The mobile revolution has been dubbed by many as the trillion dollar revolution. While it is still hard for anyone to quantify the overall economic impact of the mobile revolution, it is clear that mobile devices and apps are changing every aspect of our lives. From news consumption, to photo sharing, to gaming, to hailing a cab to depositing a check, every moment has become a mobile moment. In fact, most consumers who have a smartphone or a tablet can’t imagine their lives without these devices and apps. We have become addicted to instant gratification and the back pocket proximity of powerful computing technology.
At Flurry, we have been at the epicenter of the mobile revolution for more than five years now and today we see activity from more than 300,000 apps and three billion app sessions every day, giving us a unique vantage point into the behavior of over a billion worldwide mobile consumers.
Today, SourceDigital13 we are sharing a peek into a day in the life of a U.S. adult mobile consumer. (We'll blog some other parts of my keynote in future posts.) For this depiction (see chart below), we have used a random sample of 15,271 U.S. iOS users and we measured their app usage throughout the month of May, 2013. We also cut the data based on a 24-hour cycle to help understand the usage throughout an entire day.
Daytime, Nighttime and Bedtime Are All Apptime
Many conclusions can be drawn from this chart. Here are a few key observations:
- App usage steadily increases over the course of the day and ultimately peaks in the evening (unlike TV which remains low then has a dramatic jump in the evening.) This is a big change of perspective for media planners who have been used to weighting their budgets toward evening TV. In an app-centric world, that spend could effectively be spread throughout the day given consumers are reaching for their devices consistently throughout their waking hours.
- Wearable computing already arrived with the smartphone. Our data confirms what many of us know from experience: smartphones, tablets and the apps installed on them appear to be glued to consumers 24/7, 365. They are with us when we wake, work, exercise, eat, play and yes, even when we sleep. We have entered the era of “wearable computing” without needing the wearable gear. Even ahead of the mainstream adoption of Google Glass or Apple’s rumored wrist device, consumers are already embracing the wearable lifestyle with smartphones and tablets.
- While gaming still consumes a large portion of the time spent on devices, other categories appear to be closing the gap when it comes to consumer attention. With the proliferation of social and photo sharing apps, consumers are switched on and sharing every aspect of their lives.
- Shopping and lifestyle apps are used around the clock. Breakfast time, lunch time, dinner time and bedtime have become shopping time.
Millennials Just Might Surprise You
We drilled further into the app usage of young adults age 25-34, a highly-desired segment for brands and advertisers. That segment of the population enjoys high disposable income and has traditionally been a prime target of CPGs, travel, entertainment and retailers.
In the next chart, we have analyzed how app usage by this group indexes against the overall population. (In this chart, 0% represents average usage across all age groups. Positive percentages reflect the degree to which app usage for the 25-34 year old age group exceeds that of iOS users in other age groups.) The results surprised us.
Given the popularity of game apps you might expect that Millennials drive that usage, but in fact they under-index for game app usage. It’s turns out that it’s the middle aged Gen X-ers who grew up with gaming consoles who are over indexing on games. Millennials also under-index on time in Utilities and News than the rest of the population. The categories in which Millennials over-index are Sports, Health and Fitness; Music, Media and Entertainment; Lifestyle and Shopping.
We then went one step further to break down gender usage within the 25-34 age group. The results are shown in the chart below.
Females age 25-34 dramatically over index in the Sports, Health and Fitness category. They spend over 200% more time in these apps then the rest of the population. Women gravitate toward self-improvement related apps while men gravitate toward entertainment. Males age 25-34 over index in Music, Media and Entertainment as well as Social and Photo-Sharing. They under-index in News & Magazines. Confirming some age-old stereotypes, women 25-34 also over-index in Lifestyle and Shopping in which they spend 75% more time than the rest of the population.
Even with more than a billion worldwide active devices, we are still in the very early days of the mobile consumer age. New apps and experiences are emerging daily. In the blink of an eye, experiences such as Ubering (the new verb for ordering a cab using the popular Uber app) and Snapchatting (in reference to using SnapChat to exchange ephemeral photos and videos) have arrived in the mainstream of society and soon, we predict, the English dictionary. Just three years ago these experiences, 100% powered by our mobile devices, didn’t even exist.
Many things will change over the next few years but we predict that mobile devices will become even more a part of the fabric of society than they are today. That means marketers and advertisers need to learn how to make mobile a central part of their marketing and media plans, not just an afterthought.
Flurry measured a 47% increase in active smartphones and tablets in the United States between April of 2012 and April of 2013. While that number sounds impressive, it actually puts the U.S. in the bottom 5% of countries for connected device growth in the past year. Worldwide, growth of these devices is exploding. To be in the top 5% of countries for growth over the past year, a country’s number of active connected devices needed to more than triple.
There are currently more than one billion active smartphones and tablets globally, and based on current growth rates we expect to reach two billion in 2014. In this report we discuss which countries are growing fastest, and the implications for the mobile ecosystem and for society more generally.
Huge Potential for Future Growth
The reason even 47% growth puts the US near the bottom of countries for tablet and smartphone growth becomes clear from comparing the size of the connected device installed base and population in five countries.
Let’s start by considering China and the U.S. These two countries currently have a similarly sized connected device installed base, but China has more than four times as many people.Combine China’s largely untapped population with its rapidly growing incomes (increasing at a rate of 8-10% a year between 2009 and 2011, according to the World Bank), and it’s not surprising that the connected device installed base in China grew by 149% between April of 2012 and April of 2013.
We expect these same forces to continue fueling growth in connected device numbers in China, and given the size of the Chinese population, those numbers could add up quickly. For example, if penetration of smartphones and tablets in China grew to that of Malaysia then 210,507,168 additional connected devices would be added to China’s installed base. We chose Malaysia as a point of comparison because it has a large Chinese population and per capita incomes where China’s are likely to be in the not too distant future.
Canada and India provide an even more dramatic comparison. They currently have similarly sized installed bases of smartphones and tablets, but India’s population is 36 times as big as Canada’s. Of course, India’s device penetration won’t catch up to Canada’s overnight, but when India’s rate of penetration equals the current rate in China, then 197,561,626 additional devices will be added to the worldwide installed base. Given India’s connected device installed base grew by 160% in the past year, we don’t think that’s going to take that long to happen.
For those keeping count, that means that the world’s number of connected devices will increase by more than 400 million (or about 40%) when the rate of penetration in India reaches the current rate of penetration in China, and the rate of penetration in China reaches the current rate of penetration in Malaysia.
100%+ Growth is the New Normal
India and China’s large populations make them dramatic examples, but their rates of growth don’t even put them at the top of the charts.Use of smartphones and tablets grew in every country in the world last year except for the three (The Central African Republic, Niger, and South Korea) shown in red in the map below. South Korea was one of the earliest adopters of mobile technology, and it appears that its market is now saturated. The countries in orange (mainly the English speaking countries, Western European countries, and the most connected parts of Asia) are other early adopters of mobile technology. Those markets still grew at rates of up to 99%, but a lot of that growth was the result of people adopting tablets as second devices.
The countries in yellow and green all saw their mobile installed bases more than double in the one year period between April of 2012 and April of 2013.That phenomenal rate of growth is all the more impressive considering what a large proportion of the world’s land mass and population those countries represent. The mobile markets of all of the large BRIC countries (Brazil, Russia, India, China) grew by between 100 and 199% (the growth rate for the yellow countries on the map). Much of the rest of South America and parts of Africa also grew at that same rate.
The number of active connected devices in countries in green in the map grew at 200% or more in the year to April 2013; those shown in the darker green had growth of 300% or more. Many of these hyper-growth countries are relatively small and not particularly affluent, so their fast growth in the past year may be a reflection of their wireless infrastructure catching up enough to allow their citizens to participate in the mobile revolution.
Implications for the Mobile Ecosystem
The discussion up to now clearly points to rapid growth in the connected device installed base coming predominantly from countries that have a lot of headroom for growth because their current rate of penetration is relatively low. That has the potential to change the foundation of the mobile ecosystem. We have become used to a world in which connected devices are reasonably expensive and replaced fairly frequently, and in which apps for those devices are developed by people in relatively affluent countries. As we look toward the connected device installed base doubling to more than two billion, we expect more of a focus on lower-cost devices that are also possibly more robust (to allow for less frequent replacement since that may be unaffordable in lower income countries). We also expect to see greater diversity of apps and app developers as apps are developed to meet the needs of increasingly diverse device users.
Things get even more interesting when we consider what people might be doing with all of those devices. Of course, they will still provide communication and entertainment, but we expect mobile devices to play an increasingly large role in many aspects of life including enabling commerce in growing economies, facilitating medical care in remote areas, and ensuring that people throughout the world have access to world-class educational resources. We can’t wait to see what else the next billion smartphones and tablets will be used for!
The app revolution has changed the way software is distributed and used among consumers. With a perfect storm of digital distribution, free content and powerful touch screen devices, the success of mobile apps has disrupted industries from telecommunications and games to music and news. To date, no category of apps has been more successful than Games, directly disrupting the traditional gaming industry. Flurry recently wrote about the impact iOS and Android game popularity has had on Sony and Nintendo. And with low barriers to entry for armies of entrepreneurial developers, indie game developers continue to thrive on iOS and Android.
Something Disruptive This Way Comes
Consider for a moment Facebook’s speedy billion-dollar acquisition of Instagram, a service that succeeds by delivering Facebook’s core value proposition of photo sharing, but only on mobile. When one understands that consumers now spend more time in mobile apps than they do online, Instagram’s value begins to make sense. With over 500 million iOS and Android devices in the market, mobile apps are the new battleground for consumer engagement. If Facebook feels compelled to snap up Instagram in this way, perhaps this is an indication of how relevant social networking has become in mobile apps, or simply how relevant mobile has become overall. In this report, Flurry focuses on the rise of the Social Networking category in mobile apps. Let’s start by looking at where consumers spend their time by application category.
In the chart above, Flurry compares the time consumers spend across different application categories when using smartphones. Starting on the left, we look at the average number of minutes a consumer spent each day, over the course of Q1 2011, across different app categories. For this period, we calculated that consumers spent 25 minutes (37%) of their app-using time in Games. They additionally spent 15 minutes (22%) of their time in Social Networking apps. News and Entertainment were the next most popular categories, garnering an average of 11 (16%) and 10 (15%) minutes per day, respectively. All other categories combined made up the final 7 minutes (10%) of time. During Q1 2011, Flurry tracked approximately 30 billion application sessions worldwide.
On the right, we conduct the same analysis for Q1 2012. Compared to the same quarter in 2011, time spent per consumer each day increased from 68 to 77 minutes. Additionally, the distribution of time spent per category shifted. Games usage dropped by 4% down to 24 minutes per day, while Social Networking increased by 60% up to 24 minutes per day. Games and Social Networking categories each controlled 31% of consumers’ time. News, Entertainment and Other categories commanded 12 (15%), 10 (13%) and 7 (9%) minutes, respectively. Flurry tracked approximately 110 billion application sessions during Q1 2012.
The most significant trend is that, for the first time in the history of applications (Flurry began tracking application usage in 2008), another app category is rivaling Games. We take the rise in Social Networking apps as a signal of maturation for the platform. As game demand may be hitting its saturation point, consumers are also discovering other apps, namely Social Networking. The year-over-year growth in Social Networking has been staggering. Not only has time spent increased by 60%, but also within a growing amount of total time spent in smartphone apps among consumers, from 68 to 77 minutes, or a growth rate of 13%.
Money Pools Where Audiences Aggregate
Through its mobile app traffic acquisition network, Flurry AppCircle, the company can also see how apps with growing audiences earn revenue through advertising. When app developers amass larger audiences, among the chief ways to monetize their businesses is by showing ads to their consumers. In the chart below, we show revenue earned by publishers in the Flurry AppCircle ad network for each of the last three months. Flurry AppCircle reaches over 300 million unique devices per month, making it one of the industry’s largest ad networks by reach. The columns in the chart grow from month-to-month at the same proportion as AppCircle publisher revenue growth. From just February to April of this year, Flurry AppCircle publisher revenue has grown by 23%. Please note that we forecast the remaining few days of April for the chart below.
From inspection, ad revenue in apps is driven primarily by Games and Social Networking categories. In other words, audiences using these apps a combination of the largest and most receptive to ads. For February, March and April, Games apps earned 35%, 35% and 36% of total ad revenue in the AppCircle network. Over the same three months, Social Networking climbed from 24% in February to 25% in March, and then to 37% in April. This is the first time in Flurry’s history that any category has surpassed Games in ad revenue generated (Flurry launched AppCircle summer 2010).
SoLoMo Not So Loco?
Over the last couple of years, the term “SoLoMo” was coined to describe the convergence of social experiences on mobile devices that leverage some element of proximity (i.e., location) to the experience. While a Silicon Valley term in origin, it speaks to the new consumer experiences possible when dreaming up any combination of these three factors. Phones are powerful, connected and always with consumers. And they are considered personal devices that easily enable sharing of personal content and information through apps. Build a clever app that leverages these aspects in a compelling way, and you could have the next Pinterest or Instagram.
As business ventures, the ability for Social Networking apps to engage consumers in a meaningful way is driving a wave of investment and bullish valuations. Social networks like Pinterest, Path and Skout are raising major venture capital rounds. This month, Andreessen Horowitz invested $22 million into Skout, and Greylock and Redpoint helped plow $30 million into Path. Pinterest, which has a strong mobile component, has become the third most popular social network behind Facebook and Twitter, and ahead of LinkedIn, Tagged and Google+. With so much innovation, coupled with high engagement among consumers, this appears to be only the beginning.
Games Don’t “Like” Social Networking Apps
The rise of Social Networking apps also signals the end of the era of gaming dominance within mobile apps. While the free-to-play business model performs extremely well, enabled by in-app-purchases, it does so primarily for simulation games, a sub-genre of the total games category. As long as the total iOS and Android installed base grows, all categories will continue to grow naturally. However, as we reach saturation for mobile gaming on a per user basis (one consumer can play only so many free-to-play games), the Games category could start behaving more like a “zero sum game” from here on out, meaning that game companies would have to fight over a finite group of consumers in order to grow their businesses. For one app to grow, it would have to take from its competitors. Even with an influx of new consumers into the market, the expected would-be casual gamers will be increasingly wooed away from games by compelling Social Networking and other apps. Going forward, the Games category will have to look to innovate on mobile to maintain its dominance and growth.
A Note about Methodology
For the comparison of minutes spent in this blog post, it’s important to clarify that these figures exclude tablet usage, and focus on smartphones only. While Flurry calculates that consumers spend an average of 94 minutes per day using mobile apps, that figure is a reflection of total usage spread over both smartphones and tablets. When we isolate just smartphone usage, as we’ve done in this analysis, the number of minutes spent on apps is lower.
Although the Internet entered the mainstream a mere 15 years ago, life without it today is nearly incomprehensible. And our use of the web has rapidly changed as well. In simple terms, it has evolved from online directories (Yahoo!) to search engines (Google) and now to social media (Facebook). Built on the desktop and notebook PC platform, the web’s popularity is significant.
Today, however, a new platform shift is taking place. In 2011, for the first time, smartphone and tablet shipments exceed those of desktop and notebook shipments (source: Mary Meeker, KPCB, see slide 7). This move means a new generation of consumers expects their smartphones and tablets to come with instant broadband connectively so they, too, can connect to the Internet.
In this report, Flurry compares how daily interactive consumption has changed over the last 12 months between the web (both desktop and mobile web) and mobile native apps. For Internet consumption, we built a model using publicly available data from comScore and Alexa. For mobile application usage, we used Flurry Analytics data, now exceeding 500 million aggregated, anonymous use sessions per day across more than 85,000 applications. We estimate this accounts for approximately one third of all mobile application activity, which we scaled-up accordingly for this analysis.
Our analysis shows that, for the first time ever, daily time spent in mobile apps surpasses desktop and mobile web consumption. This stat is even more remarkable if you consider that it took less than three years for native mobile apps to achieve this level of usage, driven primarily by the popularity of iOS and Android platforms. Let’s take a look at the numbers.
The preceding chart compares the average number of minutes consumers spend per day in mobile native apps vs. the web. For mobile apps, Flurry tracks iOS, Android, BlackBerry, Windows Phone and J2ME. And for the web, our figures include the open web, Facebook and the mobile web.
Flurry found that the average user now spends 9% more time using mobile apps than the Internet. This was not the case just 12 months ago. Last year, the average user spent just under 43 minutes a day using mobile applications versus an average 64 minutes using the Internet. Growing at 91% over the last year, users now spend over 81 minutes on mobile applications per day. This growth has come primarily from more sessions per user, per day rather than a large growth in average session lengths. Time spent on the Internet has grown at a much slower rate, 16% over the last year, with users now spending 74 minutes on the Internet a day.
As a note of interest, Facebook has increasingly taken its share of time spent on the Internet, now making up 14 of the 74 minutes spent per day by consumers, or about one sixth of all Internet minutes. Considering Facebook’s recent leak regarding Project Spartan, an effort to run apps within its service on top of the mobile Safari browser, thus disintermediating Apple, it appears Facebook seeks to counter both Apple and Google’s increasing control over consumers as mobile app usage proliferates.
Games & Social Networking Dominate Mobile App Usage
With mobile app usage soaring, Flurry additionally studied which categories most occupy consumers’ time. For this snapshot, Flurry captured time spent per category from May 2011 across all apps it tracks, now totaling more than 85,000. The results are shown in the pie chart below.
The chart clearly shows that Games and Social Networking categories capture the significant majority of consumers’ time. Consumers spend nearly half their time using Games, and a third in Social Networking apps. Combined, these two categories control a whopping 79% of consumers’ total app time. Further, as we drill down into the data, consumers use these two categories more frequently, and for longer average session lengths, compared to other categories. Any way we slice it, Games and Social Networking apps deliver the most engaging experience on mobile today.
With a better understanding of how consumers spend their time across app categories, Facebook’s Project Spartan makes even more sense. As a category, social networking – which is Facebook’s core competency – commands the second largest allocation of consumers’ time. Games, which typify the most popular kind of app played on the Facebook platform itself, are also the top categories on both Android and iOS platforms. As interactive media usage continues to shift from the web to mobile apps, one thing is certain: Facebook, Apple and Google will all expend significant resources to ensure that no one company dominates owning the direct relationship with the consumer.