Smartphones and apps: consumer perception versus reality

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Smartphones and apps: consumer perception versus reality

Webinar

Smartphones and apps: consumer perception versus reality 11 April 2012 Ronan de Renesse and Martin Scott

© Analysys Mason Limited 2012

Smartphones and apps: consumer perception versus reality

An introduction to the Connected Consumer Survey and our smartphone usage analytics Smartphone perceived usage versus real-world usage Understanding app consumption Segmenting user behaviour What next? Q&A

© Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

Perceived usage: welcome to the Connected Consumer Survey 2012 Figure 1: Selected statistics from the Connected Consumer Survey 2012 [Source: Analysys Mason, 2012]1

Almost 30% of respondents have no intention of buying a smartphone

11% of smartphone users now use mobile VoIP

Smartphone usage is disrupting the mobile market

Saturation forces operators to change acquisition and retention strategies

Fixed service providers continue to be concerned about mobile broadband

Countries covered by Analysys Mason’s Connected Consumer Survey 1

Various questions; n = 7485.

© Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

Real-world usage: smartphone usage analytics in partnership with Arbitron Mobile  Arbitron Mobile is the mobile arm of Arbitron Inc. The company installs applications on users’ mobile devices and collects measurements that capture everything that the user does on the device.

Figure 2: Illustration of real-world smartphone data analysis process [Source: Analysys Mason, 2012]

 Through our partnership with Arbitron, we have access to data about the on-device behaviour of 1138 smartphone users in France, Germany, Spain, the UK and the USA during August and September 2011.

1138 smartphones

 The data covers foreground application usage, data traffic (cellular and Wi-Fi), location (home, away and travelling), voice and SMS usage.  We combine this with demographic information such as age, gender, country of residence, handset, handset OS and carrier. © Analysys Mason Limited 2012

2 months of data collection

>30 million lines of raw data Analysis

Insight into real-life usage

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Smartphones and apps: consumer perception versus reality

Comparing the characteristics of ‘traditional’ surveys with on-device monitoring Figure 3: Characteristics of different types of primary research [Source: Analysys Mason, 2012]

Characteristics of ‘traditional’ surveys •

Subjective data

© Analysys Mason Limited 2012

Characteristics of on-device monitoring •

Real-world data

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Smartphones and apps: consumer perception versus reality

Comparing the characteristics of ‘traditional’ surveys with on-device monitoring Figure 3: Characteristics of different types of primary research [Source: Analysys Mason, 2012]

Characteristics of ‘traditional’ surveys

Characteristics of on-device monitoring



Subjective data



Real-world data



Insight into future usage



Insight into current usage

© Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

Comparing the characteristics of ‘traditional’ surveys with on-device monitoring Figure 3: Characteristics of different types of primary research [Source: Analysys Mason, 2012]

Characteristics of ‘traditional’ surveys

Characteristics of on-device monitoring



Subjective data



Real-world data



Insight into future usage



Insight into current usage



What consumers think they’re doing



What consumers are actually doing

© Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

Comparing the characteristics of ‘traditional’ surveys with on-device monitoring Figure 3: Characteristics of different types of primary research [Source: Analysys Mason, 2012]

Characteristics of ‘traditional’ surveys

Characteristics of on-device monitoring



Subjective data



Real-world data



Insight into future usage



Insight into current usage



What consumers think they’re doing



What consumers are actually doing

Both have value The disparity between what consumers think they are doing and what they are actually doing gives us information about how much they value a particular app or service. © Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

Incorrect consumer perception: 4G is here … or is it? Figure 4: Handset owners’ understanding of their mobile network generation, by handset type [Source: Analysys Mason, 2012]

100%

Percentage of respondents

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% All Unsure

iPhone 4 2G

3G

4G

Question: “Which of the following personal devices do you own or use > mobile phone > network generation?”; n = 7140. © Analysys Mason Limited 2012

Smartphones and apps: consumer perception versus reality

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Definitions  Penetration: the number of smartphone users that we observed using a particular app during the two-month observation period of the study, as a percentage of all smartphone users in the panel.  Face-time minutes: the total number of minutes for which an app was displayed on the smartphone’s screen divided by the observation period in days for each smartphone user.

 Frequent user (Connected Consumer Survey): respondents who answered “Yes – Frequently” to the following question: “Which of the following services or devices do you currently use on a regular basis on a mobile phone (at least once within the past 3 months)?”.  Frequent user (smartphone usage analytics): a smartphone user is considered a frequent user of an app if they use it for more than one-third of the days that they were a member of the panel during the observation period.  Usage frequency: the number of days in which an app or an app within a specific category was used in the foreground of the device, divided by the observation period in days for each smartphone user.

© Analysys Mason Limited 2012

Smartphones and apps: consumer perception versus reality

An introduction to the Connected Consumer Survey and our smartphone usage analytics

Smartphone perceived usage versus real-world usage Understanding app consumption Segmenting user behaviour What next? Q&A

© Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

Identifying disparities in value = identifying problems with engagement = missed opportunities to monetise Figure 5: Perceived and actual usage of mobile content and apps, by operating system [Source: Analysys Mason and Arbitron Mobile, 2012] 90%

Percentage of smartphone users

80% 70% 60%

50% 40% 30% 20% 10% 0% iOS

Android

BlackBerry OS

Respondents who claimed to use mobile content and apps Respondents who use apps that they have installed themselves

© Analysys Mason Limited 2012

Symbian

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Smartphones and apps: consumer perception versus reality

Disparities between perceived and actual text-based communication activities vary significantly Figure 6: Perceived and actual frequent usage of communications apps by type [Source: Analysys Mason and Arbitron Mobile, 2012] 90%

Percentage of respondents

80% 70% 60%

50% 40% 30% 20% 10% 0% Email

Social networking

IM (includes OTT messaging)

Smartphone users who claimed to frequently use an app of this type Smartphone users who frequently use an app of this type

© Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

The importance of mobile browsing on smartphones should not be underestimated Figure 7: Average usage per smartphone owner by category [Source: Analysys Mason and Arbitron Mobile, 2012]

Figure 8: Perceived and actual usage of mobile web [Source: Analysys Mason and Arbitron Mobile, 2012]

100% 90%

7.40

Percentage of smartphoen users

Average app face-time value (minutes per day)

7.60

7.20 7.00 6.80 6.60 6.40 6.20

80% 70%

60% 50% 40% 30% 20% 10% 0%

6.00 Browsing

© Analysys Mason Limited 2012

Social networking

Gaming

Total users Actual

Frequent users Perceived

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Smartphones and apps: consumer perception versus reality

Misconceptions drive up customer care and marketing costs Figure 9: Smartphone owners’ understanding of their phone’s operating system [Source: Analysys Mason, 2012]

18%

10%

7%

64%

Unsure

Incorrect

Unspecified

Correct

Question: “Which of the following personal devices do you own or use > smartphone > operating system?”; n = 2963. © Analysys Mason Limited 2012

Smartphones and apps: consumer perception versus reality

An introduction to the Connected Consumer Survey and our smartphone usage analytics

Smartphone perceived usage versus real-world usage Understanding app consumption Segmenting user behaviour What next? Q&A

© Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

Each user uses most categories of apps for less than one minute per day, regardless of penetration Figure 10: App categories penetration rate versus average face time value for users of the apps [Source: Analysys Mason and Arbitron Mobile, 2012] 8 Social networking

Gaming

Face-time value (minutes per day)

7 6 5 IM 4 3

Maps and transport 2

Books and magazines

1 Health

0 0%

© Analysys Mason Limited 2012

Sports Finance 10%

20%

Music Commerce TV and video Productivity Weather

News 30% 40% 50% 60% Percentage of smartphone users

70%

80%

90%

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Smartphones and apps: consumer perception versus reality

Almost half of installed apps are used only once but those most frequently used come from a variety of categories Figure 11: Distribution of apps by frequency of usage [Source: Analysys Mason and Arbitron Mobile, 2012]

Figure 12: Top-100 apps by number of frequent users, by category [Source: Analysys Mason and Arbitron Mobile, 2012]

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Average number of apps

16

21%

27%

14 12

10 13%

3% 4% 4% 5%

8 6 4

10% 6%

7%

2

© Analysys Mason Limited 2012

6–7 days per week

5–6 days per week

4–5 days per week

3–4 days per week

2–3 days per week

1–2 days per week

0–1 day per week

Only once

0

Gaming

Social networking

Messaging

Commerce

Multimedia

News

Utility

Weather

VoIP

Other

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Smartphones and apps: consumer perception versus reality

Many app categories on Android and iOS enjoy more than 50% penetration Figure 13: App/service category penetration, by operating system [Source: Analysys Mason and Arbitron Mobile, 2012] 100%

Percentage of smartphone users

90% 80% 70% 60% 50% 40% 30% 20% 10%

0% Browsing

Portal

Social networking iOS

© Analysys Mason Limited 2012

Utility

Android

Maps and Productivity Gaming transport BlackBerry OS

Symbian

TV and video

Weather

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Smartphones and apps: consumer perception versus reality

However, the average frequency of app usage is diluted by ‘long-tail’ apps Figure 14: Frequency of usage of all apps, by operating system [Source: Analysys Mason and Arbitron Mobile, 2012] 100%

Percentage of total apps used

90% 80% 70%

6–7 days per week 5–6 days per week

60%

4–5 days per week 3–4 days per week

50%

2–3 days per week 40%

1–2 days per week 0–1 day per week

30%

Only once 20% 10% 0% iOS

© Analysys Mason Limited 2012

Android

BlackBerry OS

Symbian

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Smartphones and apps: consumer perception versus reality

The size of app catalogue has little impact on top app engagement Figure 15: Penetration of top-50 apps by OS [Source: Analysys Mason and Arbitron Mobile, 2012]

80%

Figure 16: Face-time value by OS for the top-100 apps [Source: Analysys Mason and Arbitron Mobile, 2012] 100

Face-time value (minutes per day)

Percentage of smartphone users

70% 60% 50% 40% 30%

20%

10

1

0.1

0.01

10% 0% 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 iOS

Android

© Analysys Mason Limited 2012

Symbian

BlackBerry OS

1 7 13 19 25 31 37 43 49 55 61 67 73 79 85 91 97

0.001 Android

iOS

BlackBerry OS

Symbian

Smartphones and apps: consumer perception versus reality

An introduction to the Connected Consumer Survey and our smartphone usage analytics

Smartphone perceived usage versus real-world usage Understanding app consumption Segmenting user behaviour What next? Q&A

© Analysys Mason Limited 2012

22

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Smartphones and apps: consumer perception versus reality

HTC Android and iOS maximise mobile data consumption Figure 17: Distribution of monthly data traffic percentiles by operating system [Source: Analysys Mason and Arbitron Mobile, 2012]

Percentage of respondents

100% 90% 80% 70% 60% 50%

40% 30% 20% 10%

90–100%

80–90%

70–80%

60–70%

50–60%

40–50%

30–40%

20–30%

10–20%

0–10%

0%

Percentile of data traffic use

Heavier users of data iOS

© Analysys Mason Limited 2012

Android (HTC)

Android (Samsung)

Android (Other)

BlackBerry OS/Symbian

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Smartphones and apps: consumer perception versus reality

Brand and services win over customers more than technical specifications Figure 18: Distribution of users by age by smartphone manufacturer [Source: Analysys Mason, 2012]

55+

35–54

18–34

0%

10%

20% Nokia

© Analysys Mason Limited 2012

30% Samsung

40% LG

50% Sony

60% RIM

HTC

70% Apple

80% Other

90%

100%

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Smartphones and apps: consumer perception versus reality

A generation gap is emerging among heavy users of apps Figure 19: Frequent users’ share of total mobile content and apps user base by age [Source: Analysys Mason, 2012] 70%

Percentage of respondents

60%

50% Apps Music

40%

Social networking

Games 30%

Web IM

20%

Email

10%

0% 18–24

25–34

35–44

45–54

55–64

65+

Question “Which of the following services or devices do you currently use on a regular basis on a mobile phone (at least once within the past 3 months)?” possible answers: 1: “Yes – frequently” 2: “Yes – not so often” 3: “No” 4: “I don’t know” ; mobile content and apps users; n = 2517.

© Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

18 to 34 year olds are driving the app market, but some app categories are more popular with older people Figure 20: Age group distribution for each app category [Source: Analysys Mason and Arbitron Mobile, 2012] Health Sports Books and magazines Finance News Music Commerce IM Weather TV and video Gaming Productivity Maps and transport Social networking 0%

10%

20%

18–24

© Analysys Mason Limited 2012

30% 40% 50% 60% Percentage of smartphone users 25–34

35–44

45–54

55+

70%

80%

90%

Smartphones and apps: consumer perception versus reality

An introduction to the Connected Consumer Survey and our smartphone usage analytics

Smartphone perceived usage versus real-world usage Understanding app consumption Segmenting user behaviour What next? Q&A

© Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

The next generation of smartphone users to change app consumption patterns Figure 22: Mobile voice service users’ propensity to buy a smartphone as their next handset purchase, by current pricing model [Source: Analysys Mason, 2012]

Figure 21: Net additions of active smartphones by pricing model, UK, 2009–2017 [Source: Analysys Mason, 2012]

7

Net additions (million)

6

Prepaid

5 4 3 2

Contract

1

Contract

© Analysys Mason Limited 2012

Prepaid

2017

2016

2015

2014

2013

2012

2011

2010

2009

0

0%

Definitely

50% Percentage of respondents

Probably

If same price

100%

Not needed

Smartphones and apps: consumer perception versus reality

Upcoming reports in this area

 Smartphone usage analytics: key findings from on-device usage tracker  Smartphone usage analytics: data traffic and network usage patterns  Smartphone usage analytics: mobile apps and entertainment consumption  Smartphone usage analytics: voice and messaging usage, and apps

© Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

An introduction to the Connected Consumer Survey and our smartphone usage analytics

Smartphone perceived usage versus real-world usage How the operating system affects usage Operator strategies for turning mobile content and apps into a driver for increasing mobile data consumption What next? Q&A

© Analysys Mason Limited 2012

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Smartphones and apps: consumer perception versus reality

Contact details

Martin Scott [email protected]

Cambridge Tel: +44 (0)845 600 5244 Fax: +44 (0)1223 460866 [email protected]

Manchester Tel: +44 (0)845 600 5244 Fax: +44 (0)161 877 7810 [email protected]

Ronan de Renesse

Dubai Tel: +971 (0)4 446 7473 Fax: +971 (0)4 446 9827 [email protected]

Milan Tel: +39 02 76 31 88 34 Fax: +39 02 36 50 45 50 [email protected]

Dublin Tel: +353 (0)1 602 4755 Fax: +353 (0)1 602 4777 [email protected]

New Delhi Tel: +91 11 4700 3100 Fax: +91 11 4700 3102 [email protected]

Edinburgh Tel: +44 (0)845 600 5244 Fax: +44 (0)131 443 9944 [email protected]

Paris Tel: +33 (0)1 72 71 96 96 Fax: +33 (0)1 72 71 96 97 [email protected]

London Tel: +44 (0)845 600 5244 Fax: +44 (0)20 7395 9001 [email protected]

Singapore Tel: +65 6493 6038 Fax: +65 6720 6038 [email protected]

Madrid Tel: +34 91 399 5016 Fax: +34 91 451 8071 [email protected]

Washington DC Tel: +1 202 331 3080 Fax: +1 202 331 3083 [email protected]

Principal Analyst

Principal Analyst [email protected]

Kate Brown Marketing Executive

[email protected]

© Analysys Mason Limited 2012