The boom in smartphones and tablet computers appears to be turning media usage behaviour upside down on a worldwide scale. More and more people watch TV or read newspapers and magazines on mobile devices. They play games on the Internet or do mobile banking while on their way to work. Companies across all industries have to adapt to the mobile media usage, while the media corporations are asking themselves whether the new generation of devices show a way out of the plight of their classic business models. Four new studies by Nielsen give – in part astonishing – insights.

 

> San Francisco/St. Moritz – November 6, 2010 - by Christian Gartmann <

 

Smartphones made by Apple, Blackberry and others are booming. According to the most recent numbers , 28% of all mobile subscribers in the U.S. have smartphones. These digital multipurpose devices are also becoming increasingly popular among teens - low-price phones working on Google’s Android OS in particular are booming.

 

One would expect the mobile Internet to reach the top echelons in a popularity ranking among teenagers. The „US Teen Mobile Report“, however, shows no such thing. The volume of transferred data might be increasing year on year, when asked as to the most important reasons for buying a Smartphone, to teenagers, the mobile Internet does not even make it into the “top ten† reasons (cf. illustration 2 above). To them, “texting† is THE killer application.

 

When queried on why texting is so popular, teens will state that sending a short-text-message is quite simply easier and more convenient than making a phone call. Compared to a year ago, the teens’ texting frenzy increased to 3’339 text messages per month. That is more than 6 texts per every hour that they are awake. 13 to 17 year-old girls text even more: they write an amazing 4’050 text messages a month. In the hands of teenagers, smartphones will thus rather be used for texting than for mobile Internet usage.

 

Not only the youngsters’ usage of mobile media content is watched on like a hawk:  mobile game consoles, e-readers and smartphones are changing the way millions of people around the world and across all age groups are using media. Through Apple’s launch of its iPad, right now everyone’s focus of interest has shifted on the users of these new “tablets†.

 

Apple launched its iPad on the claim that it would bring about the breakthrough for a new generation of computers and a new way to use media. The first goal seems realistic: the iPad is selling like hot cakes and, in the slipstream of their success, an increasing number of manufacturers are launching their tablet computers. Whether tablets are heralding the media behaviour of the new era, remains debatable. A recent study on the use of „Connected Devices“ provides first clues.

 

For media corporations, the pressing question then is whether “iPad & Co† bear the potential to lead them out of the plight of traditional media and their inherent business models, which are being undermined by free content and services on the Web. Nielsen surveyed 5’000 users of “connected devices†. The good news is: mobile users not only use many different media, iPad users also spend significantly more time on news and other traditional media content than iPhone users. Print and video content usage, above all, show notably higher usage (cf. illustration 3 above).

 

Across all surveyed content – movies, TV, books, music, news, and magazines – only magazines are used longer on the iPhone than on the iPad (cf. illustration 4 above). On all the other categories, users of the larger screens spend more time on, sometimes considerably. The big question is whether media companies will be able to make a commercial success out of the popularity of late of their products. One thing that speaks for it is that users of mobile devices are generally more willing to pay for content than conventional web users. On the other hand, a lot of free content is available for mobile devices today already. Hence, it remains uncertain whether paid content is the way out of the crisis.

 

Will advertising have to continue to finance the media business? And, more to the point, will it be able to do so? On the upside: mobile users have a high affinity towards advertising. Some 60% say they are open to advertising if it makes media content available for free. However, the advertising has to be attractive: iPad users will be more receptive to advertising when media formats make good use of the devices’ new functionalities such as embedding video content and offering interactive features (cf. illustration 5 above). 

 

Banking is a good example for a business that rapidly moved its services on the Web and even into handling on-the-go. Less than a decade ago, many of the banking transactions  still required a call at the bank’s counter; today, banks are shutting many of their branches. Modern customer centres are taking their place and waiting in line in front of armoured glass has become a thing of the past. Internet or e-banking has become common place and is becoming increasingly mobile: Over 13 million bank customers in the U.S. already are carrying out their banking transactions via a cell phone; a 129% jump over two years ago.

 

Meanwhile, the setting up of next generation mobile networks has begun all over the world: the tried and tested 2G (GSM) and 3G (UMTS) are not standing still and are being continuously upgraded. In addition, there is the newly developed LTE (Long Term Evolution).  Wireless bandwidths of 100 to 300 Mbit or above per second will soon be available according to the Swiss telco Swisscom and Ericsson (cf illustration 6 above). This goes hand in hand with a continued price drop on mobile data transfer. True broadband Internet will then have reached mobile devices not only technically, it will also have conquered large parts of the population.

 

 

Sources:

 

- Mobile Snapshot: Smartphones now 28% uf U.S. Cellphone Market

Nielsen - November 2010 - Text in English

 

- U.S. Teen Mobile Report: Calling Yesterday, Texting Today, Using Apps Tomorrow

Nielsen - October 2010 - Text in English

 

- Mobile Banking in U.S. grows 129%

Nielsen - October 2010 - Text in English

 

- The Increasingly Connected Consumer: Connected Devices

Nielsen - October 2010 - Text in English

 

- Whitepaper Mobile Communication Technologies

Swisscom Ltd - August 2010 - Text in German