How Much Will You Pay To Upgrade To That Shiny New Smartphone?

Here is a problem all of us have: we bought the latest and greatest smartphone / tablet / 5InchPlus device (phablet) from company X (okay, Apple / Samsung). Three to four months down the line, a better product is announced, and in a couple of months from then, the shiny new device hits the market, and we can see people carrying it around. We all feel like losers, at times ashamed to pull out our own device – the same device we pulled out at the first available opportunity when it was the latest and greatest (which was just a few months ago).

Here is the opportunity – there is definitely an amount X that each one of us is willing to pay, for upgrading to the shiny new device. But such upgrade mechanisms do not exist today. So for example, when the iPhone5 came out, millions of iPhone 4s owners would have been swipe-ready with their credit cards if asked to pay say $75 for an upgrade to the new device. Or $100. We don’t know.

The situation is ‘guess what, our hands are tied’ in the US with the operators more or less dictating stuff – but it is getting better, and outside the UA, in many markets, the operator issue does not exist in the first place. There are two parts to this problem:

(a) Determine the price X for a given product upgrade scenario (say, Samsung Galaxy 2 to Galaxy 4 upgrade) and
(b) Figure out a return / resell / reuse mechanism for the old device so that the difference between (bulk purchase price for new device) and (recovered cost of returned device) is net positive.

Pieces of this puzzle have been solved – particularly (b) where you can send your unused iphones etc. But the puzzle obviously is yet to be solved. Potentially this could be a multi-billion dollar opportunity, given the fact that there are half-a-billion android devices and half-a-billion iOS devices on the planet, all of which will be obsolete in a few months from now.

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WalMart Effect? iPhone 5 Becomes World’s Best-Selling Smartphone In Q4

All those steep discounts seem to have worked in Apple’s favor – we spotted this stat today, that Apple sold more smartphones than Samsung worldwide in Q4, which was basically an iPhone 5 vs Galaxy S3 game. Apple seems to have won the game – Strategy Analytics estimates that 27.4 million iPhone 5 smartphones shipped worldwide during Q4, versus 15.4 million Galaxy SIII units. (Source: StrategyAnalytics via TC

How do we digest these numbers? 27.4 million iPhone 5 smartphones in one quarter – Apple is a clear winner here. People might still be asking “What’s That Big Phone?” but maybe they don’t see the Apple logo on that big phone.

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India Smartphone Statistics: 50 Percent Have No Data Connection

India’s smartphone statistics continue to surprise us in many ways – we spotted this today, that 50 percent of smartphone users in India do not have a data connection, so the ‘smart’ components are not actually being used fully. (Source: Nielsen via NextBigWhat)

india smartphone statisticsWe had spotted some stats on mobile internet usage in India from Mary Meeker’s report – The Anomaly Called India – we actually need that stat to digest this one.

Imagine, mobile internet usage has exceeded desktop internet usage in India, with only 50 percent of smartphones using a data connection. We will soon see the desktop internet numbers become insignificant compared to mobile devices. Now this is a pattern that is peculiar to emerging countries – remember, India for instance skipped past the manufacturing phase to emerge into a services economy from an agriculture economy. This could be the next significant ‘skip’: just skip the desktop internet phase: affordable mobile devices suddenly change the landscape of accessibility and connectivity.

Mary Meeker was right in putting up a slide for India. What she missed was this particular stat, that all this was happening with no more than 50 percent with a data connection on their smartphone. And then, we have the whole smartphone ownership numbers that will go up with Samsung bringing in very capable and affordable smartphones. The next five to ten years would be exciting for mobile internet in India.

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Apple And Samsung Earn 98% Of The Profits In The Smartphone Market

We always knew that Apple had a disproportionate share of profits in the mobile phone industry – Read ‘Apple: The Smart Smartphone Maker’. For example, Apple shipped only about 6 percent of the industry’s smartphones and tablets in Q2 2012, but captured about 43 percent of the industry’s revenue, and an astonishing 77 percent of the industry’s operating profits. (Source). In that context, what we spotted today was not a surprise – that together, Apple and Samsung now earn 98% of the profits in the smartphone market (Source).

We don’t have to digest this fact – we see Apple and Samsung smartphones everywhere we look – but that is a good number to know when we talk about the smartphone industry. And neither of them was even into making smartphones five years back.

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Smartphone Statistics: Apple Now Has 51 Percent Marketshare In The US

Okay, we read those reports too, the ones that said Android is the big winner of 2012. In fact, we had even spotted a neat-sounding stat – that there are more than a billion android devices on the planet now. But we spotted this stat today, that the huge success of the iPhone5 means that Apple now has more than 51 percent marketshare in the US smartphone market. (Source)

How do we digest this stat? First, it is an important stat to know, since we now know every second smartphone person in the US is on the Apple ecosystem. Second, this increase in marketshare is coming from people ‘switching’ from other smartphones primarily (36 percent overall, 19 percent switching from Android). That takes the battle to the new smartphone users – which ones are they buying and why?

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60.4 Million: Number of ‘5 Inch Plus’ Smartphones To Be Sold In 2013

The phablet mania is in full swing now, and 2013 could well be the year the trend goes mainstream – we spotted this stat, that a solid 60 million smartphones with screens bigger than 5 inches would be sold in 2013. (Source)

How do we digest this stat? Let us try this: this is one of the few areas that will see a 100 percent plus growth rate in 2013 – this would be a 136 percent growth rate, to be precise. If you think Startups = Growth – here is one domain for you.

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‘Device And Drive’: 1 In 3 Smartphone Owners Use Device While Driving

This is a statistic that clearly points out a risk in the making – we spotted this stat today, that one in 3 smartphone owners use the device while driving. (Source).

We also know that every second american adult is a smartphone user – that is a dangerous trend overall, using devices when driving.

Many states are making laws against the use of phones when driving. That looks like the only possible solution from where we are now.

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Here Is Why You Should Build Smartphone Apps For The Indian Market

PG says Startup = Growth. Mary Meeker used the following chart to show how mobile Internet usage in India has crossed over desktop Internet usage.

(Image Source: The Hindu BusinessLine). We had spotted a couple of stats from the Report – under ‘The Anomaly called India’.

If startup = growth, here is why you should absolutely be building smartphone apps for the Indian market now:

1. With 44 million smartphone users in Q4 of 2012, India is the fifth largest smartphone market globally. India follows China, the US, Japan and Brazil. However, with just four per cent of the total mobile subscribers being smartphone users, the country’s year-on-year growth in smartphones is pegged at 52 per cent, higher than China and the US.

2. 50 Percent of the India’s 1.2 billion plus population is under 25 years of age (Source)- generally the sweet spot for device adaption and usage.

3. An ‘affordable smartphone revolution’ is underway in India – some pointers – manufacturers lowering prices and Intel’s plan to get affordable smartphones to India.

There are many challenges though, but purely from a growth standpoint, the case for the Indian smartphone app looks solid.

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275 Million: Number of LTE Smartphones To Be Shipped In 2013

This is one number we track closely – we had spotted some LTE stats in the past as well. We spotted this interesting stat today, that some 275 million smartphones are expected to be shipped by 2013 (Source)

This is important for one simple reason: LTE will give customers faster data speeds than even their typical wifi or broadband setup at home. With bigger screen sizes and all the amazing video content out there, this could finally be the mobile video revolution everyone has been waiting for.

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By Q1 2013 China Will have The Largest Base of Smartphones

We had spotted quite a few smartphone related stats. Today, we spotted this stat that China will displace the US to become the country with the largest base of smartphone installations. (Source)

The developing countries are jumping into the smartphone revolution in a big way. The opportunities are different, and they are of a different scale. Interesting times ahead.

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