location based services
Spotted a telling statistic by Ipsos Research, who reported that at the end of 2005 a total of 28% of all mobile phone users access the internet with their phones. Across the 2.1 billion mobile phone users, that works out to 588 million users. And obviously across the 1 billion internet users at the end of 2005, that means that almost 59% of internet users access the web via cellphone.
First very significant point to keep in mind, is that a large portion of those users have also a PC (desktop or laptop) and access the web also with their PC. Earlier numbers had revealed that of paid subscribers to the internet, 25% was by mobile phone or in other words, 250 million people use the mobile phone as their primary (or only) method to access the web.
So to explain - 250 million access only by mobile phone. 412 million access only by PC (desktop or laptop). And thus 338 million use both PC and mobile phone for web access.
So far so good. Now lets observe the trends. PC based internet access is a little over 12 years old as a mass market proposition and in 2005 PC based internet access growth was dramatically slowing down. Mobile phone based internet access is only six years old and showing remarkable growth. With new smartphones, colour screens, faster access speeds of 2.5G and 3G, and web services customized for the fourth screen, mobile phone based internet is becoming a very compelling offering.
Growth of the PC based internet is slowing down. Growth of the mobile phone based internet is accelerating. Only 41% of all internet access is by people who only access by PC. Already 25% of all internet access is only by mobile phone. Soon more people will access by mobile than PC. How soon? By 2008.
What will this mean to the internet industry? The mobile phone can replicate all services that the traditional PC based internet can do. Yes, the screen is smaller, but that is no absolute obstacle. But everything else we had on the web, including its interactivity, is also available on the mobile phone.
But an internet on the mobile phone delivers four elements that don't exist on the fixed internet. First of all, a mobile phone based internet is totally personalized. Our PC is often shared - such as a university campus computer, or a family computer, or the PC owned by the employer with its limitations and at times access by the IT department etc. But our mobile phone is totally personal.
Secondly the mobile phone is always on. It means that any alerts, urgent news etc can be delivered. With laptops we need to find our access, connect to a WiFi etc network, but mobile phones are always connected and can for example be reached via SMS text messaging for alerts at any time.
Thirdly the mobile phone is always within hand's reach of its users. No other technology is so close to us physically at all times. We don't take our computers to bed with us (well, most don't do that), but over 60% of all mobile phone users take their cellphone physically to bed with them at night. We notice we've lost our wallet in 26 hours. But we notice we're missing our mobile phone in 68 minutes.
Finally - and most importantly - the mobile phone offers a built-in payment mechanism. The PC based internet does not have that. On the traditional internet we need to set up a payment system like Paypal, or we need to submit credit card info etc. But on the mobile phone we can (if our carrier/operator has enabled it) handle any payments at the click of a button.
And for anyone who thinks the lower cost new PCs might reverse the trend. No that won't happen. PCs are paid full price. But in most markets mobile phones are subsidised. While PCs are replaced every 3.5 years, mobile phones are replaced every 21 months. In markets where people have two phones - 20% of Europeans have two phones already - that results in an effective replacement rate of 11.5 months for mobile phones. A new phone every year but a new PC once every four years. The mobile phone is subsidised and nearly "free" while the new laptop still costs something near 1000 dollars. How many times will we bother to replace the laptop, especially when our mobile phone suddenly can do all the internet stuff that we previously needed a PC for?
So returning to my question. What happens when the majority of internet access is done with a mobile phone? It will not take long for the Amazons, Ebays, Googles, AOLs and Yahoos to discover that their users are more accessing via mobile phone than via PC. They will adjust their content to work on the phone and optimize for the small screen rather than for the PC screen.
Sound implausible? Think again. Only 14 years ago the majority of internet access devices were mainframe computers. At that time the web content standard was something called "Gopher". Today nobody formats for Gopher because the internet PC browsers (first was Mosaic, then Netscape, now Microsoft's Internet Explorer) became the predominant access devices.
That is bound to change. The trends are irreversible. The sooner you understand this coming change, the more you can capitalize on this transition both personally, and professionally. Spot the trends now, and be one of the early visionaries to this inevitable future.
Oh, and if you work for a content provider, consider these facts: There are three times as many mobile phones as PCs. Twice as many people use SMS text messaging as use e-mail. Users on the traditional PC based internet expect content to be free, but mobile phone users expect mobile content to be paid-for. Collecting money on the traditional fixed wireline internet is very cumbersome. Collecting money on the mobile internet is built-in. The world's biggest internet company by revenues is not one of the internet darlings - Google, Yahoo, eBay, Amazon or AOL. It is Japanese mobile operator NTT DoCoMo's domestic mobile internet arm, i-Mode. And i-Mode alone makes bigger profits than the five internet darlings combined. Where will you put your best content? On the mobile internet of course.
Then consider the premise of my posting. If the majority of the users are on the mobile internet. And the best content is on the mobile internet. Shouldn't YOU be on the mobile internet?
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