MobileMetricsThatMatter: Ten Data Points That Will Define the Next Wave of the New Mobile Economy Rich Karpinski Senior Analyst, Yankee Group Carl Howe Vice President, Yankee Group Nov. 5, 2013 Page 1 Copyright 2013
About Yankee Group Data Sciences Yankee Group s Data Sciences team publishes roughly 8.5 million data points each quarter 989,000 monitor data points for 149 mobile operators and 11 mobile device manufacturers in 60 countries More than 7 million survey data points 495,000 forecast data points for 60 countries around the world for the years 2007 through 2017 Our mission is to give clients the best facts, insights, and implications with which to run their businesses Yankee Group publishes more data about the mobile economy than any other market research firm: roughly 34 million data points annually Page 2 Copyright 2013
Three Products Combine To Paint a Global Data Portrait of the Mobile Economy Page 3 Copyright 2013
#1 The $3 Trillion New Mobile Economy Opportunity Page 4 Copyright 2013
Defining the New Mobile Economy The New Mobile Economy will nearly TRIPLEin size by 2017 The combination of mobile services, device, apps/cloud and marketing/commerce revenue will reach $3.1 trillion by 2017, according to Yankee Group forecasts. Page 5 Copyright 2013
What s Changed Since our Last New Mobile Economy Forecast Two Years Ago? Relatively mature mobile broadband market stays steady Mobile device forecast grows global strength/tablets Apps and cloud forecast shrinks monetization challenges Mobile Money focus broadens to Mobile Marketing and Commerce Page 6 Copyright 2013
#2 Entering the Land of Very Big Numbers Page 7 Copyright 2013
Smartphone Sales and Usage Soar Annual smartphone sales cross 1 billion mark in 2014 Smartphones in use grows 12x 2009: 239 million 2017: 3 Billion The number of smartphones in use globally will increase more than 12 fold from 2009 to 2017, with more than half of that growth concentrated in the Asia-Pacific region. Page 8 Copyright 2013
Mobile Services: Billions of Connections and Trillions in Revenues 7 billion Mobile Lines $1 trillion in mobile services Mobile operators have been challenged by the mobile revolution, but the opportunities are massive this year crossing the 7-billion-connection and $1-trillion-revenue marks. Page 9 Copyright 2013
Leading to Mobile Line Penetration Above 100 Percent Worldwide mobile penetration crosses 100 percent this year U.S. is already over 100 percent Globally, mobile penetration (by line) will cross the 100 percent mark this year. Page 10 Copyright 2013
Not to Mention Internet of Things and machine-to-machine Connections Almost half a billion M2M modules by 2017 M2M growing at 20 percent CAGR Connections are not all about people. Yankee Group forecasts a steady rise in M2M module deployments -- driving growth more than double that of mobile data services. Page 11 Copyright 2013
#3 Nearing a Time of Very Fast Speed Page 12 Copyright 2013
LTE Has Arrived U.S leads the way in 4G and LTE with APAC, others gaining ground The U.S. leads the world in LTE, with the Big Four operators deep into LTE deployment and preparing for LTE-Advanced, which means more speed and greater flexibility. Page 13 Copyright 2013
#4 A Shifting Operator Monetization Landscape Page 14 Copyright 2013
US Data Market Will Soon Exceed Voice Successful data monetization keeps U.S. voice + data growth positive The U.S. will soon reach a landmark milestone, with data revenues exceeding voice revenues for the first time. Page 15 Copyright 2013
Europe Struggles To Keep Crossover Pace European data business grows, but not as quickly as voice and messaging is shrinking Other markets such as Western Europe are seeing a similar transition, but data gains aren t occurring fast enough to counter voice losses. Page 16 Copyright 2013
#5 A Cycle of Ever Better, Bigger, More Capable Devices Page 17 Copyright 2013
Smartphone Screen Sizes Are Growing Bigger devices tablets, yes, but phablets as well lead to a better mobile experience Device makers are launching bigger smartphones, but the vast majority of smartphone sales are devices that remain 4 inches and smaller. Page 18 Copyright 2013
Tablets Have Emerged as Crucial (Second, Third or Fourth) Screen The market is in the sweet spot of tablet hardware growth and entering the growth curve for connected tablets We are entering the heart of the post-pc market with tablets and even large-screen smartphones becoming many users primary computing device. Page 19 Copyright 2013
#6 Consumers Are Ready and Willing To Participate in the New Mobile Economy with Caveats Page 20 Copyright 2013
Mobile Commerce Awareness Is High Caveat: mobile commerce can t bring added costs with it. Consumers like the idea of mobile commerce, even if all the individual pieces mobile wallets, payments, POS, local search, etc are still evolving. Page 21 Copyright 2013
But There Is Still Significant Traction To Overcome in Key Sectors ie, Mobile Payments Just 14 percent of respondents have actually used a mobile wallet. Massive mobile payment disconnect: high interest, low adoption. Mobile wallets compelling as concept but in reality a shiny veneer credit card in different form factor. Page 22 Copyright 2013
But Looking More Closely, You Can See How Mobile Disrupts the Retail Status Quo 45 percent of users showroom and use that information to find lower prices. While mobile hasn t yet changed the way most people pay, it s undoubtedly changing the way in which we shop retailers must embrace the mobile shopper. Page 23 Copyright 2013
#7 Mobile Apps Show Few Signs of Slowing Page 24 Copyright 2013
Mobile App Usage Continues to Grow The mobile app market, while mature, still has room to grow in terms of users and revenue. Both app store revenue and the number of app users continues to expand on a global basis Page 25 Copyright 2013
Significant Third App Ecosystem Yet To Emerge Google + Apple account for 60% of paid apps & 70% of free apps. Blackberry in flux, Windows push continues, Amazon becomes significant, wild cards such as Firefox (not yet on radar) emerge. But Google and Apple dominate. Page 26 Copyright 2013
App Story Evolves: Native vs. HTML5 vs. Hybrid Tools and capabilities that enable write once, run anywhere are emerging as key mobile app requirement. Native continues to be the predominate mobile application development style but companies are looking to ease their workload. Page 27 Copyright 2013
#8 Games, Social Media Dominate Consumer Apps Page 28 Copyright 2013
When it Comes to Making Money Games Dominate Games generate 75% of mobile app revenue today. Consumers are most willing to pay for mobile games, with productivity apps taking a distant second spot in terms of mobile app revenue. Page 29 Copyright 2013
Social Media Today, Mobile Video Tomorrow? Mobile/tablet usage of social media is catching up to the desktop Short form video dominates mobile video usage so far On-the-go social media usage is a major smartphone application, while restrictive mobile data pricing has limited mobile video usage. Page 30 Copyright 2013
Consumers and Employees Equally Rely on Mobile Apps Many consumers regularly download/ experience new apps. Employees use (non work-related) apps while at work. Yankee Group tracks both downloads/usage and time spent with mobile apps both are on the rise, for consumers and employees. Page 31 Copyright 2013
#9 Enterprise Mobility Manages Rapid-Fire Change Page 32 Copyright 2013
The Mobile Workforce Cascades Downwards and Outwards Mobile workers used to be in-the-field specialists now they are pros-on-the-go. Professionals office workers, managers, employees make up more than half of the mobile workforce today. Page 33 Base: Asked everybody, Yankee Group IT Decision-Maker Survey Copyright 2013
More Than Half of Employees Use/Are Interested in Using Consumer Applications for Work In 2012, 58% of all companies supported consumerization Yankee Group conducts annual Enterprise Mobility Outlooks. Majortrend: employees act like consumers and want to be in control of their own deviceand application usage. Page 34 Copyright 2013
Tremendous Investment in Mobile App Creation Just 4% of enterprises ranked mobile apps as a low priority In terms of dollars, time and effort, 70 percent of enterprises ranked their investment in mobile apps as a high priority in terms of overall IT spend. Page 35 Copyright 2013
#10 Mobile Milestones and Opportunities Page 36 Copyright 2013
Takeaways: Key Milestones as We Head into 2014 The New Mobile Economy will be a more than $3 trillionopportunityby 2017. Annual global smartphone sales will near the $1 billion mark this year. By 2017, there will be more than 3 billion smartphonesin use globally. By next year, the global mobile operator services market will surpass 7 billion lines and $1 trillion in revenue. This year, global mobile line penetration will exceed 100 percent. Almost half a billion M2M moduleswill be in use by 2017. Page 37 Copyright 2013
How to Tap the Regular Cadence of Yankee Group Data Mobile Now Newsletter Daily newsletter with generous doses of YG data More ways to consume YG data in 2014 as client or our guest Quarterly Mobile Metrics That Matter Yankee Group Mobile Leadership Strategies Reports and/or Webinars Data points available for download to drive your slideware and business cases Upcoming: Q1 2014: Mobile Ecosystem Metrics Q2 2014: Business Model Innovation Metrics Q3 2014: Mobile Leadership Market Vision Q4 2014: New Mobile Economy Metrics Page 38 Copyright 2013
Thank You! Rich Karpinski Senior Analyst @richkarpinski rkarpinski@yankeegroup.com Carl Howe Vice President @cdhowe chowe@yankeegroup.com Read our insights and sign up for our newsletter at maps.yankeegroup.com Like us on Facebook facebook.com/yankeegroup Read Updates on LinkedIn linkedin.com/company/ yankee-group Follow us on Twitter @YankeeGroup Read our blogs at blogs.yankeegroup.com Page 39 Copyright 2013