By Dan Butcher
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By Dan Butcher, February 26, 2009

According to surveys conducted by ABI Research in 2007 and 2008, 70 percent of respondents used their mobile phones to access information through Internet search engines last year, representing a 14 percent increase over 2007.

The consumption of mobile data services, including search, has steadily increased year over year as indicated by the use of email and Web from a mobile phone. That jump in mobile search usage is nearly double the increase in users who said they accessed mobile Web sites generally.

“Mobile search is perhaps the first usage scenario where we see the mobile Internet really taking off,” said Jeff Orr, Sacramento, CA-based senior analyst of mobile content for ABI Research. “It’s something the mobile phone user interface is capable of, because search is accomplished through a couple of keywords, which can be accomplished on basic handset.

“With brief search queries on mobile devices, it’s more like text message behavior than surfing the Internet on a PC, and it’s compatible with a broad range of devices and OS platforms,” he said. “Mobile search is intentional, and can be an alternative to the Yellow Pages or phoning a friend or family member.

“There’s a growing interest among U.S. mobile phone users embracing search because it’s something they can do—they’re already familiar with short message composition using SMS and Twitter.”

Keywords from advertisers and featured results from partners are key aspects of building the mobile ecosystem.

Traditional computing Internet search players such as Google and Yahoo are investing in the mobile search space, as are Web-browser platforms such as Apple’s Safari and Opera.

With a few keywords, consumers can quickly identify movie times, the discography of a musical artist, recommendations for a local eatery and a host of other information and content.


Jeff Orr is the senior analyst of mobile content for ABI Research
Some types of content accessed via mobile phones rose in popularity from 2007 to 2008. These included news, game downloads, music downloads and especially video downloads.

A significantly lower percentage in 2008 reported downloading a ringtone than the prior year, while the interest in location information, social networking and sports remained about the same.

The study confirms that consumers’ use of their mobile phone goes well beyond voice calls.

A significant percentage of respondents say they use their handset for mobile email and Web access, reflecting the broader access to inexpensive or all-you-can-eat mobile data services in the United States, according to the ABI study.

The surveys, each of which sampled more than 1,000 mobile phone users in the U.S. ages 14-59 and across a wide range of demographic profiles, were conducted in November 2007 and December 2008.

They queried consumers’ preferences with regard to a variety of mobile email and Web usage questions.

“US Mobile Email and Mobile Web Access Trends” compares results of the two surveys and includes survey methodology, responses laid out in charts with additional summaries and analysis, and respondent classification/demographics.

It is one of a series of research briefs comparing the results of ABI Research’s 2007 and 2008 consumer mobile content surveys.

Other titles in the series cover blogging and social networking, embedded cameras and navigation functionality, mobile music, mobile phone purchasing, mobile TV and video viewing, and smartphone feature and usage trends. They are all included in the firm’s “The Mobile Consumer” Research Service.

“Going beyond search, there are a lot of extensions taking place, like apps branded by a particular provider,” Mr. Orr said.

Buying mobile apps
Meanwhile, a survey of 235 U.S. smartphone users who installed applications on their devices in 2008, conducted by ABI in November, reveals that a surprising 16.5 percent spent between $100 and $499.

That level of spending is especially significant given the low cost of most mobile applications, ranging from as little as a dollar or two at Apple’s iPhone App Store, to at most about $25.

Those low App Store prices are one of the contentious issues discussed in a new global ABI Research study of mobile application storefronts.

Apple is seen by some as hurting the market with its iPhone App Store, according to ABI, because it drives the price of content down to $1 or $2, using a model similar to its successful iTunes music store.

If you exclude Apple from the mix, applications for other platforms cost in the range of $7 and $25 each.

Many developers, lacking the resources to author applications for all available smartphone platforms, have to focus on one.

That means they have a margin versus volume quandary: sell many copies for the iPhone at a very low price of which the developer receives 70 percent, or sell fewer via one of the other application storefronts, but charge a higher price and earn more per transaction.

On the other hand, Apple did a lot for the market with its massive marketing effort telling the public how great mobile content is, according to ABI.

That created a halo effect for the rest of the industry: Other device manufacturers and content developers working on non-Apple platforms all saw a bump in sales and downloads because there is more awareness of the smartphone category.

In 2009 a number of new mobile application storefronts will be launched from Nokia, Palm, Research In Motion and Samsung.

“Mobile Application Storefronts” describes the emergence of on-deck and Web-based application storefronts for smartphones.

The study explains the general business models and examines Apple’s iTunes App Store in detail. It explores major market trends and opportunities and forecasts revenue and unit downloads from mobile application storefronts.

ABI provides analysis and quantitative forecasting of emerging trends in global connectivity.

“We’re seeing a fair amount of free, ad-supported mobile apps," Mr. Orr said. "That model is growing, but we haven’t seen consumers’ response. Would they rather pay for a game or have a game with sponsorship?

“There definitely apps coming out with advertising and marketing built in, from up-selling and cross-selling by developers to actual ad campaigns integrated into the app itself, either rotating or dynamic,” he said. “There is no shortage of companies offering advertising and analytics to app developers.”

AdMob and Medialets are examples of companies that divide demographics by mobile OS platform, geography and language, tracking cultural variances and demographics across various regions.

“Companies producing these are mobile analytics companies, but they don’t shy away from explaining that the other half of their business is advertising,” Mr. Orr said. “They’re providing application developers with a small amount of code that gets integrated into app for usage tracking so they know what’s actually taking place in the app.

“It’s valuable feedback to know how their app is working or not working,” he said. “Ad agencies have good information about impressions, and mobile is more tangible than a computing environment.

“The smaller real estate on mobile lends itself to more eyes on the message, but it has to be done in a way that consumers will not take offense to.”

Staff Reporter Dan Butcher covers banking and payments, carrier networks, commerce, database/CRM, manufacturers, music and software and technology. Reach him at dan@mobilemarketer.com.