Since data became available on mobile devices, personal communication, entertainment, and information consumption has been ever changing and mobile devices have become a necessity in our daily lives. In fact, mobile devices have become so essential that 2013 is set to be the year where the number of mobile Internet devices will even outnumber humans (CISCO: 2013).
Jumping on an emerging opportunity
Of the world’s six billion mobile phones, more than three quarters are located in the developing world. Analyst firm Ovum expects that there will be 1.6 billion new mobile connections across the world by 2017 – with Africa identified as the fastest growing region. Additionally, according to the GSMA, sub-Saharan Africa is expected to add 175 million new mobile users just in the coming three years.
These predictions make the emerging markets all the more appealing for mobile players of all shapes and sizes, including operators, handset manufacturers and mobile content and service providers.
Additionally, the companies that define our current age and the next generation, including Apple, Google, Samsung and Facebook, are looking to emerging markets for precisely this reason. While each has enjoyed massive success in building over a billion users’ worldwide, each company is now reaching a point of saturation – particularly within the developed markets where they enjoyed their initial success.
A point of convergence for all of the big players is that emerging markets hold the key to unlocking a new mass of customers, and it will be via mobile devices that they can connect with them. Essentially mobility will be the key to unlocking this customer base.
First foot forward
The first major finding from the research is that the popularity of Apple in the West is lost on consumers in emerging markets.The burgeoning opportunity in emerging markets mean that race to the next billion is already well underway. Apple is rumoured to offer a cheaper version of its iPhone, dropping its premium prices, in order to offer its iconic device to the masses. Similarly, Facebook has developed a ‘text-only’ version of the social network via Facebook Zero – which is free for users to use and access via their devices – while Nokia recently launched its 207 and 208 devices specifically targeting emerging market users.
However, while the competition heats up, bets on who will be most successfully in these regions should not be hedged on the current ‘winners’ in the West.
Upstream Infographic – Mobile in Emerging Markets (Click to enlarge)
Earlier this year we conducted some research with YouGov and Vanson Bourne looking at the mobile attitudes of emerging market consumers in Brazil, India, Saudi Arabia and Nigeria, polling their views on their favourite brands, types of content and openness to mobile advertising.
The results revealed in the Upstream Emerging Markets Mobile Attitudes Report, highlights the significant differences between the West and emerging markets consumers and what the recipe for success looks like in these new markets. Ultimately, the brands that have achieved major success in the West, such as Apple, will not necessarily reign supreme globally.
The winning formula
The first major finding from the research is that the popularity of Apple in the West is lost on consumers in emerging markets. In fact, on the wish list of handsets consumers would like to own in emerging markets, those developed by Apple (21 per cent) are typically the third most sought after.
The research uncovers Samsung as victorious in these regions, a brand favoured by almost a third of consumers (32 per cent). Nokia secures second place (22 per cent), which in part can be attributed to the investment it has made in emerging markets and lower cost handsets.
A widespread consensus exists that in order to successfully penetrate these regions and monetise the masses, brand must be able to market devices that are priced at $100 or less – thereby taking into account the purchasing power of emerging market consumers.
While a customer base exists for high-end devices, after the research uncovers that just over a third of consumers (34 per cent) would purchase a device from their favourite brand, regardless of price, to say that the majority of consumers would be prepared to pay the same would be misleading. It’s vital to remember that for consumers it’s not just the cost of the device that’s important – but the total cost of ownership – which includes call and data charges and possibly a lengthy contract.
Data demands
This year the GSMA predicted that data revenues are expected to overtake revenues from voice calls in both developed and emerging markets by 2018 as smartphones and tablets, especially budget models, become more dominant. Our research also found that consumers have a high propensity to purchase content and spend on applications. According to the findings, consumer monthly spend on mobile content and services in emerging markets reaches almost $1 billion.
Although there is a clear demand for data, the results show that consumers are prepared to spend money on all manner of products and services such as mobile banking, educational materials and health and agricultural information services that they can use in their daily lives. Apps related to education are of interest to over half of respondents (52 per cent), followed by business (47 per cent), then health (41 per cent), and almost one in five who would use their mobile to access political services (19 per cent).
According to the findings, consumer monthly spend on mobile content and services in emerging markets reaches almost $1 billion.
While there is a clear opportunity to provide content to this data driven audience, it is important to note the predominant App Store model simply doesn’t fit with emerging market expectations. Where only half of adults in the developing world hold a bank account and under one in ten own a credit card, numerous consumers in these regions cannot readily access the content and services on offer via an App Store model.
In fact, the majority of consumers polled (42 per cent) expressed an interest instead in being billed for content and apps by their Mobile Network Operator (MNO). Instead, the majority of users (31 per cent) would like to avoid long contracts and simply pay for data services through their mobile phone provider as part of a pre-paid or ‘pay as you go’ format.
First to the finishing line
Where others will fall at the various hurdles in the race to the new markets, MNOs are a step ahead with a unique advantage. Not only have consumers expressed a preference for paying for data services through their MNO, network operators actually own the most pervasive marketing channel in those markets to drive adoption for apps – the mobile phone itself.
As the research has shown, many consumers want to pay for data services in a pay as you go format – something that Apple’s app model does not complement. Where Apple and others will have to review its model to secure its next billion customers in emerging markets, the door lies open to MNOs to work with other handset manufacturers to build a more appropriate and effective model.
