Home > Uncategorized > Smartphone consumer and business trends in 2014

Smartphone consumer and business trends in 2014

 

AMphonebehaviours

In this post we’ll be looking at how mobile trends are effecting customers, network operators and handset manufacturers. Last week, Analysys Mason reported “[t]he average amount of time that consumers spend using smartphones per day almost doubled between 2011 and 2013, from 98 minutes to 195 minutes”. The time spent actually communicating with other human beings has increased during this period, but only with overall growth in use. As a relative share of what other things consumers do with their smartphones, communication has actually fallen (see above image), from a 49% to 25% share. Retailers will be very happy to see that the “utilities and commerce” share seems to have grown considerably.

72% of those that Analysys Mason surveyed across the UK, US, France and Germany were said to be using OTT messaging services on their phone. These over the top services are posing a real threat to traditional operators. One particular example that caught Zeitgeist’s attention was that of FreedomPop in the US, a virtual network operator that uses Sprint’s network to piggyback off. According to GigaOm, the company has launched an iOS app, that assigns you a unique telephone number and allows you to run all your communications through a “virtual phone”, circumventing the carrier. The answer for carriers may be in bundling services, and indeed BT and Vodafone seem to leaning toward this as a tactic. But a Lex column article in the Financial Times warns that although bundling services into a quad-play offer can increase retention, it usually means offering those same services at a discount.

Cheap smartphones are nothing new in of themselves; competitors to Samsung and Apple have been scrounging away at the bottom of the market for some years now, and it was way back in 2012 at the Mobile World Congress that Mozilla announced it would make a cheap handset for developing economies. What has changed recently is the explosive growth at this end of the market. By 2018, more handsets will have been shipped that sell for under $200 than those that sell above that amount (see chart below), according to IDC and The Economist, who wrote about it recently. As the paper pointed out,

People buying their first smartphones today, perhaps to replace a basic handset, care less about the brand and more about price than the richer, keener types of a few years ago. They are likely to pay less for a nice new smartphone than they did for their shabby old device, because the cost of making smartphones has tumbled.

Part of the problem for incumbents is that they have had to do all the R&D, which new entrants can learn from and improve on without worrying about such fixed costs. For consumers though, with fragmentation at both ends of the market, the choice and price of smartphones has never been better.

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  1. Scotty G
    July 24, 2014 at 1:18 am

    Think you could make your text any smaller? It’s very hard to read and annoying.

    • davidllewelynjones
      July 24, 2014 at 8:02 am

      Try changing your browser settings!

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