2.7 billion mobile users in context

~ 19 January 2007 ~

Every so often an article comes along worthy of a good sit-down read, a print and staple, or a bookmark entry.

Tomi Ahonen’s “Putting 2.7 billion in context: Mobile phone users” is not only all of the above, but I’d consider it required reading for anyone considering a foray into mobile content, especially fence-sitters unsure about making the leap.

Ahonen’s lengthy but discerning article compares mobile phone penetration to that of the car, the telephone, the TV, and other forms of ubiquitous technology:

Now we have context. 800 million cars, 850 million personal computers, 1.3 billion fixed landline phones, 1.4 billion credit cards, 1.5 billion TV sets. How many mobile phones in use today? In use today, yes, 2.7 billion…. Three times as many mobile phones as automobiles or personal computers. About twice as many mobile phone owners as those of fixed landline phones or credit cards. And almost twice as many mobile phones in use as TV sets.

Of course, many of those 2.7 billion subscribers access internet content on their devices, and web usage is rising:

During 2007 the first cross-over will happen, with more users accessing [the internet] via phone than PC. Fascinating data coming on that usage as well, the Japanese regulator reports that those who access the web via mobile phone do so more frequently than those who access via a PC.

So important is mobile penetration and revenues thereof for the companies, organizations, and governments involved that regions such as Africa are

…in a hurry to increase phone penetration after the OECD study found that increasing mobile phone penetration results in the greatest benefit to the GDP of an emerging country. Better benefit than providing computers, electricity, roads etc. You don’t need a literate population to have benefits from phones, but you do need literacy for personal computers.

For some of you, this all comes as preaching to the choir. But for the rest of you, I echo Ahonen’s closing remarks:

Whatever your business or interest, going mobile now will give you a competitive advantage. But going mobile next year will be a desperation move to stay in the game. Don’t miss out on this. Mobile is the biggest opportunity going. Where is your business? Where is your mobile strategy?

So, where is it?



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1   Dan Bowling ~ 19 January 2007

Thanks for that tidbit Cameron! Perhaps a mass exodus to the mobile web will make it a self fulfilling prophesy.

I think it should be mentioned, however, for the sake of all the Vice Presidents/Managers whose web designers send them to this article, that the mobile web is a different beast. You can’t really have the same kinds of goals for it as a traditional website, especially if you desire some sort of specific conversion rate.

Perhaps the iPhone will help this, as screens become bigger with a higher resolution, and browsers become more supportive of traditional websites.

On a side note, when do you think that the same number of web pages will have a handheld style sheet embedded as do print?

2   Kerwyn ~ 19 January 2007

Over in the beautiful Caribbean islands there is a huge craze for mobile devices. Sadly there is little being done to push this area of development. There are a few people who are going to use this to their advantage, but that won’t stop me from learning and educating others to the fruits of mobile web development.

3   Sheldon Kotyk ~ 19 January 2007

So where’s the book Cameron?

4   JP ~ 19 January 2007

Thanks for the link - very positive. It seems that more opportunity than anywhere will exist in the 3rd world. It’s difficult to know what to do with that information when sat at a desk in Canada. Does anyone here have a 3rd world mobile strategy?

5   Cameron Moll ~ 19 January 2007

when do you think that the same number of web pages will have a handheld style sheet embedded as do print?

No idea.

So where’s the book Cameron?

Yeah yeah, gettin’ there.

It seems that more opportunity than anywhere will exist in the 3rd world.

Not necessarily. The most growth might be occurring in 3rd world countries, but noted in the article are penetration rates for various regions, notably “the Western European average per capita penetration is already 110%. This means most of Western Europe has more phones than people.

As for a North American strategy, we might be lagging behind the rest of the world, but even then the article notes “the USA reached 75% penetration.” I wouldn’t doubt Canada shares a similar percentage.

6   Dan Bowling ~ 19 January 2007

I don’t think penetration will be the figure we need to look at. In third world countries, the mobile device may be the best way to access the web. Even if every US citizen had a web capable mobile device, I have a feeling that they will still do most of their browsing on a PC. Third world countries don’t always have that PC backup.

7   Steve Williams ~ 19 January 2007

Something I think the article overlooks, is that despite the quality of in-car entertainment systems, few people sit in their car to listen to music. That’s because it’s a secondary function. In the same vein, internet access is a secondary function of mobile phones.

Compare listening to music in a car with surfing the web on a phone and it’s clear there’s still a long way to go. Accessing the web on a typical mobile phone (Razr etc) is a tortuous affair and an expensive habit to boot. In my opinion, both of these factors need to change before we see widespread use of mobile phones for internet access.

Whilst I believe companies should already be examining mobile opportunities, I honestly don’t see the market changing that fast for 2007 to become the year that all businesses need to get their mobile strategy together or suffer the consequences.

8   Ian Adams ~ 19 January 2007

While definitely significant, I think that some of those facts are fudged with assumptions. For example, he mentions that all 950 million mobile phones sold in 2006 could access the web, but that doesn’t mean that the subscribers had a plan that allowed them to browse the web on their phone. My current phone has the capability of getting on the web, but it can’t get on the web because it’s not part of my plan. I think that doing a survey of mobile service providers for the number of subscribers with data plans would give a much clearer picture.

9   Victor ~ 21 January 2007

Hi Cameron,
While 2.7 billion maybe quite staggering, you must also consider that not all those mobile phone owners can access the web. Because I know of many people in my country (Indonesia) who have handphones that can’t access the web. And you must consider that not everybody is savvy enough to use this web-browsing feature in their handphones even if they own one.

10   Matthew D. Jordan ~ 22 January 2007

@ Victor

I’d have to agree, as a designer I still never use my phone for anything other than calling, even though the fancy schmancy doo-dads to have interweb fun-time are there.

However, I think this will change dramatically in the coming year as previously suggested. The *cough* iPhone *cough* will be claiming me, I’m sure.

11   poomoo ~ 23 January 2007

while i cannot argue the points made by the writer because i have no fact based research to disprove what he says, i would take issue with a couple of points;

“During 2007 the first cross-over will happen, with more users accessing [the internet] via phone than PC.”

i cannot see how this could be true. the PC is the central device for individuals to access the net. it provides a far better environment to do so in terms of usability and functionality.

“Fascinating data coming on that usage as well, the Japanese regulator reports that those who access the web via mobile phone do so more frequently than those who access via a PC.”

it is important to read this properly - he is not saying that more people use phones to access the net. rather, people use phones to access the net more frequently than PCs.

i can understand that to a certain extent. with a phone you may connect multiple times to retrieve multiple pieces of content. but with your PC you may only connect once the full day as it is an ‘always-on’ connection.

i am not denying that mobile web usage is increasing and will continue to do so.. what i am saying is access via phones suits certain type of use/content. looking at how we use the net today i simply cannot see how it would be better to access it via a phone.

12   paul merrill ~ 23 January 2007

I can tell you (living in Africa) - everyone here in Nairobi has them - from those who make about $3 a day on up to the top.

So far, no one here has done any mobile-based ad campaigns or whatever they’re doing in BroadbandAmerica..

13   Tomi Ahonen ~ 23 January 2007

Hi Cameron and readers of the CameronMoll blog

Thanks for mentioning my blog entry. I am also very impressed with the quality of the discussion here in this thread. Oh, and thank you Cameron - you’ve also sent a nice amount of visitors to our blogsite :-)

Let me comment on a few of the issues that came up in the replies here.

Dan - totally true. It is a point I just made here in Tokyo at the big annual 3G telecoms event which I chair. I made that point specifically today in my presentation saying you cannot copy the internet (nor TV programming) and expect success on mobile. The mobile is the newest mass media. It is as differnt as the internet was from TV, or TV was from radio. You need to understand what works (alerts, votes, blogs, search, picture uploads, user-generated videos, citizen journalism, etc) and what doesn’t - long-form movies, massively multiplayer games, etc.

Cameron - Canada’s penetration rate is dead-last in industrialized world, at about 60%.

Dan (on penetration third world vs USA) - in Third World PC penetration is in low single digits and cellphones outnumber PCs typically from 6 to 1 to as much as 20 to 1. In Africa, India, Indonesia etc ANY “web” type of mass market campaign can only be executed on cellphones (typically on SMS text messaging or basic WAP) as the PC penetration - and reliable internet access - is so minimal.

On America, thinking American penetration will keep users on PCs. Maybe not. Did you know the world’s most advanced broadband internet market is South Korea, and second most advanced is Japan. Korea reached 100% internet migration to broadband already ! Both countries are tied for fastest internet connections where 50 Mbit/s is now the offering and Korea promises 1 Gbit/s in a year (first campus gigabyte broadband services already launched on trial basis).

That - the world’s most advanced market for IT/PC/internet/broadband - is by far the most user-friendly, service-rich (and also WORLD’S LOWEST COST) web experience. Yet, both countries have already seen the migration of majority of users accessing the web go from PC to cellphone. Japan saw this in 2005, South Korea (and China) in 2006. Numerous countries are now in the 30%-40% region, just heard today Turkey is in 37% migration. Turkey! This is hardly Finland or Israel or Hong Kong…

But my point is, you think just because the existing base of PCs, and widely spread internet access and massively adopted broadband speeds will safeguard the USA from cellphone based internet access. Not so. If Japan and South Korea are there already, this is a very likely scenario for the USA very soon.

Then - please consider for a moment that the Japanese, Korean and Chinese example actually is a fore-teller of what will happen everywhere. In that case, anyone who thinks “like you did” - ie that America is “safe” - will be the “losers” in the technology shift. And anyone who really “gets it” NOW - before every Apple, Google and Microsoft rushes to mobile - those early birds will catch this worm

Note - during the past 12 months Microsoft CEO Bill Gates, Google CEO Eric Schmidt, and Apple CEO Steve Jobs - have said the future of their company is solely dependent on winning on the MOBILE internet.

Did I get your attention? Its no longer this silly Finnish ex-Nokia guy who lectures at Oxford University and now lives in Hong Kong, who writes about this pending mobile internet (as my ground-breaking book m:Profits, making money with mobile services). Now even the “ultimate backwaters” of mobile telecoms, Silicon Valley, has suddenly woken up to the mobile internet. AOL was just here in Tokyo speaking at this event. They said they are studying now the mobile internet to see how search will be optimised for this environment. Very illuminating. All the big players are now moving to mobile. Disney? Seven-Eleven? MTV? Visa? They’re all here already.

Steve - you are right from your vantage point. The handsets that sell most in America are not optimised for content consumption on the cellphone. The carriers in America are even more behind the times than are the phones offered in America.

But take the most used application on the web - e-mail (about to be overtaken on the web by search). What is the most addictive e-mail platform? The Crackberry of course. The Blackberry by RIM. This is the mobile internet, even from the “backwaters” of Canada. Don’t try for one moment to suggest that for addicted Blackberry users they could go back to living without that device.

Now - please re-examine. Consider the superphones we have here in Asia and in Europe. The world’s most expensive smartphone is not a Treo or Blackberry. Its the Nokia Communicator. Try accessing the web on the 9500 Communicator and be amazed. Its full VGA width (letterbox) screen and its full qwerty keyboard. Yes, we can “do a Blackberry” on a cellphone, also for web apps that are more advanced than e-mail.

Then consider Japan. In Japan - the world’s most advanced cellphones (mostly because they are on a peculiar standard that does not roam in ANY other country but also because the carriers design the phones). You don’t need to type in ANY web addresses, because they all read 2D barcodes (the square scribbles which look like fingerprints). All Japanese business cards now have the 2D barcodes. All magazine ads feature 2D barcodes, rather than the www.mycompanyisthis.com URL web addresses.

Then what of creating content and sharing it. The biggest craze on the web, blogging, picture sharing, video sharing. 10% of Americans blog. 43% of South Korans MOBILE blog. One third of AMERICAN Flickr users already upload pictures direct from their cameraphones. Love the video traffic on YouTube? Cyworld in South Korea already generates more video uploads than YouTube. And South Korea has one sixth the population of the USA.

Yes your laptop has a bigger screen than the cellphone. Yes your laptop has a full qwerty keypad. BUT no laptops have 2D barcode readers. A laptop makes a lousy digital camera, even worse as a videocam. Not to mention, all cellphones can charge directly for content, while on a PC you need a separate account like Paypal or a credit card.

A phone is WAY superior to a PC in consuming and generating content. Way superior. But you have to start to understand it.

If you were right, then today TV would have no movies. The cinema screen is proportionately much larger vs a TV set, than a cellphone screen is vs a laptop screen. If ALL movies managed the transition from the first screen to the second screen, then why can’t the content currently on the third screen (PC) migrate to the fourth screen (cellphone).

Ian - you are very right. Of the 950 million phones sold last year (out of 2.7 billion in use) while all “could” (technically) access SOME LIMITED web content (WAP, SMS), definitely not all are even enabled to do that.

HOWEVER we have actual user data that in 2005 the total user base of people on the planet, who accessed web content via a cellphone was 588 million. That is over a year ago. Last year that number grew to about 750 million (I’ll be getting final numbers soon). So inspite of nearly 2 billion cellphone owners NOT using web content on their cellphone, already 750 million do.

Here is where the global economics totally alter the game. Remember there are three times as many cellphones as PCs. Now consider, the global replacement rate for PCs is 3.5 years (seminconductor industry association) vs 18 months cellphones (same source). One YEAR before Apple started to call its darling iPhone a pocket computer, Nokia shifted its N-Series and no longer called them phones. Nokia calls the N-Series mobile computers.

The phones develop faster and are replaced faster than PCs. So the gap is closing (while is still very significant). So for many occasional users, who have an old desktop or laptop, and think about upgrading, and then they find a top-end smartphone at a fraction of the price - and in most markets subsidised to near zero cost - which can “do all” of what the old PC could do, increasingly this becomes a compelling offering.

NOT FOR EVERYONE. Definitely not for all. But for some people. That erodes the growth of PCs, while migrating users.

Then we see what happened in Japan, Korea and China. The CONTENT becomes formated for the small screen rather than the PC screen… Suddenly the default format is cellphone. This happens naturally as the technology shifts, like we saw with the internet when it last migrated, from mainframes (who remembers Gopher) to the current PC based internet…

Mathew - you seem ready to accept my premise when the iPhone ships? So can you “trust me” that the company which invented the mobile internet - NTT DoCoMo of Japan, which also by the way designs all of its phones to specifically function on its services - and which by the way earns more from internet revenues than Google or AOL or Amazon or Yahoo or eBay - can you give me the benefit of the doubt, that if someone like you - before test-driving the iPhone can accept Apple can crack this nut, that perhaps NTT DoCoMo with 8 years of rehearsals, has also cracked this nut already?

poomoo - you say on my stats that you cannot see it being true because “the PC is the central device to access the web”. Do recall, that I am not limiting my analysis to America. I am discussing the whole world. For 85% of the planet, there are NO PCs. They have NO option. But for that 85% who don’t have access to a PC, the wealthiest (and best-educated) one sixth DOES have a cellphone. In fact half of those cannot even read or write. But they can click on a mobile payment link on their cellphone etc. You are thinkin from an America-centric view point. Even in Southern parts of Europe PC penetration is only in the 20% - 30% range.

On the Japanese regulator data. The passage you take issue with is what the regulator said now in 2006. PREVIOUSLY in 2005, the regulator had ALREADY verified the numbers - also ITU verifies these - that Japanese USER numbers on mobile exceed those on PC based internet access. BOTH facts are true. This is not a “misreading” of that Japanese regulator comment. Once the International Telecommunications Union (the world’s most neutral source of telecoms stats) verifies your numbers, they are taken as absolute fact. Japan is already there with web users. ITU 2006 numbers haven’t come out yet but this is so “old news” that ITU reported that early in 2006…

But you make a good point. Like I said earlier, not all content will function “perfectly” on the cellphone. Entertainment and information content on TV totally trumps radio. Yet TV did not kill radio. Now radio has its “killer apps” like traffic updates and drive-time talk radio etc. This is what will happen when the majority access the web on the phone. The PC based internet will not go away. Print is the oldest mass media at 500 years, and is still going strong, inspite of movies, radio, TV and the web “stealing” its readers and markets. New media mean the old will adjust.

But the cellphone will utterly dominate this space. EVERYTHING you can do a PC you can do a cellphone. BUT there are 5 mass media benefits that exist on a cellphone based mobile internet, which cannot be matched by ANY of the older media.

It is not only a competitive media, the cellphone is a superior media to the PC based internet. But yes, a massively multiplayer online game like World of Warcraft, or a graphically rich virtual world like 2nd Life, these will remain on teh PC based platform just like traffic reports and drivetime radio still sustain radio 50 years after TV came along and took most of radio’s “killer apps” (ie soap operas, live sports, news, etc)

I hope that helped, and yes, I understand these are easily also frustrating concepts. You hadn’t thought of it that way. It always hurts when your existing view of the world changes. But make no mistake about it, those numbers tell a massive story. Get into it now.

Incidentially, I will be blogging an update to the Mobile as 7th Mass Media story shortly. Check it out at my blogsite. Puts more focus to this story.

Tomi Ahonen :-)
4-time bestselling author
lecturing on 3G telecoms and media convergence at Oxford University
web - www.tomiahonen.com
blog - www.communities-dominate.blogs.com
podcast - www.horizonchannel.com

14   Erwin Heiser ~ 23 January 2007

I agree with #7 Steve; as another just recently said “the killer app on a phone is making a call”. Surfing on a phone will always be a secondary activity I’m afraid. Having said this it’s nice to know if you build your site with web standards you’re good to go for a mobile version. Looking forward to your book!

15   Tomi Ahonen ~ 24 January 2007

Hi Erwin (and Steve)

On the point of “killer app on phone is making a call” - this is one of the most prevalent items of conventional wisdom that time after time in real world surveys and consumer preferences is proven to be false, AFTER you learn what you can do with the phone.

The first time this was observed was Finnish professor Timo Kopomaa in his ground-breaking book City in the Pocket (translated from the Finnish Tietoyhteiskunnan Synty) which I recall was released in English in 2000. It was a significant book to influence me to write my first bestseller, Services for UMTS (ie applications for 3G next generation wireless) in 2002.

Professor Kopomaa interviewed Finnish youth and reported that they PREFER to use SMS text messaging to voice calls. A bewildering finding. Next Nokia ran a global survey of something like 12,000 respondents on messaging, and found similar findings (among the youth) in 2001. Next Orange in France and the UK replicated these findings in 2002, Siemens across an Asia-wide messaging survey in 2003. Now the latest was an American survey this spring, by I think it was NPD Research, found similar findings.

So you think this is only applicable for kids who have no money. That is where this gets mind-boggling. The UK - by no means the world’s most advanced cellphone market - in a major BBC story last spring, found that the majority of the British public prefer SMS text messaging to voice calls on a cellphone.

This is no longer a “youth thing”. Consider your collegues who have fallen addicted to the Blackberry (constantly fiddling with it, to see if they received another message). That is like SMS addiction, but Blackberry is MILD compared to SMS addiction. The Queensland University of Australia study found that SMS is as addictive as cigarette smoking. The Belgium Catholic University of Leuwen study found that SMS causes withdrawal symptoms etc.

You may think you would never do it. That SMS is silly, slow, inefficient, inconvenient etc. But the MDA (Mobile Data Association) found in 2002 - that 80% of business executives in the UK communicated via SMS text messaging on work-related communications, and by 2004 the same annual survey found that the majority of British execs felt SMS was their MOST important means of communication - yes, ahead of voice calls.

It SOUNDS counter-intuitive yes. But the facts are irrefutable. This is a global human finding. There are real, compelling reasons why SMS takes over. It is the fastest form of communication known to man, and it is the most secretive form of (non-military) communication and it is the most personal communication. And SMS reaches everybody who is economically viable. By EVERY count, SMS trumps voice, voicemail, e-mail and IM.

I know it is difficult to accept, but I urge you to think past your own preferences, and accept that if a majority of business execs - who don’t care about “saving a few pennies” instead of a call - will prefer SMS to voice, there MUST be some real reasons to this.

SMS is the killer app (for 2G digital cellular telecoms). For 3G it is social networking services ie blogging, picture sharing, video sites etc…

Tomi Ahonen :-)

16   josh ~ 24 January 2007

Very interesting article and discussion to say the least. But i have to say i think the whole idea of the majority of the web migrating to cell phones is completely ridiculous.

Its like trading in a BMW for a Ugo cuz its smaller and easier to parallel park.

I for one can say that i do benefit from the technology of mobile web from time to time. Would i ever make purchases on it..NO. Do i look up things like movie tickets…YES. Its easy to sell the uneducated on the idea of having the internet in there pocket. And from my experiences most of the worlds population is stupid to say the least.

And the bit about cell phones being used to access the internet more frequently is ridiculous as well. Im not saying it isnt true but maybe its only true because its easier to carry a phone than a pc. The article says nothing as to what type of content is being accessed by these mobile devices. Im honestly not even sure what i can use the mobile internet for other than bragging rights at the moment.

And with many States in the U.S. banning cell phone usage in your car where the hell are we supposed to be accessing the mobile net at?

The only relevancy i see for this article is the chance to make a quick buck off the poor, broke, dumb bastards in a 3rd world country. Im pretty sure they need that as much as they need another plague.

What are we to do with this mobile net if/and when the technology to bring broadband internet to your home via electrical lines ever comes to fruition? We would instantly have every home in America with power able to get high speed internet. I think the technology is still 3-5yrs out before the mobile internet becomes something more of a benefit than a wimsical delight for those that can afford the outrageous data plans.

Right now its like trying to download porn on the ol’ 14.4 data modem.

Everyone remembers how exciting those times were.

josh sternadel:

17   everyone ~ 25 January 2007

do yourself a favor and stay away from the political satire (Obama link). It makes your site much more appealing.

18   Steve Williams ~ 26 January 2007

Hi Tommi :-)

I wasn’t excluding SMS when I talked about primary function, calling someone or texting them - it’s one and the same thing to me - but I wasn’t explicit about that, sorry.

I do disagree that SMS is superior to IM though. As Apple previewed with the iPhone, it’s highly likely SMS will evolve into an IM like experience, which would make it far more coherent when SMSing several friends/colleagues in the same session.

I do largely agree with you, it’s just the time line. I don’t see the West catching up with the Far East as early as 2007.

19   wlfldy ~ 31 January 2007

Oh, wow! I can hardly wait. Another medium to bombard me with comercial info I don’t read, see or listen to, assuming this is all marketing focused.

When I purchase, it’s because I researched the item on my own. No commercial is going to tell me the faults of the product. If I buy something that I’ve never seen, it’s cause I heard about it word-of-mouth from people I trust.

I hope this isn’t rude and I don’t mean to be cynical, but marketing people think they guide the world on every purchase. Maybe I’m the minority, but I don’t really pay attention to ads. So, to me, any funds spent on marketing is a waste of time once a product has established a market.

20   Mark Wyner ~ 09 February 2007

A big thanks to Cameron for the flash on this information, and to Tomi/Alan for the information itself.

It’s important that the web community is savvy to this exponential increase in web access via mobile devices.

21   TalkALot ~ 24 March 2007

I doubt it. Microsoft could have based the first Zune player on Windows

Mobile, but it didn’t. This makes me suspect that no Zune devices will use

Windows Mobile, including the phone.


22   The Phone Man ~ 21 June 2007

Cameron, thank for keeping this blog upto date


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