Revenues in Brazil and China are growing 25% per year
The mobile internet already generates around US$ 700 billion in annual revenue in 13 countries, which represents around 70% of global GDP, equivalent to US$ 780 per adult, and has created jobs for around three million people. Mobile internet revenues will reach US$ 1.55 trillion across these countries in 2017, an annual increase of 23%. So says the report released by The Boston Consulting Group (BCG).
According to the study, revenues are growing especially in developing markets, driven by competition between the various mobile internet systems. Innovation and competition are leading to better devices and falling prices for consumers.
Mobile internet revenues in Brazil and China are growing at an annual rate of 25%, while in India it is growing at 40% per year, compared to the United States and the EU5 – European Union Five: France, Germany, Italy, Spain, United Kingdom. Even in more mature markets such as Japan and South Korea, mobile internet revenues are growing at 10% per year, much faster than the average global GDP.
The new BCG report, which was commissioned by Google, analyzes the economic impact of the digital economy related to mobile devices (such as smartphones, tablets and wearables) and excludes economic activity generated by the broader mobile technology industry, such as revenue generated by calls. telephone calls, "text messaging", the manufacture of non-Internet-enabled devices (very simple cell phones, for example), and the capital expenditures for non-digital data activities on mobile networks.
The 13 countries surveyed were: Brazil, Australia, Canada, China, France, Germany, India, Italy, Japan, South Korea, Spain, the United Kingdom and the United States. The biggest drivers of mobile internet revenue growth in the coming years will be applications, content and system service components, driven by the rapid expansion of e-commerce and advertising.
Consumers are by far the biggest beneficiaries of the mobile internet. Across the 13 countries studied, the consumer surplus is about US$ 4,000 a year, or seven times what consumers pay for devices and access. That is, the value that consumers themselves believe they receive is well above what they pay for devices, applications, services and access.
The mobile Internet consumer in the 13 countries has a positive balance of US$ 3.5 trillion per year. The largest aggregate surplus is consumer surplus in the US (US$ 827 billion) followed by China (US$ 680 billion). On a per capita basis, consumers in Japan, Germany, France and Australia together have mobile internet surpluses of more than US$ 6,000 per year.
"Competition across the entire mobile internet system is bringing innovation, growth, employment, and an experience of continuous improvement to consumers and businesses," said Dominic Field, BCG Partner and co-author of the study. “Increased access to mobile networks everywhere is driving new uses of the internet – from banking to education, from healthcare to service delivery – and delivering greater growth. growing mobile internet through proven policy objectives that encourage continuous improvement in these areas, as well as innovation, value creation and consumer well-being."
At all layers of the mobile system, there is competition between service providers, enabling platforms and application, content and service providers. Competition is particularly intense and evolution especially rapid between device manufacturers and operating system companies. As recently as 2010, the BlackBerry and Symbian platforms accounted for more than half of all smartphone sales in the 13 countries surveyed; they now represent less than 5%. Today, Apple's iOS, Google's Android and Microsoft's Windows Phone systems are fighting for market share, keeping an eye on newer competitors such as Amazon's Fire OS, Nokia's X platform, Xiaomi MIUI, Firefox OS, and Tizen, which are increasing competition and user choice. All of this leads to faster innovation, more devices and lower prices.
A big part of the mobile internet success story is the rise of economic activity with apps. There have been more than 200 billion downloads from various app stores since the first app was developed in 2008. More than 100 billion downloads occurred in 2013 alone. Major app stores paid more than US$ 15 billion to developers between June 2013 and July 2014. "The growth of the mobile internet economy is driven by increased availability and affordability, as well as advances in technology and infrastructure," said Paul Zwillenberg, BCG Partner and co-author of the study. "The rapid increase in the availability of cell phones – the most affordable ones costing US$ 100 or even less – will lead to both greater penetration and new uses." He noted that while only about 20% of 2013 smartphones were priced below US$ 100, a rapid movement made up of global, local and new producers are now releasing affordable smartphones.
The vast majority of consumers in the 13 countries surveyed would no longer have access to offline media (the only exception being TV) before losing their access to mobile internet. Two-thirds or more would give up chocolate and alcohol. More than half are willing to give up coffee and movies. A third would be willing to give up their cars, and more than a quarter would stop having sex, before losing their mobile internet access. click here to learn more about the report
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