September 18, 2012

Smartphones Become Mainstream

By Hisham Isa, Vice President (Marketing)

Smartphones are no longer simply a tool for business professionals.

Nor is the market for smartphones limited to rich kids in places like Singapore and the US.

BuzzCity's latest survey - conducted in 71 countries across the globe - shows that nearly half of all people surfing the mobile internet are using smartphones.

This is a huge shift, thanks largely to cheaper handsets and more affordable bandwidth costs . . . and it's a trend that has important implications for handset manufacturers who risk being irrelevant if they compete on price alone.


Let's start with some statistics.

To be precise, 45% of mobile users are now using smartphones to communicate with friends and access news, information and entertainment online.

In some countries, smartphone penetration rises to 90% or more. Here's a list of the Top Ten countries for smartphone penetration, as of July 2012. You'll note that there are countries from Asia, Europe, Latin America and the Middle East.

Some of our biggest markets – like India and Indonesia – are missing from this list, but even here, smartphone penetration is more than twenty percent.

We're also seeing an increasing number of people in their 20s and 30s using smartphones. Young adults aged 20 – 34 account for 62% of smartphone users now, up from 57% in 2011.

Smartphone Usage, Age Distribution, 2011 vs 2012

The gender gap is also closing. Male surfers still generally outnumber women, but in markets like South Africa and Thailand where data traffic is cheap, we find more women online. In South Africa, women actually outnumber men 53 – 47%.

Mobile surfers also come from all business sectors and salary brackets.


Smartphones risk becoming a commodity. From the perspective of many consumers, whether you buy an HTC, Nokia, Samsung or even an iPhone, the features are basically the same – particularly for phones within the same price range.  Clearly, fragmentation of operating systems has had little or no effect on the consumer.

If handset makers are to avoid competing on price – a scenario which leaves no winners, at least among the manufacturers – they need to differentiate themselves by focusing on content services.

We find that about users across the BuzzCity Network are hungry for mobile entertainment and media content.

Meeting this demand could lead to a return of paid mobile subscription services.

Premium Services

We're already seeing some examples. Take the case of Amazon Prime. Seven years ago, it started as a service to provide regular Amazon shoppers with free two-day shipping – in exchange for an annual fee. But now, it's evolved to be more about content than shipping. Amazon Prime subscribers have access to thousands of movies and TV shows available for viewing instantly online and without commercials. They can also borrow books from the Kindle Library every month.

Amazon Prime subscribers can currently access content on computers, tablets and televisions. This could easily be expanded to include smartphones. However, mobile premium services need to be supported by better m-banking services. Hopefully we will see a “War of the Wallets” as mobile players – particularly the Over-the-Top companies like Facebook, Google and Yahoo! -- roll out specific payment systems.

The key to winning consumers' hearts is to keep product lines simple, secure and to offer clear value propositions.

Download Volume 2, Issue 4 of The BuzzCity Report from our website and stay tuned for more insights from the survey in other GammaLife postings.