Mobile internet is exactly what it sounds like, internet designed for use on mobile devices such as smartphones and tablets. Its formal definition is “a combination of mobile computing devices, high-speed wireless connectivity, and applications” (Manyika, et al., 2013). Its usage is already widespread, “with more than 1.1 billion people using smartphones and tablets” (Manyika, et al., 2013). This figure is still growing as “mobile internet capability has become a feature in the lives of millions of people, who have developed a stronger attachment to their smartphones and tablets than to any previous computer technology” (Manyika, et al., 2013). Despite the exponential growth within the past decade, the full potential of mobile internet has not yet been realized, with approximately 2-3 billion people slated to join this new world of mobile devices, most coming from developing countries.
What’s interesting about the mobile internet is that it is always evolving with the technology that utilises it. Devices are getting better with high resolution screens, precise touch sensors, and powerful processors that rival early game consoles and internet service providers are finding ways to improve the experience with things such as 4G wireless networks, giving consumers lightning fast browsing speeds.
Mobile internet has become an integral part of our daily lives, and businesses have started to realize the impact it can have on the success of an organization. As the presence of mobile internet fluctuates in different countries, we will focus on the impact of mobile internet on small businesses in Canada and USA.
Via 6S Marketing, the following infographic looks at the state of Canadian Connectedness:
What this infographic tells us is that approximately 70% of Canadians (24 million people) use mobile devices, with 80% of them (19.2 million) using a smartphone. With technology constantly improving, it won’t be long before all phones become smartphones. One study suggests that the laggards – the last 16% of consumers in the innovation adoption lifecycle, will adopt smartphones by 2020 (Dediu, 2013). The percentages for users with smartphones are very similar in the US (Bosomworth, 2015).
Why is it so successful?
Mobile internet’s rapid growth can be attributed to three main factors: its interactivity, connectivity, and the development of new software.
With technological advances such as Google Now and Apple’s Siri – offering precise voice recognition, mobile devices are more richly and intuitively interactive. Mobile devices are also incorporating new gesture recognition software; example being the Samsung Galaxy S4 phone that allows users to browse by waving their hand in front of the screen (Manyika, et al., 2013). Other new advances such as wearable devices are also emerging in the market – with things such as Google Glass and various smart watches being readily available or coming in the near future.
Along with the major improvements being made in the hardware being used, major advances in the high-speed mobile connectivity are also being made. Within the past 10 years, mobile connectivity has improved from 3G to 4G/LTE connections, currently the fastest mobile cellular networks available. It is estimated that within the next decade, “network advances could include 5G cellular networks, satellite services, and possibly long range wi-fi” (Manyika, et al., 2013).
One of the most critical elements that has led to mobile internet’s emergence is the software applications “that deliver innovative capabilities and services on devices. These apps help make mobile internet use very different from using either conventional phones or computers, providing location-based services; personalized feeds of information and entertainment content; and constant contact with friends, colleagues, and customers” (Manyika, et al., 2013). Apps are crucial to the potential impact of mobile internet use, as it enhances its capabilities and has the potential to disrupt established business models – an example would be mobile banking, something that has been widely adopted by major banks and financial institutions, yet changed as recently as 2010 with the emergence of software apps replacing the older methods of SMS or the mobile web (WikiPedia, 2015).
In terms of potential impact, there are two main areas of which there is considerable untapped potential: growth acceleration and economic impact.
As previously mentioned, the largest opportunity for growth of mobile internet use and impact will be in developing economies, where access to the internet has important implications for economic development, potentially helping hundreds of millions of people to leapfrog into the 21st century global economy (Manyika, et al., 2013). According to UNICEF, in 2013, half of the world’s adult population uses no banking services, 100 million children do not attend school, and few of the farmers on the world’s 500 million small-scale farms have broader access to markets; mobile access to the internet could address many of the basic needs of the developing world and enable its citizens to become participants in the global digital economy, including as entrepreneurs (Manyika, et al., 2013).
As mobile internet technology is dependent on the devices used for it (smartphones and tablets), the growth rate of these devices is important. The number of smartphones in use grew 50% in 2012, and smartphones account for 30% of mobile devices globally – the growth of these devices has been rapid and is likely to continue at the same pace, or accelerate in developing economies (Manyika, et al., 2013). It is estimated that by 2025, nearly 80% of all internet connections could be through mobile devices as sales of smartphones and tablets has already exceeded sales of personal computers and is looking to exceed the number of personal computers already installed or owned (Manyika, et al., 2013).
As mentioned before, consumers are spending more time online which is driving demand for software applications. App downloads grew 150% in 2012, with an array of new mobile services emerging – near-field payments (which allows data exchange between devices within a certain range) grew 400% in 2012 and is expected to grow 20x by 2016. An example of these systems at work is allowing consumers to wave a phone near a point-of-sale terminal to make a payment. Consumers are also shifting their entertainment consumption from cable and broadcast channels towards playing video games, emailing and text messaging on mobile phones – growing 200% in the past four years. Time spent online on mobile phones is increasing steadily at 25% every year, with 15% of total internet traffic coming from mobile devices. It is possible that by 2025, a far higher percentage of media consumption could be dominated by mobile technology (Manyika, et al., 2013).
With the evolution and advances in smartphone hardware as well as the emergence of other mobile devices (i.e. wearable devices), it is expected that sales will continue to grow and new uses will be innovated. Wearable devices will make it possible to deliver all sorts of content in novel ways – ex. Projecting images that appear to float in space in front of the wearer as well as the possibility to develop “virtual reality” applications (Manyika, et al., 2013). Other practical applications for wearable devices include programming a device to help a patient with Alzheimer’s recognize people and various objects, instant translation apps that can read signs and menus and digitally translate them in real-time, or even automating daily tasks such as schedule managing, answering questions, and sending alerts of important imformation (Manyika, et al., 2013). There is also continued reductions in the prices of smartphones and data plans, further fueling the rapid adoption rates – component costs are expected to continue to decline, which could reduce producer costs for midrange smartphones by 30% by 2016 (Manyika, et al., 2013).
The economic impact that mobile internet and its usage could have on a global scale is massive, with estimates of $3.7 – $10.8 trillion per year by 2025 (Manyika, et al., 2013). Half of this potential value could come from using mobile devices to spread internet access to developing regions – people who have had poor access to education, health care, and government services and have never participated in the formal economy could become participants in the global economy through the internet (Manyika, et al., 2013).
To further estimate the potential economic impact of mobile internet technology, it is important to examine how mobile applications could improve service delivery, raise productivity, and create value for consumers in time savings and convenience surplus (Manyika, et al., 2013). One of the services that most benefits from mobile internet technology is the health care industry – specifically the management of chronic disease. It is estimated that $2 trillion a year could be saved by 2025 through monitoring patients through ingestible or attached sensors capable of transmitting readings and alerting patients, nurses, and physicians when an impending problem is recognized (Manyika, et al., 2013).
Another area that could potentially be drastically impacted is in education – mobile computing has the potential to raise productivity and improve learning both inside and outside classrooms. Early experiments show promise for hybrid online/offline teaching models using tablets to increase lesson quality, improve student performance, and increase graduation rates (Manyika, et al., 2013). The share delivered via mobile devices could have economic impact of $300 billion to $1 trillion annually (Manyika, et al., 2013).
Other sectors that could be impacted are the public sector, retail sector, and government and private-sector organizations.
So how has this mobile revolution affected small businesses?
A study conducted in 2013 found that 45% of small businesses in the US don’t have a website, and only 6% of small businesses with websites said they were mobile-optimized (Sterling, 2014). This is a staggeringly low percentage, especially if the majority of people use a smartphone daily. On average, men and women spend between 4 – 4.5 hours on the mobile web and 22 – 30 hours on mobile apps (Bosomworth, 2015). This represents a major gap in the market, where small businesses are not allocating resources to a platform that a majority of their consumers are.
What’s interesting is that 71% of small businesses stated that they felt having a mobile website or app would have a positive impact on business (eMarketer, 2015). Half of the businesses that didn’t have a mobile website or app blamed it on the fact that they didn’t know how to build one, 25% said they were too busy running their businesses to maintain an app, and 25% said creating a mobile app or website simply cost too much. In addition, 37% of respondents said the time and resources required to enable mobile sales as one of the biggest mobile strategy challenges (eMarketer, 2015).
A possible solution? There are tons of independent developers looking for work to build their personal portfolio. Personally, I have a few friends that have done several projects for small businesses building mobile websites and apps for them, and they clearly stated that they accepted below average fees just for the experience. Small businesses should seek out these independent contractors through local job posting sites (i.e. Craigslist) and begin developing mobile-friendly solutions, as it is evident that it is still trending up and looks to be a potentially lucrative investment.
Bosomworth, D. (2015, January 15). Mobile Marketing Statistics 2015. Retrieved from Smart Insights: http://www.smartinsights.com/mobile-marketing/mobile-marketing-analytics/mobile-marketing-statistics/
Dediu, H. (2013, October 7). When will the US reach smartphone saturation? Retrieved from Asymco: http://www.asymco.com/2013/10/07/when-will-the-us-reach-smartphone-saturation/
eMarketer. (2015, March 19). How much longer until small businesses join the mobile world? Retrieved from eMarketer: http://www.emarketer.com/Article/How-Much-Longer-Until-Small-Businesses-Join-Mobile-World/1012237
Manyika, J., Chui, M., Bughin, J., Dobbs, R., Bisson, P., & Marrs, A. (2013). Disruptive Technologies: Advances that will transform life, business and the global economy. McKinsey Global Institute.
Sterling, G. (2014, February 12). Survey: Only 6 percent of SMBs have mobile sites, 45 percent don’t have any site at all. Retrieved from Marketing Land: http://marketingland.com/survey-online-6-percent-smbs-mobile-sites-45-percent-dont-site-73937
WikiPedia. (2015, March 28). Mobile Banking. Retrieved from WikiPedia: http://en.wikipedia.org/wiki/Mobile_banking