Smartphones have changed the world in a remarkably short time frame. Today, nearly half of the world’s population uses a smartphone and annual spending on new smartphone hardware exceeds 370 billion US dollars. Counterpoint Research tracks smartphone user behavior including brand preference, purchase decision-making process, content consumption patterns, top applications and other mobile usage patterns across regions.
This is a primary consumer survey conducted through randomly selecting a sample of 3500 respondents from all continents to understand mobile user behaviors, usage patterns, preferences and factors influencing purchase decisions. The sample followed a country specific quota in age, gender and carrier size. Here are some key findings from the latest global market survey:
- Twenty One Month’s Smartphone Replacement Cycle
Due to growing dependence on smartphones as well as availability of affordable smartphones, the average global smartphone replacement cycle has reached 21 months. Emerging market consumers are being more aggressive replacing their device than consumers in developed markets. This trend is the complete opposite compared to the feature phone era. The growth of Chinese brands offering higher specification devices at affordable price points has triggered a faster upgrade cycle. Furthermore, the rise of second life and refurbished smartphones is also catalyzing this trend.
Mexican users replace their smartphone fastest, replacing every 18 months. This behavior is likely a consequence of the high percentage of used devices in Mexico; almost one third of the base uses a used device. One in three users in Mexico are likely to upgrade their devices every twelve months. On the other end of the scale, Japanese users reported that they replace their device every 26 months, the longest among all participating countries. This is partly due to the mature and aging user base with access to more premium, durable devices that do not require frequent upgrades.
- Spending Behaviour:
More than half of the Australian, Chinese, German and Saudi smartphone users revealed that they would be willing to spend more than US$400 to replace their current device. These would be the target markets for brands looking to promote their premium portfolio. More than one third of German and Australian users would be willing to spend more than US$500 in their next smartphone purchase. Perhaps not coincidentally, Apple dominates the installed base in both countries, and more than 85% of the Apple users would not switch brands
Only 13% of Japanese users were willing to spend >$400 for the purchase of their next device – even though Apple is also the dominant smartphone brand in Japan. This also explains the slowing upgrade cycles as Japanese consumers are generally more conservative than their peers in other markets
Exhibit 1: Percentage of Users Willing to Pay >$400 for Their Next Smartphone
3. Users Spend More Time On Smartphones Than Any Other Device:
In just a decade, smartphones have become central to people’s lives from communication to content consumption to commerce perspective. As a result, people are now spending more time on their smartphones than any other device. Smartphones are taking the central stage of consumer life. Almost half of respondents spent more than five hours per day on their smartphone. Additionally, one in four users now spend more than 7 hours every day on their smartphone, these are true power users mostly running businesses on their phones or consuming digital content for long hours
Exhibit 2: Time Spent on Smartphones Daily
Looking at the regional trends, users spend more time on their smartphones in emerging countries than in developed countries. Malaysian consumers spend most time on their smartphones across regions. More than 55% of users reported that they spend more than five hours per day on their smartphone. This trend will be prevalent in most emerging markets. Japanese smartphone users spend the least time with their smartphones. 43% claimed to spend less than three hours per day on their device
- Browsing the Internet and Gaming Top Smartphone Use-Cases
Browsing the Internet and Gaming are amongst the most popular activities on a smartphone across different countries. On an average, 64% of the respondents browse the internet on their smartphone daily, while 62% use their smartphone for gaming. Voice calls remain as the preferred choice of communication across many markets (such as Germany and Japan) ahead of messaging compared to emerging markets in Asia and Africa, where messaging took the front seat. It maybe that at least some of these voice calls use over-the-top (OTP) services. Watching videos and spending time on social networks are the fifth and sixth most popular activities on a smartphone.
Exhibit 3: Top Use-Cases for Smartphone Users
- Apple appeared in the top three most preferred brands for respondents’ next purchase, across regions
- More than half of the respondents from developed countries have subscribed to digital streaming services. One in three respondents use Netflix in Australia, while two in five respondents use Amazon Prime in Germany
- Digital payment and wallet apps are gaining popularity in emerging markets, by riding on the ease-of-use and filling gaps in the financial infrastructure
- Close to 45% of respondents are using at least one payment/wallet app in Malaysia and Thailand. This trend is prevalent in developing markets. Alipay and WeChat is popular in China, True Money in Thailand
- Two in Three mobile users plan to upgrade to a new phone within the next twelve months in India