Magento Blog


iPhone continues to drive global smartphone growth

The following post is written by Tamar Levin, a research analyst at Magento.  Tamar is a seven-year veteran in the Market Research and Insight Industry.  Prior to Magento, Tamar was staff research manager at one of the world’s leading market-research agencies, TNS (part of WPP’s insight consultancy), where she conducted global-market & industry analysis spanning 75 countries.

Thomas Husson, author of Forrester Research’s ‘2010 Mobile Trends’ report, declared 2010 as the year in which we'll see mobile's transition to center stage in the digital marketplace. In his blog he writes that, "A new mobile decade is opening up, and now is the time to start your journey. In the past 10 years, mobile phones have changed the way we communicate and live. In the next 10 years, they will change the way we do business."

Ebay's announcement at the end of 2009 that we're at "the dawn of the m-commerce era" is the first real evidence of the major headway Husson is refering to. During the last year, mobile-phone purchases from the online auction site included a $19,000 23ft boat, a $10,000 Boston grand piano, and a $495,000 1965 Shelby Cobra. According to the site’s own figures, eBayers in more than 165 countries now buy via mobile every two seconds.  It’s a revolution in shopping habits that allows consumers to shop for what they want, when they want it, and where they want it, and that's not necessarily when sitting in front of a computer or even walking through a store.

Mobile will be larger than the desktop web, and iPhone is driving the growth

At the Web 2.0 Summit in San Francisco, Mary Meeker, Morgan Stanley's Managing Director, projected the mobile web to be 10 times as big as traditional desktop Internet, and urged all companies to "absolutely be on board" - or risk being left behind.  In her presentation, Meeker pointed to Apple's iPhone as the primary driver behind the growth of mobile web usage. The iPhone, she notes, is at the frontier of mobile-web usage, driving not just its own sales at an adoption rate that is unprecendented, but also as a catalyst to the entire smartphone industry.

As the chart below indicates, in just three years since it's launch, the iPhone catapulted mobile-web usage into the mainstream, driving AT&T’s mobile data traffic 50 times higher than it's metric pre-launch.

The iPhone/iPod touch is the fastest growing piece of hardware the world has ever seen, says Meeker.  With roughly eight quarters post launch, the iPhone has gained 57 million users, twice as big as imode (25 million users), five times as big as Netscape (11 million users), and eight times as big as AOL (7 million users) at comparable points in their histories.  "Marketshare versus usage share", she says, "is also incredible and it will only grow".

How did we get here?  The 12 months that kick-started the smartphone industry

According to the Nielsen Company, more consumers than ever are using smartphones in their everyday lives. In the past year alone, the total number of smartphone subscribers increased 72% quarter-over-quarter, growing from 15 million subscribers in Q2 2008 (when iPhone 3G was launched) to 26 million in Q2 2009.

smartphone subscribers

When broken down by global markets, we can see the phenomenon worldwide with Italy owning the largest percentage of smartphone owners at 28%, Spain is close behind with 23% (U.S. ranks third when ranked by penetration), while France has the most room to grow, with an 11% penetration level.

global_smartphone

Mobile commerce is ready for growth

As smartphones continue to sell, the number of people using the unlimited internet access they offer is bound to increase the number of mobile surfers and ultimately the number of mobile shoppers.  Apple is very much aware of the mCommerce potential of its device.  Its ecosystem (iPhone +iTouch + iTunes) has over 100 million iTunes users on PC or Mac trained for purchasing its digital goods.

In fact, with multiple access points to its App and iTunes Stores, and linked credit cards, the iPhone already enables a one-click mobile purchasing process.  It is not a coincidence, then, that the vehicle eBay used to drive it's mobile channel in 2009 was an iPhone application downloaded by more than 5 million eBay customers around the world who spent an estimated $500m on eBay.  The online-auction company is now projecting $1.5B in mobile-channel revenues in 2010.

For online merchants wondering what time would be best to release an iPhone app based on their existing storefront, now is a great time.

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