ITEM: Newly released data from the research arm of the GSMA pegs Asia as the key growth engine for the global mobile ecosystem, while cellco revenues are shifting from traditional voice and SMS services to platforms and content. Also, smartphones rule, the internet is literally mobile, and artificial intelligence is the technology that will kick the mobile sector up a few gears.
The first annual “Global Mobile Trends” report from GSMA Intelligence on the current state of the mobile ecosystem and its future development covers a lot of ground, starting with the finding that Asia-Pacific truly is where the growth is in the mobile sector will be centered over the next four years – and it’s not all thanks to China:
More than one billion additional people worldwide will be connected to mobile networks by 2020. Approximately a third of these new users will come from India (337 million), underlining the country’s increasing position as the world’s most significant mobile growth market, overtaking China. China is forecast to add more than 200 million subscribers and there will also be major net subscriber contributions from Indonesia, Pakistan, Bangladesh and Myanmar. In total, these six Asian markets will account for approximately 60% of the 1.1 billion new subscribers added globally by the end of the decade.
The GSMA report also reports that worldwide mobile services revenue will grow just 2% annually from now to 2020 as the industry undergoes a shift from traditional revenue sources to platforms and content. According to the report, subscriber growth is slowing down, as is organic revenue growth. The good news is that’s being offset by new revenue opportunities from growing mobile internet adoption and the move to higher-speed networks.
For example, while voice, SMS and mobile data will generate over $1.5 trillion in annual revenue by 2020, those services – which account for 41% of overall mobile revenue now – will account for 38% by 2025. Compare that to revenue from OTT content services like Netflix and Spotify, which will grow from 3% of ecosystem revenue today to 17% by 2025.
Meanwhile, the “mobile-first” and “mobile-only” internet usage trend is going to continue to grow. Currently, 46% of the global population uses mobiles to access the internet – that figure is expected to increase to 60% by 2020, not least because of the growing availability and affordability of 3G/4G devices.
Indeed, the GSMA report claims that “smartphones may now be the most commonly owned consumer electronics device”, at least in developed markets where smartphone growth has plateaued. (For example, smartphone penetration is past the 80% mark in some Asian markets like South Korea and Singapore.) Penetration in lower-income markets is much lower, but that’s going to change fast as handset prices keep dropping:
… the smartphone adoption rate in India stands at only 25% and unit volumes are growing by 30% a year. The study predicts that several low-income countries (with per capita GDP below $10,000) will have smartphone adoption rates of 60–70% by 2020, similar to most advanced regions and creating a new base of mobile internet users. This trend is being driven by continued decreases in device costs and rising incomes.
The other chief megatrend highlighted in the report is artificial intelligence (AI), which is emerging as the catalyst that will accelerate a number of emerging sectors, including connected cars and smart homes:
Personal assistants (or bots) will be one of the early battlegrounds in AI led by the likes of Apple’s Siri and Amazon’s Alexa. These services are providing the “voice interface” that can coordinate devices and data across a broad range of applications, creating voice-controlled hubs, with Amazon Echo and Google Home as examples. An ecosystem of AI-focused companies is emerging, comprising both established firms and start-ups. AI attracted $2.3 billion in venture capital last year and is also a major focus of current merger and acquisition activity.
The “Global Mobile Trends” report is available as a free download here.