In this report we show the findings of our 2012 UK mobile user survey. The report is a wide ranging analysis of the mobile market based on our consumer research, focusing on the competitive landscape among the mobile operators and smartphone manufacturers, and the changing consumer behaviour that has and will continue to impact the market
Recent news flow and feedback from media buyers indicates that growth in UK internet advertising is slowing due to the ongoing weakness in the economy
Paid search, buttressed by its link to e-commerce and measurable ROI, is suffering less than internet display, with growth in spend on social media slowing and price deflation especially for non-premium inventory
Online classifieds are also being hit by the economic woe, resulting in some sectors growing more slowly and non-advertising communications taking a larger share of spend; the secular shift to the internet continues
Apple has announced the features of the next version of iOS, the platform that runs the iPhone, iPad and iPod Touch. Key steps includes the replacement of Google Maps with Apple’s own mapping service, Facebook integration and expanded features for the Chinese market.
By replacing Google Maps, and in numerous smaller ways, Apple is starting to direct its users away from Google: a key theme across many new features is moving search and discovery away from raw web search.
Apple also announced a solid refresh of its laptop line (though the Mac business is now only 13% of revenues) and did not announce a new television product, despite frantic rumours that it would.
The Apple rumour mill turns to television, with widespread speculation that Apple will shortly announce… something, that will offer a different approach to the TV experience.
However, if Apple distributes TV content in new ways, it will need to work with existing channels and often pay providers, who are unlikely to enable fundamental disruption to their business models.
We see plenty of scope for Apple to make a great TV product – which need not necessarily be an actual television. But we see far less scope for it to break apart the value chain of TV content – and Apple doesn’t need to
Analysis of comScore data suggests that ad volumes fell in April on Facebook’s PC-based website in the US and UK, which we estimate account for 60% of ad revenue Seasonal effects may account for some of the decline, but increasing pressure on ad performance and pricing, due to the tough economic climate, and slowing growth in PC usage of Facebook are other probable factors As a result we expect Facebook’s ad revenue growth slowdown to continue in Q2, with audience saturation in key internet markets and increasing mobile substitution limiting future growth potential from display advertising
In the last few quarters the iPhone has grown to 50% of total smartphone unit sales in the USA, while smartphones overall are now around 42% of the installed base
In the last 12 months we estimate US mobile operators spent around $15bn subsidising iPhones, slightly under 9% of their revenue
The key factor driving increased US iPhone share is increased distribution: it was over two thirds of AT&T’s reported smartphone sales for each of the last 8 quarters, but AT&T only had a third of the market; when Apple added Verizon Wireless in Q1 2011 and Sprint in Q4, it immediately took over half of their smartphone sales as well, powering it to 50% of total US smartphone sales in Q1 2012
According to IABUK/PwC, internet advertising grew 14.4% like-for-like in 2011 to £4.8 billion, overtaking press to become the single largest advertising medium
Search was again the main growth driver, surging 17.5% to £2.7 billion last year, while display rose 13.4% and classifieds increased just 5.2% on the weak economy
We now forecast internet advertising will increase 14% in 2012 and 12% in 2013, taking spend to £6.1 billion or 36% of UK advertising, up from 30% in 2011
UK mobile advertising jumped 157% year-on-year to £203 million in 2011, marginally higher than our forecast of £180 million, with strong growth in both search and display
Mobile advertising now accounts for 6% of internet search and display spend, but still lags mobile devices’ share of internet consumption, which has been rising strongly due to rapid smartphone and tablet adoption, and we estimate is now at around 15%
We expect much of the lag between mobile’s share of internet consumption and ad spend to disappear over the next five years, indicating continued high growth
Google+, the social network, has around 100 million users worldwide, although user growth appears to have stalled and usage is low on weak network effects
Facebook users, now 70% of the adult internet audience (excluding China), have no incentive to switch to Google+, starving the social network of vital momentum
Facebook is likely to dominate socially enhanced search, unless Google+ takes off, which seems unlikely
In this presentation we show our analysis of revenue growth trends for mobile operators in the top five European markets (UK, Germany, France, Italy and Spain). The historical analysis is based on the published results of the operators, although they include our estimates where their data is inconsistent or not complete. A copy of the underlying data in spreadsheet format is available to our subscription clients on request.