The Money And The Numbers In Mobile

Late last year in this column, we reviewed in some detail the amount of money being spent on mobile for 2011. Now that we’re about halfway through this year, we thought it would be worth taking a snapshot look at the current state of mobile spending.

To be sure, money is being spread around a range of areas that touch on mobile, including advertising, marketing, games, apps, coupons, and the acronym-challenged quartet of SMS, MMS, 2D and NFC.

To say all research shows agreement on the state of any given part of the market would be a stretch. For example, one survey by the Pew Research Center found that 65 percent of tech experts said that within the next eight years, most consumers would fully trust and embrace smart devices and mobile wallets with cash and credit cards being replaced in leading markets. But that same survey found that a third believed exactly the opposite -- that mobile payments will not gain because of security concerns and privacy issues.

But while the longer-term prospect of mobile are continually open for dispute, some of the shorter-term spending patterns can provide at least some indications of where things are headed. So here’s a look at some of the current estimates of spending around mobile:

  • $1.6 billion in mobile ad revenue. This is where last year ended -- an increase of 149 percent from the previous year, says the Interactive Advertising Bureau.
  • $11.6 billion in advertiser spending on mobile media this year. This Strategy Analytics estimate of the amount being spent is substantially lower than consumer spending -- a statement on how marketing budgets are being allocated.
  • $26.1 billion in global consumer spending on apps. Increasing by almost a third over last year, apps also provide a platform for advertisers, with in-app advertising reaching $1.7 billion, compared to $935 million for mobile Web display ads in the U.S. and major Western European markets, says Strategy Analytics.
  • $138.2 billion in consumer spending on mobile media this year. The majority of this spending comprises data plans and Web browsing, according to Strategy Analytics.  A key driver is the growth of mobile apps, expected to increase 38 percent to more than 32 billion this year.
  • $930 billion in mobile payments in three years. Growing at close to 100 percent a year over the next three years, mobile payments will be fueled by the increase in the number of smartphones and tablets, according to research from KPMG. Mobile commerce is clearly on the rise in a very big way.
  • $1.5 trillion in worldwide mobile operator revenue by the end of this year. Fifty carriers will generate more than $1 billion each in annual data revenue, says the Chetan Sharma Consulting forecast. The top 10 operators worldwide control 42 percent of global data mobile revenue. While the U.S. market has only six percent of all subscriptions, American operators take in 26 percent of data revenue.

While a quick glance at a few of the dollar numbers being allocated to mobile provides a general idea of the scope of money involved -- we’re looking at billions here, not millions -- there are plenty of other numbers without dollars attached that provide yet more indicators. Here are a few:

  • 630 million NFC (Near Field Communication) enabled phones shipping in three years. This would be an increase from 44 million NFC phones shipped last year, according to KPMG.
  • 23 billion tickets delivered to mobile phones within four years. This would be an increase from four billion delivered last year, says Juniper Research.
  • 61 percent of U.S. households have Wi-Fi. That may sound like a lot, but other countries are higher. To wit: South Korea 80%, U.K. 73%, Germany 72%, France 71%, Japan 68% and Canada 68%, according to Strategy Analytics. The world is becoming wired.
  • 10 billion mobile connections by 2016. This would be a rise from the 6 billion connections today, but Cisco is also predicting roughly a doubling of overall data consumption each year until then, with video accounting for 71 percent of all mobile data.

No matter how you look at it, the numbers around mobile just keep getting bigger.

Tags: mobile
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1 comment about "The Money And The Numbers In Mobile".
  1. Andrew Koven from Geoff & Drew's , May 10, 2012 at 10:37 p.m.
    Excellent post from Chuck Martin as always!