WILL SMARTER PHONES DRIVE CONTENT CONSUMPTION?

M:Metrics While smart-phone owners comprise a small percentage of the overall population of mobile phone users, large percentages of smart-phone users are consuming mobile content. Contrary to popular belief, those carrying these powerful devices are not using them exclusively for productivity applications, but are also using them to view mobile video, play mobile games and listen to mobile music in addition to using them for personal e-mail and wireless Web access.

Table 1: Smart-phone penetration and consumption
Country	Smart-phone penetration	Played downloaded game	Watched mobile video	Used E-mail	Listened to mobile music	Sent photo or video over network	Accessed news and information
France	3.4%	12.0%	15.1%	20.3%	18.7%	45.7%	39.1%
Germany	5.8%	15.5%	7.7%	18.9%	19.9%	33.7%	22.3%
United Kingdom	6.6%	23.0%	9.1%	20.9%	24.8%	47.3%	39.7%
United States	2.0%	22.3%	8.8%	50.8%	16.1%	22.8%	54.6%

Source: M:Metrics, Inc., Copyright © 2006. Survey of mobile subscribers. Data based on three-month moving average for period ending 31 May, 2006, n= 12,631 French, n=15,122 German, n=14,913 UK, n=33,952 U.S. mobile subscribers.

Compared to the average mobile phone subscribers, smart-phone owners are avid users of mobile multimedia. In France and Germany, nearly half of smart-phone owners sent video or a photo over the network, compared with a market average of 18.6 percent in France, and 19.5 percent in Germany. Nearly a quarter of UK smart-phone owners reported listening to music on their handset, versus the average of 5.8 percent. The parallels are similar across the geographies. French smart-phone owners are a staggering 11 times more likely to listen to music on their handset compared with the market average of 1.7 percent, while their American counterparts are more than eight times more likely to do so.

Video has been particularly popular among French smart-phone owners, at 15.1 percent, versus a countrywide average of 1.8 percent. There is also a relatively high conversion rate to video among U.S. smart-phone owners, who are more than six times more likely to watch video than a random subscriber, as the U.S. average for video consumption is 1.3 percent.

Whereas mass-market Symbian devices have flooded the European market, the smart-phones in the hands of most U.S. consumers are high-end devices produced by Palm and RIM that are targeted to appeal to mobile professionals concerned with personal productivity. The Motorola Q, which is being marketed heavily as a stylish device that's fun as well as productive, and is being offered at consumer-friendly price points, could help broaden the market for smart-phones and spur content consumption.

At two percent penetration, the U.S. lags Western Europe in Smart-phone ownership. Britain tops France and Germany, at 6.6 percent market adoption. All the top three devices in France, Germany and the United Kingdom are Nokia devices. The Palm Treo is the smart device of choice for Americans, followed by the BlackBerry.

May Benchmark Survey. Publ 20060710