Categories

Phone Tipping Point Countdown Reset

comScore’s latest survey data is in and the news is good.

In March an additional 3 million Americans became smartphone users. That translates to 700,000 every week or 100,000 every day switching from a non-smart or feature phone to a smartphone.

The smartphone is now in use by 31% of the phone users in the US. A year ago 80% of Americans did not use a smartphone. Today non-consumption is down to 69%.

It also means that only 19% more penetration remains before half of the population is using smartphones and that penetration is increasing at an average of 1.3% per month.

I reset my Phone Tipping Point countdown clock to reflect the new data.

I call it the Phone Tipping Point because it’s the moment when I expect we’ll stop using the word “smartphone”.

It’s nearly one year away.

  • Jacob W

    That’s a fair bit for a few off months. What is the biggest month for turnaround? January or December?

    And do you think with more Androids, and the new iPhone 5 this summer. Whether it will have larger growth and shorten your clock’s count? If so, by how much?

    My prediction is that it can help speed the count to March at least.

    • Famousringo

      Newer, better devices will of course increase adoption, but I think the biggest barrier to adoption in most markets today is the cost of a data plan.

      We're starting to see a little downward price pressure in Canada. Two years ago, a premium smartphone used to require a three year $70 contract. Now you can get one for less than $60.

      The popularity of the iPhone has also driven an impressive network buildout here beyond what Blackberry could encourage. The more places you can use your device, the more that device is worth.

  • Iosweeky

    Its interesting that more and more Americans are moving to an even higher monthly contract that smartphones require. Might be a good time to go long on cellular network operators (can't believe I just said that).

    I wonder what is suffering from the opportunity cost of that increased spending?

    Maybe it's part of the reason for people making less PC purchases over the last year, people have a set amount of discretionary income and are choosing to spend it on a smartphone+higher monthly contract, and forgoing the PC upgrade (a good choice in my opinion).

  • Hamranhansenhansen

    I already stopped using "smartphone." It is such a made-up term in the first place, but it has changed meanings so many times and includes such different devices that it's basically disingenuous to use it. A BlackBerry flip phone is included because it has email, but an iPod touch is excluded even though it has FaceTime, Skype, Web browser, iPhone apps. Is a user with a Mi-Fi and an iPod touch running Skype with a Skype number really less "smart" than a user with a "smartphone" with no data plan? Or a user with a BlackBerry "smartphone" with a 2 inch screen? And a lot of smartphones are just smarter feature phones: free, no data plan, no system upgrades, Java applets, and the user uses them almost exclusively for calls. There are a lot of Android "smartphones" that cannot even run Angry Birds, which is a very basic smartphone game.

    Also, with Apple taking the majority of all phone profits, it's clear that the smartphone is not a niche. When you look at the whole market and see the profits are Apple at 50%; Nokia at 25%; RIM at 15%; and everyone else at 10% … I think that is the most important stat in mobile. That is the actual scoreboard. That explains why Apple is so dominant, why Nokia didn't go to Android, why Nokia and RIM's lack of a good iPhone response seems suicidal, why the Windows/Android generic model is questionable even when they have a lot of users.

    And many phone makers have switched a free feature phone line over to a free Android phone and it looks like their "smartphone market share" has jumped, but any feature phone maker could play that game, it doesn't mean any consumer was clamoring for their smartphones any more than before. Users are using these phones the same way they used their feature phones, which is why Android is so absent from Web server logs.

    I know that when I see stats from the entire phone market it just looks honest. Seeing iPhone at 30% (of smartphones) looks wrong, but seeing it at 5% (of all phones) looks right. Ironically, the 5% stat looks bigger. After 4 years, with basically one model, to be 1 out of every 20 phones is incredible.

    As for the tipping point, I would be more interested in "phones with HTML5 browsers" than "smartphones." Or "phones with 3G/4G data plans" or "touch phones" or "phones with native C apps" because that is real information. Without an HTML5 browser, you are a feature phone to me. Without touch, you are maybe 1/20th of a smartphone. Without native C, you cannot really replace a computer. Without a data plan, you are less than an iPod touch.

    • chandra2

      By 'phone', it is normally meant a cell phone. Let us go with it. It is smart if it has a computer alike capability to run a variety of applications ( not just email or messaging). It should have wi-fi connectivity . That is about it. I do not think one should insist on a 3G data plan for it to be called a smartphone. iPod touch with cell phone, if such a device existed, is a smartphone in my view..

    • r00tabega

      I prefer "touch phone" as a category… because it's a tangible difference.

      I had a treo 600 about 5 years ago, and I liked it best when I could use my finger for navigation (not always possible due to small UI elements).

      The iPhone, Android and Pre have just taken it to the next level. It's not that they're just smart… they're usable.

      • Marc in Chicago

        Be careful with the touch requirement. Perhaps all smartphones should have touch screens, but not all touch-screen phones are smartphones. There are touch-screen phones that are simple feature phones.

  • chandra2

    I wish the carriers will sell a smart phone without mandating a data package. That may increase the cost a bit. It will be great to have the iPad model. Sell a smartphone without a mandatory data package, just voice. People should be able to buy data on a monthly basis as and when they need it. Are there plans like that for any of the smart phones?

    • Steko

      What's more attractive for me is the data package without a voice plan (just skype or whatever). That's similar to the ipad terms but I'd like one dumb pipe data plan that covers any and all devices I own.

    • Marc in Chicago

      Agreed. I've long desired a voice- and SMS-only plan on an iPhone. That way I can save money on monthly charges by using my home Wi-Fi for data.

      However, I'd never considered an optional, month-to-month data plan. That would be awesome! The problem is that if it's anything like AT&T's iPad 3G plan, the reception will be horrible.

    • chandra

      Emigrate just about anywhere outside the US and Canada and you can buy what you like.

    • raycote

      I bought my wife an LG Android ($200 full retail) phone for christmas. Why Android? Because she insisted on Android? No, because she wants a CHEAP no data plan phone with a touch interface. She uses it as a prepaid unit for $10 a month. She has the simple touch interface she wants and full access to all other functions via wi-fi. If she needed a data plan she would insist on an iPhone as she already has a 3G iPad which she loves.

      I wonder what % of cheap Android phones serve this no data plan demographic?

      • chandra2

        Thanks raycote . That answers my question. No data plan + prepaid is a combination that may sell well in countries where ( post paid + contract + subsidy ) model is not a high runner. And that may be where the growth is beyond this 'tipping' point. And iPhone does not play in that segment which worries me as an Apple shareholder.

  • @honam

    It’s inevitable. Just got back from a trip to South Korea where smart phone penetration is already 70%. I was surprised to hear penetration was only 10% in Japan, which used to be far more advanced than the US in mobile data. Thanks to smart phones, the US is moving ahead.

  • http://Notesark.com Iphoned

    >>…and the news is good

    Good for whom?

    • chandra2

      News is good in terms of smartphone adoption

    • asymco

      For those looking forward to a new era of computing and communication.

  • chandra2

    There are phones I have seen that looks like just one small step from a basic phone (say, a very low end Nokia ), but people use it to read email from their gmail account. The person who was using it said he just pays for voice minutes plus SMS and did not think be signed up for any data plans. Do those things work over 2G/3G etc. or somehow they can squeeze in small amount of data on the voice frequency/band itself?

  • Sandeep

    Horace,

    Nielsen is predicting that the tipping point will happen in December. Comments?
    http://blog.nielsen.com/nielsenwire/consumer/smar

    -Sandeep

    • asymco

      The link above is from March 2010 (more than a year ago). They projected Q1 2011 at 40% penetration but comScore measured 31%. I am extrapolating comScore data which changes monthly and differs somewhat from Nielsen. I also assume linear growth and don't account for "intention" survey data.

      I'm comfortable with my estimate.

  • Steve

    I like the "App Phone" nomenclature. Phones that have an externally developed application ecosystem.
    .
    To me, that is the real difference. I don't think of my iPhone as a cell phone in the way I did with my old feature phone. I think of it as a platform that runs applications, one of which is a phone application.

  • chandra

    For the mass market, the feature phone plus a few basic apps is good enough. Say the preinstalled iPhone app set. It does not need to be the fully open, load what you want computer in your pocket. To me that is a natural progression. A company like Apple does this kind of product stratification all the time. You see it best illustrated in the Mac line from the Mini to the Mac Pro, with the two iMac models, the MBA, MB and MBP in laptops. You see it in the iPod range. And you will see it soon enough in the iPhone range, and I don't mean cutting the price on deprecated models that have been superseded.
    The nearly smart iPhone will be introduced within the next two years. It is a huge gap in the biggest-selling product range. We need a cheaper, less well specified iPhone to bring the masses into the ecosystem so they can learn to imbibe from the Apple well of fruity goodness. Once smitten, many will feel the pull to upgrade and become true acolytes.
    And more on point. there is only one smartphone.

  • gzost

    With the clock being about the US, the US-centric view here makes sense. But to reiterate: in most of the world you can buy any phone you want and then get a combination of voice, SMS and data that fits your needs separately, and at a price that does not include subsidies for a phone that you didn't get. Here smartphone adoption is not tied to the cost of data plans, as e.g. parents can easily get their children smartphones without data plans.,