players as well. Some manufacturers like RIM (Blackberry) and ZTE report their quarters on 'odd' months ie they do not end their quarter in March/June/October/December, so with them we still have to wait a bit to know for sure, but the big picture is now clear. We know the full numbers for the full year 2009. And there have been changes. (Poor Motorola)

In order of size. Nokia did not suffer a 'Motorola moment' last year and as we've patiently explained at this blog, the market for mobile phones (and smartphones) is not 'fair' and 'open' and does not work with the same rules as say the PC market or the home electronics market. If you want to read the full explanation, hope over here but do pack a lunch, its a long blog story (Smartphone Realism part 2)

ALL HANDSET MAKERS TOP 10

1 - Nokia . . . . . . .   432 Million 38 %
2 - Samsung . . . .    227 Million 20 %
3 - LG . . . . . . . . . . 117 Million 10 %
4 - SonyEricsson . . . 57 Million 5 %
5 - Motorola . . . . . . . 55 Million 5 %
6 - ZTE . . . . . . . . . . 50 Million 4.5%
7 - Kyocera . . . . . . . 45 Million    4 %
8 - RIM . . . . . . . . . 35 Million    3.5%
9 - Sharp . . . . . . . .  29 Million    2.6 %
10 - Apple . . . . . . . . 25 Million    2.2 %
Others . . . . . . . . . . 56 Million    5%
TOTAL . . . . . . . . 1,130 Million (1.13 Billion)

So yes, lets review the year 2009 in mobile phone sales by market size. First we have of course Nokia. During the year many wrote all sorts of dribble about Nokia in trouble. But the big picture is quite clear. Nokia ended the full year selling 432 million mobile phones with a market share of 38%. And of its rivals, Nokia is now as big as the next three biggest handset makers all put together. And while two of its top 5 rivals reported losses in their handset divisions last year, Nokia ended the decade with a perfect record - the only one of the top 5 that reported consistent profits in its handset division every single quarter of the decade. Impressive results. Meanwhile, how did the year end? On a high note - Nokia's fourth quarter market share was 39%.

Then comes second place Samsung. Samsung grew strongly in the year and sold 227 million handsets for a market share of 20%. That reflected a solid growth in market share from 16% in 2008. Samsung also reported consistent profits for the year. And Samsung ended its year with a high where its fourth quarter market share was 21% also one percent better than the average for the year, like Nokia.

In third place we have LG. A year ago LG was neck-to-neck within a percentage point slightly ahead of Motorola and SonyEricsson. Now LG has cleared the two older rivals and stands alone at the 10% market share level selling 118 million handsets. LG also was profitable in its handset unit every quarter but the fourth quarter was not very promising, as LG's market share for the last quarter was the same 10% as it had for the year. Thus LG made gains early in the year but its growth seems to have stalled somewhat toward the end of the year.

Next we have SonyEricsson, which with sales of 57 million handsets for the year has overhauled Motorola and taken fourth place, SonyEricsson has not been profitable for the year. The bad news is that a year ago their market share was better than 8% now it is 5% for the year. SonyEricsson has been going backwards and doing it unprofitably. The worse news is that their market share for the fourth quarter was only 4.5%, so they are still shrinking in market share. But the silver lining is, that once again SonyEricsson is (at least briefly) the fourth biggest handset maker on the planet. At least when measured for the full year. Still its not really good news when the company just ahead of them - number 3 LG - sells twice as many phones, and number two (Samsung) sells four times as many and market leader Nokia sells over 7 times as many phones as SonyEricsson. Still. they are now technically the fourth biggest handset maker and they may perhaps even hold onto that position. But the sounds from China are not good for SE.

Fifth place in annual sales of handsets is (probably) Motorola with 55 million handsets. The reason I say 'probably' is because we do not have final numbers from ZTE, but my modelling suggests the lead Moto had over ZTE for the full year was too much and ZTE will still end up 6th biggest. But we will have to see when ZTE reports. However, the news is all bad for Moto. A year ago they had 8% market share, now they have under 5%. That is bad news. They made losses in the handset division every quarter, which is of course also very bad news. But their fourth quarter was so miserable, their market share had slipped to 3.7%. In the fourth quarter they have definitely fallen behind ZTE and for the quarter were for the first time in the company's history not even in the top 5 biggest handset makers globally. In absolute numbers Motorola lost 45% of their sales in one year, while ZTE grew 30%. I think we can see rather clearly how this will end up in 2010 for the full year.. And while Motorola had its 3.7% market share of handsets sold in the fourth quarter, they have one more indignity heading their way soon - RIM out of Canada had a quarterly market share in the fourth quarter of about 3.5% (again, we don't have RIM final numbers until their next fiscal quarter ends). RIM are so close, within a couple of tenths of a percent, to catch up and pass Motorola. At that point Moto will no longer even be the biggest handset maker of North America. That is likely to happen in the first or second quarter of 2010 by current trends.

Sixth place is ZTE. I am modelling ZTE to have shipped 50 million handsets for the year give or take a million. That gives them 4.5% for the full year 2009. ZTE is benefitting strongly from the enormous growth in the Chinese domestic market where it has gained now a leadership position among the domestic Chinese handset makers. And they have offered often very low cost handsets to the rest of the world. For the fourth quarter ZTE is definitely outselling Motorola and if they have been very successful, they may even have outsold SonyEricsson for the Christmas sales quarter, but I am modelling them to have fallen a little behind SonyEricsson for the quarter.

Kyocera comes in seventh place. Kyocera has been struggling as the CDMA networks are diminishing in scope and relative subscriber base and Kyocera's strong suit is shrinking. They shut down their Chinese factory for example as they no longer had the demand out of China. I have Kyocera at 45 million handsets and 4% global market share.

Eighth place sees RIM (better known for its Blackberry brand) with 35 million handsets sold for the year. That gives them a market share for the full year of 3.1%. RIM has been growing strongly and their fourth quarter will come out at about 3.5% market share (Like ZTE, RIM reports at a later point in time). RIM should be celebrated also as the biggest pure smartphone maker so all of their handsets were smartphones. While that does not mean they were the biggest smartphone maker per se (Nokia is) but RIM leads the pack of those handset makers who do not make traditional basic and 'feature phone' type of phones.

In Ninth place we have Sharp, which primarily focuses on the Japanese domestic market (sells only 20% of its phones outside of Japan) and sold about 29 million phones last year for 2.6% market share.

And in tenth place for the first time passing the impressive two percent market share level annually, is the youngest handset maker, Apple, who sold 25 million iPhones last year for a global market share of 2.2%

Thats our top 10 in handsets and out of the 1.13 billion handsets sold in 2009 (the industry shrunk 5% in total handset sales from 2008), these ten makers account for 95% of all handsets sold on the planet.

SMARTPHONES

1 - Nokia . . . . 68 Million    39%
2 - RIM . . . . . 35 Million    20%
3 - Apple . . . . 25 Milllion    15%
4 - HTC . . . . . 8 Million    5%
5 - Others . . . 35 Million    21%
Total . . . . . . 175 Million

And then what of smartphones? Its really a battle only of 3 players, Nokia the giant challenged by RIM and Apple. For all that hype last year about Google for example, their sales are still modest even among smartphones and such former major players as Windows Mobile and Palm are all but vanishing from the scene. So lets take them by size. I am modelling the year at 175 million total smartphones sold, it may be up or down a million or two when the final numbers are done.

First again we have Nokia. They sold 68 million smartphones in 2009 and end the year with an annual market share of 39%. They are one percentage point shy of being as big as the next three smartphones makers put together. A true giant. And as I keep reminding, Nokia's market share in smartphones is better than their market share in phones overall. And Nokia's fourth quarter? at 40% they ended the year on a strong note.

Then we have the world's second largest smartphone maker, often in the shadow of Apple's big PR blitz, but RIM of Canada with its Blackberry have grown from 16% a year ago to 20% for the full year 2009. They sold about 35 million smartphones for the full year. And the fourth quarter? I am projecting RIM to reach 22% for the Christmas quarter (but their quarterly results won't be out until later in the Spring). It is clear RIM has grown more, it is only not sure how much more.

Third place goes to Apple who grew very strong from 7% of all smartphones sold in 2008 to 15% for the year 2009. Very impressive growth. However, Apple's sales cycle is peculiar due to their strategy of releasing only one phone model per year, and that strategy may now have reached their peak, as their market share from the third (calendar) quarter to the Christmas quarter held steady at 17%. It is certain that Apple's market share will decline in the January-March quarter as it always does as its model range seems outdated compared to rivals and now we may see Apple forced to re-think its one-model-per-year strategy to get more growth. For the full year Apple achieved 15% and for the Christmas quarter they did better at 17%. Now don't be shocked when the January quarter market share 'crashes' for the iPhone - that is the normal pattern for Apple. For the full year they sold 25 million iPhones which is a respectable number and they are very strongly entrenched as the third biggest smartphone maker, far bigger than their fourth place rival HTC - in fact three times as large as HTC.

Yes, in fourth place is Taiwanese HTC (best known now as the manufacturer of Google's Nexus One). HTC sold 8 million smartphones and command a market share of 5%.

The rest of the world is full of very small smartphone makers. Motorola, Samsung, LG each sell in the couple of million range. As do many others like ZTE, Fujitsu, Kyocera, Sharp, Panasonic, Sendo, Huawei, etc. If you want to find Palm, they sold about 3 million smartphones so their market share in nsmartphones was about 2% and in all phones about one quarter of one percent (0.26%).

SMARTPHONE OPERATING SYSTEMS

1 - Symbian . . . . . . . 45%
2 - RIM . . . . . . . . . . . 20%
3 - Apple . . . . . . . . . 15%
4 - Windows Mobile . . 6%
5 - Google Android . . . 4%
Others . . . . . . . . . . . 10%

Finally about the operating systems. Here we do not have enough data yet to give full numbers for the year, but this is my best guess at this stage (in many cases one handset maker offers smartphones on several operating systems, like Samsung which offers smartphones on Symbian, Windows Mobile and Google Android). But the big picture is clear and the rankings are clear. Their exact final market share may still need to be adjusted.

Symbian is the obvious global giant, with about 45% market share. The vast majority of those are Nokia branded smartphones but there are many others who make Symbian phones from SonyEricsson and Samsung to Fujitsu. Also do bear in mind that now it is no longer true that every Nokia smartphone is on Symbian, as Nokia introduced its top end smartphone OS, the Linux based open source Maemo. Maemo has currently far less than one percent market share.

RIM ie Blackberry is the second largest smartphone OS by market share in 2009 with 20%.

Apple's iPhone OS/X has 15% market share. It should be noted that the Apple iPod Touch has the same OS, so from a developer point of view, the actual installed base of iPhone OS devices is larger, and while Apple does not provide the exact breakdown, it is estimated that iPod Touch devices sell about 50% of the level of hte iPhone. It is not appropriate to count non-phones (like iPod Touch) to smartphone market shares, as the device is more like a stand-alone PDA or media player, but one needs to remember that they do exist and form a meaningful number in particular for any applications that are sold.

Windows Mobile totally crashed last year and across a dozen manufacturers achieved a cumulative market share of about 6%. Just four years ago they had more than a quarter of the total market. They are marginally bigger than Android but about to be overtaken.

Google's Android is the most difficult to measure at this stage as so many of the handsets were by smaller makers or added to a mix, but I am projecting Android at 4% of the total year sales. I will be monitoring the reports that may add some detail to especially some of the smaller players in this field. It should be noted that Android the Linux based open source OS is growing very fast with dozens of devices released and many more in the pipeline by many manufacturers.

Palm OS has about 2% of the smartphone market share in sales of new smartphones last year and are becoming totally marginalized, being relevant barely only in the US market.

Bada is the new OS by Samsung but has no devices out yet so its market share is zero.

Then there are the others totalling 8%. This includes mostly various Linux Mobile based smartphone OS's which have a small market share, in particular in Japan.

So there you are, the mobile phone market situation at the start of the new decade, January 2010. We sold 1.13 billion new mobile phones last year and 175 million or 15% of them were smartphones. If you want to quote the numbers all of the above is analysis by TomiAhonen Consulting and the data is from the TomiAhonen Almanac 2010 (to be released shortly), based on company data and public sources.

And if you want to read my preview of the smartphone wars for this year 2010, that essay is at this link: Tomi Ahonen predicts bloodbath in smartphones 2010.

Gartner measures all apps of apps stores worth 4.2B dollars in 2009

Tomi T Ahonen — Fri, 29 Jan 2010 00:44:02 +0000

We were waiting to see the numbers by the major analyst houses for total sales of apps at app stores for 2009. Gartner has new reported the number at 4.2 Billion dollars for 2009 which is far mroe than what was originally reported for 2009. The news was reported at Fierce Mobile. To me this number seems a bit high - if Apple's is the bestselling App Store currently and they delivered something like 2 billion apps for 2009 and most of those were free. So we may find other research houses with more 'conservative' numbers for apps sold in 2009, but yes, Gartner has now given us a number of global sales that we can use as our first reference point. Do bear in mind that just non-messaging service revenues on mobile were over 80 billion dollars in 2009 so services exceed apps by a factor of roughly 20 to 1... Still, 4.2 billion dollars is a nice big number. Its almost as big as basic ringing tone sales in mobile haha...