Smartphone: 2011 Breakout Product of the Year

DroidObviously smartphones are not new and have existed for a decade. So why would I call the smartphone the product of the year?

That’s because 2011 is the year when smartphones became ubiquitous and their use now exceeds traditional cell phones. As we look back on 2011, this year was the tipping point of when mobile usage changed and with it comes larger implications of how the American public accesses the internet.

In terms of the changing mobile phone world, I challenge any Strumings reader to visit a Verizon or AT&T store and find more than a handful of traditional cell phones without a data plan. Obviously some of this is self serving as Verizon and AT&T, the mobile industry’s biggest players, encourage their subscribers to pony up to smartphones along with their higher margin $30 monthly data plans. At the same time, they do so with the understanding of the general public’s insatiable desire for access (and often addiction) to their email and the internet.

In May 2011 the Pew Research Center conducted a national study of 2,277 adults about smartphone ownership & usage. The findings indicated that 83% of Adults own a cell phone of some kind and of those 42% own a smartphone.  This is reinforced by 3rd Quarter Nielsen data just released which indicates that 44% of mobile subscribers have smartphones, with a projection of 50% by year end. Not surprisingly, adults in wealthier households with $75,000+ household income (59%) and young adults, 25-54 (58%) have greater smartphone penetration as well.

The explosion of Android devices and the evolution of the iPhone have usurped the smartphone market leadership from BlackBerry devices which had led the original growth of smartphones last decade. In terms of mobile apps, obviously Android and iOS  dominate with 49% and 34% respective shares of recent downloads according to Nielsen.

What’s also interesting about smartphones is that in a recent study conducted by Consumer Cellular, the exclusive cell phone provider for AARP members, is that seniors and Boomers use their cell phones to connect with family and friends more than ever. (See 3 Myths About Boomers which exposes the myth that Boomers are technologically lame). 9 of 10 respondents say that they taught themselves how to use their smartphones and the majority said email was the #1 tool used. There are some gender differences as men visited sports apps more than women while women accessed social media apps more frequently.

What does mean for marketers?

1. It reinforces the need for business to have a mobile web site since it is becoming more likely that it will be accessed via a mobile device.

2. Mobile e-commerce is exploding and apps and information to make it easier for smartphone consumers to buy stuff is critical

3. Apps which offer immediate value and information such as Groupon, Living Social, ShopKick, Yelp, and others will continue to grow despite my personal disappointment with the digital deal leaders–see Digital Deal Deluge.

4. Social media will be driven by mobile phone usage. The real time posting of photos and status updates is facilitated by smartphones.

What will be the product of 2012? It’s too early to tell, but much as it took the maturation of the mobile phone business to reach the tipping point for smartphones, perhaps the growth of tablets, the Holiday gift of 2011, will similarly enhance increased American mobility in 2012. Time will tell.

Happy holidays and best wishes for a happy and healthy new year. Strumings will be back on Wednesday January 4. Yankees will reign in 2012. #28 straight ahead.

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