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What is a Smart Phone?

A smart phone is a mobile phone offering internet capabilities and personal computer type functionality. Smart phones have become increasingly popular because of the access they provide to email, social networking and advanced applications. Smart phones also have bigger screens, more processing power, greater memory storage and more camera pixels than feature phones!

Smart phones run on operating systems such as RIM (Blackberry), Apple’s iOS (iPhone), Android, Palm OS, and Windows Mobile. The comScore table below shows the top smart phone platforms in the US for the 3 months ending May 2010.

Smart Phones are changing mobile habits

The evolution to more powerful mobile phones has also changed our usage patterns. Increasingly mobile phone usage is about data not voice calls. Accessing the internet, gaming applications and as a portable music player have become important uses of smart phones. The Morgan Stanley pie chart below confirms this by comparing the usage by an average mobile phone user versus an iPhone user.

Not only is the typical iPhone user using the phone longer, they are using it less for voice calls and more for email, music, games and internet.

Rapid growth of smart phones

The sale of smart phones has been rapidly growing. Nielsen research predicts that smart phone penetration will reach the same levels as feature phones in 2011.

Arguably, the smart phone will eventually become the most widely adopted phone by consumers. It will become the norm as mainstream adoption increases. Their growth is attributed to a number of factors, such as their increased capabilities and the growth in applications available for these platforms. For example, the iPhone has over 200,000 applications and Android has approximately 75,000 at the time of writing.

In the first quarter of this year (January 2010 – March 2010), there were 314 million mobile phones sold worldwide according to Gartner research. Of these phones sold, 54.3 million were smart phones. This is an increase of 48.7% from the same period last year. This is the strongest year-on-year increase since 2006.

More web traffic is coming from mobile internet

Websites are finding that more traffic is coming from mobile internet, particularly from smart phones. Social networking sites, news sites, ecommerce sites have all found an increasing amount of traffic coming via mobile devices. Pew Research shows that 33% of mobile phone owners now access news via their mobiles phones.

The smart phone is growing the category of mobile internet because the devices are small, portable and becoming more affordable. It has given end users the ability to access the internet anywhere, anytime. Morgan Stanley research predicts that a key computing growth driver will be the mobile internet. This includes devices such as smart phones, tablets, e-readers, gaming devices, televisions, radios. The way that end users are accessing the internet will continue to become more varied as more internet enabled devices enter the market.

Opportunities for mobile internet

As smart phones become more widespread, it presents a range of business opportunities. The mobile device is very personal to users, frequently carried around (the one item you can’t leave home without!) and a device, which you can customise. There are also application marketplaces and billing mechanisms in place to support downloads and virtual good purchases. This makes it incredibly easy to purchase items such as applications. Often the amounts are micropayment (e.g. a few dollars), which makes them affordable to consumers.

According to Gartner it is expected that in 2010, consumers will spend $6.2 billion in mobile applications. Games remain the number one application, and mobile shopping, social networking, utilities and productivity tools continue to grow and attract increasing amounts of money.

Consumers are making research decisions and purchasing goods and services on smart phones. Smart phones are growing online purchases, creating a category known as m-commerce (mobile commerce).

Australian Organisations Jumping on the Smart Phone Phenomenon

Where consumer trends emerge, marketers follow. So it’s not surprising to see an increasing number of Australian businesses developing applications and interfaces for smart phones:

• The banks were amongst the first on the smart phone bandwagon, developing applications that enable customers to perform online banking functions via their phone
• Pizza Hut and Dominos have brought mobile commerce to the fast food industry with customers able to order pizzas direct from their application
• Public transport has been another popular utility for smart phone users, with providers such as MetLink creating applications that feed real time timetable information to customers
• Telecommunications providers have also been early adopters, with Optus and 3 building applications that allow customers to monitor call and data usage
• Within Next Digital, we have worked with Choice to bring their product reviews to the smart phone environment

With consumer adoption and usage patterns rapidly evolving, now is the time for forward thinking businesses to be planning their smart phone presence (if they haven’t begun already).