iPhone vs. Newspaper” />In the past few years, social networks have proliferated at an astounding rate. Facebook recently eclipsed 750 million users, Twitter has more than 100 million (an 82% growth from the beginning of the year) and LinkedIn, in the wake of its May IPO, just surpassed the 120 million-user mark.Add to this the traction achieved by the newest kid on the block, Google+, which racked up more than 20 million users in the first few weeks since launch, and one doesn’t need a fortuneteller to figure out that there is a full-fledged war underway for social network supremacy.
As the battle heats up and pundits argue over who has the upper hand and best pre-requisites to succeed, one of the deciding factors that will dictate who comes out on top will arguably be each network’s mobile prowess. Here are 5 reasons why:
1. The most ubiquitous platform by far is mobile
At the beginning of the year, there were over five billion mobile users and approximately two billion Internet subscribers. Looking at Nielsen’s estimates, which state that about two-thirds of the world’s Internet population visit social networking sites, some quick maths will lead you to the conclusion that there are about 3.5 times the number of mobile subscribers as there are users on social networks. The biggest opportunity for growth most definitely lies in the mobile space.
A huge market like China, which Wireless Intelligence says will eclipse 1 billion mobile customers later this year, only has 74% mobile penetration. If this sounds high compare that to the USA, where the mobile phone penetration rate should pass the 100% rate per capita this year, while Europe and Africa are at a 130% and 50% respectively. This is a clear sign that even robust markets still have room to grow before hitting their peak.
2. Rise of the smartphone generation
While there is little question that mobile phones are the most ubiquitous platform, it is only recently that smartphones reached a critical mass of users. This is a development heralded by Apple and the launch of the iPhone and later perpetuated by Google’s Android and HTC, which effectively democratized the smartphone as a device by offering a wide variety of models at a low price point. It is the same strategy that helped Microsoft make Windows the most ubiquitous desktop operating system.
Nielsen predicts that smartphones will surpass feature phones in the U.S by 2011; just in the last three months, 55% of mobile phone purchases were smartphones. On a global level, 77% of all phones sold come equipped with cameras, which addresses the ever-growing consumer demand for in-direct social features, such as the ability to take pictures and video to share with friends and family via Facebook or Twitter.
In author Tomi T Ahonen’s blog, Communities Dominate Brands, he points out that only 400 million people access the Internet solely by way of a personal computer. Out of all 2 billion Internet users, that is a paltry 20%.
Consider the rapid growth of smartphones, as well as the millions of new users browsing the Web via tablet devices, and it’s not too far of a stretch to think that number could be closer to 10% by the end of the decade.
3. Consumer preferences are changing along with the way we communicate
Another strong indicator suggesting that mobile will play a deciding role in who wins and loses the social networking war is the apparent consumer shift from landline to mobile. People increasingly rely on their mobile phones for all their communication needs, not only voice.
According to figures released by the U.S. government earlier in the year, the number of American households relying exclusively on mobile phones has seen an eightfold increase in the past six years, and was up around 27% in the first half of 2010. The centre for Disease Control (CDC) attributes this to both lack of use and affordability, as many lower-income families have chosen to cut the chord on their landlines in favour their cell phones.
Further studies have shown that it is not only cost savings and convenience that lead the change in consumer consumption habits, but new technologies that are changing the way people prefer to communicate.
In a recent Harris Interactive study commissioned by Rebtel, 19% of Americans claim they will use social networking more in the near future, with only 9% claiming to use voice. These figures are small in comparison to those who plan to use SMS, 28%, and video chat, 37%, more often in the near future to stay in touch with family, friends and co-workers.
Related research by Pew Internet shows that 13% of online U.S. adults are currently using Twitter, and half of those do so via their phone. This represents an 8% increase in users over last year, and signals that we are still in the very early stages of using our mobile devices to communicate with those in our various networks.
4. Pure mobile social networks
Group messaging services like GroupMe and textPlus and IP-based SMS substitute services like WhatsApp, and Kik, which had 2 million downloads within three weeks of its cross-platform launch, have given rise to a new era in mobile messaging and social networking.
Free services like these allow users to share photos, their location and send messages across different platforms that aren’t limited to 160 characters. They provide powerful tools for people to privately communicate in real-time with multiple friends at the same time. Also, perhaps most importantly, they are free.
Skype’s recent purchase of GroupMe is further evidence how this war is being waged on all sides of mobile. In a press release, Skype says that: “The acquisition of GroupMe complements Skype’s leadership in voice and video communications by providing best in class text-based communications and innovative features that enable users to connect, share locations and photos and make plans with their closest ties.”
I expect we’ll continue to see many similar examples of these partnerships to offer better social networked utilities for customers who now expect the broadest scope of communications services at their disposal and social networking features directly integrated with their mobile phones.
5. Digital wallets and the new mobile economy
Increasingly, we see that consumers are more and more comfortable using a variety of services on their phones that were originally intended for desktop platforms; a prime example of this is the increase of mobile purchases and recent moves by major credit cards who are now feverishly keen on providing customers with a mobile digital wallet.
Gartner research currently predicts that mobile payment users will reach 141 million globally by 2011, with payments projected to hit $86 billion. That is a 38% increase in users and nearly a 76% jump in volume from 2010.
In addition to this, mobile revenues (now standing at nearly 1 trillion dollars for voice and data) is twice the amount of the personal computer industry. This includes advertising, subscription fees and content revenues.
Where the money flows, brands will follow, and this combined with all the other factors make it very plain to see that mobile will continue to be at the epicentre of the social networking battle not just in 2011, but for many years to come.
Author Note: Andreas is the CEO of Rebtel, the world’s second-largest mobile VoIP company. Prior to Rebtel, the Goldman Sachs alum was COO of Taptu, a leading UK-based mobile search engine, and TradeDoubler, Europe’s leading performance-based marketing company.
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