mobileYouth trends download: The 2 Speed Handset Economy

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mobileYouth!–!youth!mobile!culture!since!2001!!!

The$Two$Speed$Mobile$Handset$Economy$What’s'going'on'in'the'youth'handset'market?'!

!!The$handset$market$is$polarizing$into$2$distinct,$discrete$markets$

• Primary!Handsets!(PH)!• Secondary!Handsets!(SH)!

!Impact$of$the$2$Speed$Economy$

• Renewal!cycles!in!developed!markets!slow!down!• Renewal!cycles!in!developing!markets!both!slow!down!and!speed!up!(PH!

slows!down,!SH!speeds!up)!• Critical!mass!for!youth!innovation!in!developing!markets!

!Implications$for$Handset$Manufacturers$and$Mobile$Operators$Understand!the!key!distinction.!Are!you!targeting!the!PH!or!SH!markets?!Each!market!has!distinct!drivers!and!buying!patterns.!Vendors!occupying!the!middle!ground!(e.g.!SonyEricsson,!Motorola,!Samsung!and!Nokia)!need!to!identify!key!market!Beachheads!of!support!to!retain!and!grow!their!position.!!!$ $

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2$Distinct$Markets$within$Markets!!

• The!Primary!Handset!is!often!a!high!end!display!device!–!such!as!a!Blackberry!or!Iphone.!Of!all!the!handsets/SIMs!owned!this!is!most!likely!the!one!on!contract.!Youth!will!keep!the!handset!in!a!visible!location!(hand,!on!clothing)!and!use!it!both!as!a!status!symbol!and!for!key!services!(such!as!BBM,!mobile!internet,!FB!or!texting).!!!

• The!Secondary!Handset!is!a!low!end!device,!sometimes!only!SIM!card.!In!emerging!markets,!these!handsets!are!either!Shanzai!phones!(knockUoffs)!or!cheap!domestic!brands!(as!in!India).!Secondary!handsets!are!often!prepaid!and!kept!in!discrete!locations!(pocket,!bag).!Youth!will!use!Secondary!Handsets!for!calling!family,!girl/boyfriends!where!long!voice!conversations!are!required.!In!some!cases,!youth!prefer!dual!or!triple!SIM!handsets!to!allow!them!to!negotiate!between!multiple!network!offers.!!

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Developed$vs$Developing$Markets$$Developed$Markets:$$In!developed!markets,!youth!are!gravitating!towards!a!oneUhandset!economy!dominated!by!Primary!Handsets.!(Telegraph)!!

Google’s!Android!share!of!the!smartphone!operating!system!market!in!the!US!fell!slightly!in!the!first!quarter!of!this!year,!according!to!market!intelligence!firm!IDC.!Android’s!share!of!the!market!was!at!52.4!per!cent!at!the!end!of!last!year!and!had!dropped!to!49.5!per!cent!by!March,!the!figures!show.!!!Apple’s!iPhone!increased!its!share!of!the!market!over!the!same!period,!growing!from!17.2!per!cent!to!29.5!per!cent.!RIM’s!BlackBerry!continued!the!steady!decline!which!has!been!ongoing!for!more!than!a!year,!dropping!from!37.8!per!cent!of!the!market!a!year!ago!to!just!13.8!per!cent!in!March.!!

!Developing$Markets:$!In!developing!markets,!youth!are!opting!for!multiple!handsets!–!one!expensive!Primary!handset!for!display!combined!with!a!cheap!locally!manufactured!Secondary!handset!used!for!calls,!texting!etc.!!!In!Vietnam,!low!end!locally!manufactured!handsets!have!become!popular!(Vietnam!News):!!

ChineseUmade!mobile!phone!handsets!with!Vietnamese!brand!names!have!overcome!consumer!doubts!about!poor!quality!and!gained!a!toehold!on!the!lower!end!of!the!domestic!market!–!with!the!past!two!years!witnessing!the!appearance!of!affordable!mobile!phones!with!such!brands!as!Hanel,!QUMobile,!FUmobile,!WellcoM!and!MobiStar.!

!In!Asia!and!Middle!East,!Chinese!manufacturers!flooding!local!markets!have!potentially!catalyzed!both!social!and!technological!change:!

• How!Shanzai!phones!are!driving!cloud!computing!(Tech!Node)!!• How!China’s!mobile!handset!manufacturers!are!toppling!governments!in!

India!and!Middle!East!(Fast!Company)!!!In!Indonesia,!new!startups!like!Nexian!promise!to!serve!the!growing!market!for!dual!handsets!(Startup!News):!!

• Nexian!is!2nd!to!Nokia!in!handset!sales!in!Indonesia!• Nexian!have!their!own!BBM!client!(Nexian!Messenger)!• Their!market!is!“middleUlow!class”!• Their!phones!start!at!IDR!99.000!(US$11)!

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Market$Drivers:$$

• Teenage!Pirates!exploring!new!handset!features!and!launches!!• Price!–!Mobile!operators!and!domestic!manufacturers!push!heavily!

discounted!deals!!• Growth!in!Smartphones!–!Youth!want!smartphones!but!are!limited!in!

financial!resources.!They!need!to!offset!expensive!contracts!with!a!Secondary!Handset!that!can!facilitate!their!dayUtoUday!mobile!behavior.!!

• Youth!Churn!–!loyalty!to!brands!remains!low!due!to!a!general!Broadening!strategy!operated!by!mobile!companies!as!opposed!to!one!of!Deepening.!

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More$Trends$!If! you! liked! this! free! trends! report! from!mobileYouth! then!why! not! check! out!more!downloads!like!this!on!our!Youth!Mobile!Trends!Page.!!Relevant!trends!include:!*!Trend:!Curation!is!Innovation!(mobile!apps)!*!Trend:!Discrete!Social!Media!*!Trend:!Droidettes!(will!teens!drive!Android?)!*!Trend:!Arrival!(What!is!driving!Blackberry!Youth!Trend!in!the!Emerging!Markets?)!*!Trend:!Weibo!Hacking!(How!are!Teens!reclaiming!Social!Space?)!

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Contact$mobileYouth$!We’ve!been!researching!and!making!sense!of!Youth!Mobile!Culture!in!65!countries!since!2001.!To!talk!to!a!youth!specialist,!send!an!email!to:[email protected]!!Josh$Dhaliwal,$Director$http://www.mobileYouth.org!http://www.mobileYouthreport.com!!UK:!+44!20!3286!3635!North!America:!+1!646!867!3635!South!Africa:!+!27!11!08!3635!1!Asia:!+852!8176!3650!!

MOBILEYOUTHyouth marketing mobile culture since 2001

THE MOBILEYOUTH 2013 REPORT

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mobileYouth trends download: The 2 Speed Handset Economy

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