The 2015 Mobile Industry Year in Review
December 8, 2015
We’ve come to the end of another year – one that began with some pretty big predictions for the mobile industry in 2015 from mobile experts – from mobile payments to advertising and wearables to the Internet of Things. Let’s take a look at the industry from the last 12 months.
Overall, the smartphone market has increased 6.8 percent each year with consumers buying 355.2 million smartphones in the third quarter of 2015 alone. Android continues to lead the world mobile market with a 52.61 percent share. Samsung, the biggest seller of Android devices with a market share of 23.8 percent, surpassed Apple’s 13.5 percent, according to a recent report published by the International Data Corporation. This is largely because of the affordability of Samsung’s product line and the price points of the Android market. As consumers are offered a wider array of buying options, many are opting for smartphones that will bring a higher trade-in value. Don’t expect to see these numbers change significantly – Samsung and Apple will continue to lead the device market for the next several years.
Verizon and AT&T continue to dominate the carrier market in the U.S., garnering 34 and 33 percent of the market. T-Mobile and Sprint continue to trail behind, and industry experts do not anticipate any significant shifts in market ownership in the next five years. According to an industry study by Strategy Analytics, “mobile service revenue is about to hit $197 billion annually by 2020.”
It’s no surprise to anyone that while Google Play sees more app downloads (90 percent more, in fact!), the App Store makes more money (80 percent more!!!). Many experts believe this is because of the launch of iPhone 6 and iPhone 6 plus in China. Additionally, Google Play is banned in China, while access to the App Store is permitted. According to App Annie, China represents the global marker for the iOS App Store’s global performance. “Despite all the questions surrounding the Chinese economy, the mobile gaming industry still appears to be going strong.”
Regions where iOS apps have the most downloads also produce the most revenue, but the same can’t be said for Android. Russia, Brazil, India and Mexico report the most Android downloads, but produce very little in terms of revenue.
Internet of Things
EVERYONE predicted Internet of Things (IoT) would grow along with connected homes, cars and wearables. These markets will continue to expand especially as more consumer products continue to hit the market with some form of connectivity.
In 2014, Business Insider (BI) predicted the IoT market would grow 35 percent by 2019 and that connected *things* would outpace connected smartphones, tablets and PCs before 2016. In a survey of executives from companies using IoT, BI found that 51 percent of companies leverage IoT to enhance customer services with 44 percent of companies creating new revenue streams from products and services supporting IoT. Thirty-eight percent of companies are using IoT to improve field services and 35 percent of companies use IoT to drive data science. Leaders in this space include Cisco, Microsoft, Samsung, Intel, Google, Honeywell, HP, IBM, Belkin, Apple and more.
Those same executives also listed off the biggest threats they see against IoT adoption:
Despite the threats against enterprise adoption, Harvard Business Review cited four key trends in consumers’ IoT adoption:
- technology that extends security
- creative ways to enhance our daily experiences
- services that optimize connected devices; and
- applications that map the quantified self
Connected home led the IoT space on the consumer product side with home automation and energy monitoring applications. Products like Nest received plenty of buzz, but the majority of consumers haven’t entirely embraced this market, with 58 percent of American consumers still waiting for IoT to become less of a novelty and more of a necessary value.
“The technology is there, but consumer awareness is not,” said Matthew Davis, vice president of product marketing at StepLeader. “Companies and marketers haven’t convinced the U.S. public that wearables, smart homes and connected cars are must haves. They are still nice to haves.”
As connected devices become more context-aware and better at anticipating user’s needs, we are likely to see more Internet of Things applications depend on past behaviors and less reliant on having the user custom program usage settings. Connected devices that improve the “do it for me” experience will see stronger adoption.
It’s no shock that the wearable market increased almost 223 percent in 2015. Women dominated the wearables market with purchases of health monitoring devices prior to 2015, but as smartwatches become more mainstream, this is likely to shift. Twenty-one percent of Americans now own a wearable device – a number that is expected to double in 2016. Industry experts expect to see improvements in wearables in 2016 by focusing on “improved hardware designs, more apps with greater capabilities, and a slew of VR devices” designed to get users excited about the wearable market.
Health and sleep tracking led wearables adoption early on and will continue to enjoy market leadership as users seek to analyze their personal health data, to understand how their behaviors impact health and other concerns.
Trends in mobile marketing
Personalization. According to Chris Brandt, CMO of Taco Bell Corp., using data to understand the behaviors of customers and provide a personalized experience would be key for 2015. Tapping into how consumers think about a company’s product or service will help marketers determine how to effectively influence their user’s buying decisions so they can send the right message to the right person at the right time. Analytics tracker Localytics published research predicting that marketers who understand how to do this effectively would double app open rates and triple app conversion rates in 2015.
Mashable predicted mobile payments would gain traction in 2015. While awareness of mobile payments grew, with 58 percent of Americans saying they are are “extremely aware” of mobile payments, only 18% used them on a regular basis in 2015. This statistic is expected to increase over the next year with mobile payment transactions to exceed $27 billion.
“Consumers will soon be more inclined to use their phone to purchase low-value, daily items as a starting point. Merchants in these sectors will set the industry standard and will be the ones to watch,” says Pascal Caillon, general manager of Proxama.
Hispanic mobile consumption continued to rise. According to the Captura Group, mobile experts saw huge surges in Hispanic digital engagement in 2015, citing four major trends:
- Hispanic mobile usage skyrocketed.
- Adoption of e-commerce among Hispanics grew.
- Influencer and content marketing is growing with Hispanics, and they are embracing brands that provide relevant content to them.
- Facebook grew its Hispanic affinity segment by 2 million users.
Mobile marketers should not discount these trends, especially as 45 percent of Hispanics used smartphones to connect to the Internet in 2015. Further, Hispanics were twice as likely to pay for a physical good with their phone than non-Hispanics.
In-app advertising continued to be a hot topic with video ads gaining popularity because of the increase in screen size and viewing quality. Native ads, mobile app install ads, in-app promotions, interactive ads and targeted personal ads all saw greater use as marketers sought to provide a more fluid experience where brand interactions don’t disrupt the user. Advertisers also spent more dollars on retargeting lapsed users to re-engage them with the brand/app.
mCommerce. Criteo predicted mCommerce would grow from 29 percent of all eCommerce transactions in the U.S. to 33 percent by the end of 2015 and from 34 percent to 40 percent globally. Fashion and luxury led mCommerce transactions with home-related purchases falling behind other categories such as mass merchants, travel, sporting goods and health and beauty. While conversion on smartphone trended lower than desktop or tablets, the majority of mCommerce transactions in 2015 were on the smartphone because of the high volume of traffic. Apple continued to rise above Android in retail and travel-related mobile transactions.
Data and privacy. As consumers become more aware of security and privacy concerns, they are less likely to allow apps access to location, cameras and other native phone features that are unnecessary to the app’s core task. Research conducted by Pew uncovered five key trends in 2015 concerning apps and privacy:
- 6 in 10 downloaders would not install an app when they discovered how much personal information the app required in order to use it, and 43 percent uninstalled an app for the same reason.
- 90 percent of app users said having a clear understanding about how their data will be used was an important factor when downloading an app.
- Most Android app permissions sought access to a device’s hardware, not a user’s personal information.
- Android app permissions most commonly allowed access to a smartphone’s Internet connectivity.
- On average, free apps requested two more permissions than paid apps.
As a result, brands may see consumers pay a fee for app downloads rather than allow greater access to personal data in exchange for a free download.
If 2015 was the year that smartphone and tablet finally surpassed desktop usage, 2016 is likely to see users become more comfortable with innovative technologies that have emerged in the last few years – IoT, wearables, mobile payments, etc. Some of these mobile trends claimed 2015 would be their years, but it is likely that in 2016 we will see consumer adoption gain traction and enterprises understand how to leverage these trends to improve operations and generate better employee and customer experiences.
Stay tuned for a look at how certain technologies will continue to mature and what new trends we see emerging over the next 12 months.