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Winning in the Global Smartphone Apps Economy


Mobile network service providers conceded the smartphone software application ecosystems to other companies. The resulting transfer of market influence will clearly have a lasting effect on their core business model -- as the apparent marketplace trends are now gaining momentum.

​According to the latest market study by ABI Research, mobile email and over-the-top (OTT) mobile applications (apps) -- such as Whatsapp, Viber, and iMessage -- have been altering the underlying behaviors of mobile smartphone end-users, which is impacting usage patterns.

In 1Q-2012, minutes of use (Voice) per user showed the greatest declines in North America (-5.3 percent), Asia-Pacific (-0.6 percent), and Western Europe (-0.4 percent).

“The only region with any meaningful positive growth is the Middle East (3.5 percent)”, said Ying Kang Tan, research associate at ABI Research.

Messages Sent is also experiencing slow-downs but more so in emerging markets than developed markets. Latin America, Africa, and Asia-Pacific demonstrated -5.8 percent, -0.7 percent and -0.2 percent declines quarter-on-quarter respectively.

A number of mobile network operators, such as Singtel and Vodafone, have started to counter OTT apps such as Whatsapp by increasing the quota of bundled SMS their end-users are allocated.

Such initiatives may come across as closing the stable door after the horse has bolted. However, there are indications that OTT messaging platforms eclipse SMS in all aspects. Often Whatsapp end-users only use the messaging platform for a select number of contacts in their Whatsapp list.

There have been privacy concerns regarding contact lists held on the Whatsapp server; slow delivery times when data coverage is sparse; as well as contributing to maxed out data quotas if the user is on a limited data plan.

In contrast, mobile data traffic continues its rapidly ascending arc. 2012 is expected to close out the year with 69 percent growth to 13.4 Exabytes.

While there is considerable interest in 4G, 3G subscriptions continue to grow because most low-tier and mid-tier handsets are 3G, whereas 4G will remain a premium product for the next couple of years.

However, 4G traffic will grow disproportionately to its subscriber base as LTE will encourage greater use of high definition streaming and adoption of rich media/video social-networking services.

Over the forecast period, 4G has a CAGR of 120 percent compared to 60 percent for 3G.

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