Who’s got the Seven Year Smartphone Itch?

Remember 2007?  Kevin Rudd became Prime Minister of Australia, the final Harry Potter book was released and a U.S. college students’ social networking site called Facebook was opened to the public for the first time. It’s also the year Steve Jobs unveiled the iPhone, calling it “a revolutionary and magical product that is literally 5 years ahead of any other mobile phone”.

steve jobs iphone

Steve Jobs launched the first iPhone in January 2007

The iPhone’s immediate competitors at the time were the Nokia N95 and the Motorola Razr. The smartphone market totalled 64 million handsets and Nokia had more than 50% market share.  By the end of 2007 Apple had gained 5% of the mobile handset market and Google had announced the Android mobile operating system – a new approach that enabled vendors to use the Google operating system for free, instead of creating their own.

A lot can happen in 7 years. More than one billion Smartphones were sold in 2013 and smartphones now account for more than half of all mobile phone shipments globally. Since 2007 we’ve seen the mobile phone market completely transformed by market dynamics. New powerful players have emerged, minor players have become serious contenders and entrenched market leaders have all but disappeared.

Although the feature phone market continues to thrive in developing markets, global interest is almost completely focused on smartphones today.

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As you can see from the chart above, feature phones still make up just less than half of total mobile phone shipments, but profits related to smartphone data usage, app downloads and advertising, mean it’s the other half that attracts everyone’s attention.

The below chart illustrates the dynamic changes seen in the Smartphone Operating System market since 2007. The shrinking blue section is Symbian, dominating the market with Nokia devices back in 2007. Yellow is IOS, whose market share has remained relatively stable since soon after launch. The dark green is Android, starting slow but quickly commanding significant global market share. RIM is the shrinking red strip and Windows is made up of both the grey and then yellow strip at the top.

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The more recently emerging light green section labeled AOSP also represents Android devices, specifically low cost Android devices in China. Ironically, AOSP stands for Android Open Source Platform, although these handsets are actually blocked from running any Google services. AOSP devices are not reported by Google as Android activations, and Gartner has only just released sales data for these devices, so the light green section of the below chart has been an unreported black hole until now. As is very clear, it is a substantial black hole, with AOSP making up 41% of devices running an Android Operating System. This a huge chunk of the global smartphone market but for app developers, publishers and advertisers, it’s a chunk that requires a dedicated approach.   Chinese customers using AOSP devices access local app stores, rather than the Google Play store, and cultural and language barriers make it difficult for advertisers to extend their campaigns to reach this significant market presence.

Seven years ago we did not check Facebook on our mobile phones. Most of us had never even heard of Facebook and would have raised our eyebrows at the suggestion that a fledgling social network would soon have more than one billion active users via mobile phone!  Today 12 million Australians access Facebook, 9 million of them every day, and 7 million from their mobile phone.  Back in 2007 we probably had access to the internet at home and work, but having more than one internet connected device at home was unusual. Anyone with four internet connected devices at home was probably ‘working in computers’, but these days more than 1/3 of Australian homes have four or more internet enabled devices.

Aside from a handful of dedicated mobile phone geeks, we did not use our mobile phones to stay up to date with email, social connections or news.  We read newspapers and magazines on paper and used printed maps and guide books to find our way around.  The idea of shopping on a mobile phone was ludicrous, and although it was fun to take photos with your phone, we rarely sent them to anyone.  We certainly didn’t take photos of our food when we went out for breakfast, and we all still had digital cameras for ‘real’ photos.

Almost 70% of Australians now own a smartphone and our lives have been completely transformed by them. This has all happened in seven years. Imagine how different life is going to be in another seven. And another seven.  It seems likely that every home will have a tablet, phablet or other mid-sized device, an internet connected TV and at least 2 or 3 other internet connected devices. All of these devices will no doubt interact with each other. Many (most?) of us will be wearing at least one connected device which will help us in our daily routines. Recent research from Telstra identified that a third of Australians are already interested in wearable technology and 30% of 18-24 year olds would wear a smart watch.   There are plenty more applications of wearable technology and the next seven years will surely introduce us to a new version of reality.  The skeptical would do well to remember how they felt about smartphones seven years ago.  If history is any sort of basis for predicting the future, I predict we’ll soon be feeling the seven year itch to upgrade our smartphones to something a little more…. comfortable.



The above images use Gartner / IDC data and were sourced from The Guardian. You can read more about the Gartner data and the AOSP phenomenon in the Guardian article China drives smartphone growth – and low prices – As Android dominates.
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