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Retail analysis

Smartphones dominate mobile traffic worldwide

3 Nov 2010 09:53
LONDON, UK: Smartphone users are generating two-thirds of total mobile cellular traffic* worldwide despite the fact that only 13% of mobile subscribers use smartphones, according to the latest research from Informa Telecoms & Media (informatm.com/smartphones).
Moreover, as these smartphone users spend more time on the Internet, the traffic that each one generates - their average traffic per user (ATPU) - will increase by a staggering 700% over the next five years.

Informa Telecoms & Media estimates that ATPU per smartphone currently averages 85MB per month. The iPhone is the highest-traffic-generating device followed by Android devices. It will retain this lead, Informa Telecoms & Media believes, because Android devices will be spread across high-, mid- and low-user segments.

ATPU is a new metric devised by Informa Telecoms & Media to help the mobile industry measure the potential of new services and revenue streams such as mobile advertising. ATPU could also be used by operators as a key differentiating parameter for judging the popularity of different OS platforms and related ecosystems.

Disparity most pronounced in North America

"The traffic disparity between smartphone and non-smartphone is most pronounced in North America where 86% of mobile data traffic is currently generated by smartphone users, notably those using an iPhone or high-end Android devices," notes Malik Kamal-Saadi, principal analyst at Informa Telecoms & Media. Smartphone ATPU here is forecast to reach a staggering 776MB/month by 2015.

Western Europe will also enjoy rapid growth and the smartphone ATPU in the region will increase almost 17 times to over 736MB/month in 2015 from under 44MB/month in 2009. The rapid growth in these regions will be driven by both the fast migration of subscribers to higher-speed mobile networks, the proliferation of flat rate data plans, and the availability of wide range of smartphones targeting different consumer groups with different lifestyles, which will enable users to consume content and services most relevant to them.

However, the highest smartphone ATPU will continue to come from South Korea and Japan with respective values of 271MB/month and 199MB/month expected in 2010, which is 2-3 times higher than the global average.

Status symbol in emerging markets

In contrast, smartphones remain a status symbol for the majority of users in emerging markets who still use cellular networks largely for voice and SMS rather than to access mobile data services. As a result, ATPU in these regions is not expected to exceed 43MB/Month in 2010 and could be as low as 13MB/month in some African countries. The low penetration of mobile broadband networks, the lack of compelling local content and the proliferation of prepaid subscribers are among the reasons why smartphone ATPU in emerging markets will lag behind this in developed regions.

There will be also a significant difference in the ATPU associated with the different OS platforms. iPhone will continue to lead the smartphone ATPU thanks to its superior user experience. Also, because the iPhone will continue to target premium users with high ARPUs, it is likely to remain leading the ATPU worldwide with an estimated value of 196MB/month in 2010.

However, other platforms, mainly Android and Microsoft Windows Phone, will catch up as the gap in terms of user experience is narrowing quite rapidly. Android ATPU is currentIy at 148MB/month and likely to exceed 757MB/month by 2015. Android ATPU seems to be lower than that of the iPhone largely because Android is diluted across all market segments from low- to high-end smartphones. However, ATPU of the iPhone has been already surpassed by ATPU associated with some heavy-weight Android models that have recorded ATPUs exceeding the 200MB/month mark.

*This excludes mobile broadband traffic generated by laptops and other portable devices as well as Wi-Fi traffic offload that continue to represent the predominant majority of traffic generated by mobile phones.

Smartphone ATPU by region
    
 
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