As covered in our Global TMT Predictions 2018 report, the smartphone’s global success over the next five years will be underpinned by an array of innovations that are largely invisible to its users, but whose combined impact should feel tangible, in the form of greater ease of use, or improved functionality, for example for maps and photos.
These invisible innovations should enable the smartphone to continue ‘absorbing’ the functionality of an ever-broader array of physical objects and to further displace the PC as the preferred device for a growing range of digital applications.
There are three local trends that perhaps heighten the effect of invisible innovation on the smartphone in Australia. These include the strong penetration of high end smartphone devices in our market, the quality of mobile networks in Australia, and the already high adoption of smartphones for use in enterprise settings.
Overall, expect to see alternate uses for the smartphone increasing in Australia.
More and more gadgets are being integrated into smartphones, from apps that help us with day to day life-flow, or those that allow us to spend more time playing games or reading. Much as we’ve seen with the impact of Spotify and Apple Music on how we listen to music – reading and watching media are moving in the same direction. This is fostered by increases in screen size and improvement in network quality, especially as we move toward having more and potentially unlimited data, possibly making room for an increase in activities like watching long form video on our phones, where traditionally people would purchase another device.
We’ll also see more smartphone activated Internet of Things (IoT) functions and work-flow based business applications. The enterprise will be well placed to see smartphone technology as a tool to support work agility and flexibility, giving people the confidence and ability to be mobile and do their work or training from anywhere. Small business can use the smartphone to do almost everything these days from placing orders to raising invoices or other random tasks. While sectors such as personal banking, home security and insurance will further capitalise on the smartphone to improve customer experiences.
Strength in numbers
Taken from our Mobile Consumer Survey 2017, here’s a numbers view of why the prevalence of premium phones with latest innovative technology will continue to be high here:
- 88 percent of Australians now own a smartphone, up from 84 percent last year. Australia is likely to surpass the 90 percent penetration rate by end-2018, ahead of the global prediction of 2023.
- Penetration rates for Australian under 55 years-old are already above the 90 percent mark and therefore the growth in penetration is likely to come from >55 age group. In 2017, there was a five-point increase for 55-64 year olds (77 percent to 82 percent) and a nine-point increase for 65-75 year olds (69 percent to 78 percent). This can be largely attributed to the decommissioning of the 2G network.
- We’re starting to see growth (~50 percent increase 2017-2016) in the purchase of Internet of Things (IoT) that is cheap to install and smartphone activated – all enabled by smartphone apps.
- 67 percent of Australians are using their smartphones for work. There’s only low use for submitting timesheets, expenses and accessing intranet sites, but expect this to increase as functionality becomes more useable.
With these numbers in mind, telcos must look to maintain market share by providing Australians with the best phones on the best networks – they still need to be a focus on network quality. Other industries will look to further capitalise on the smartphone to improve customer experience, e.g. personal banking, home security, health insurance. And companies who target business applications (both small business and enterprise) should look to develop software that allows them and their employees to use simple mobile centric applications to run their business.
Can smartwatch outsmart smartphone?
With Australia reaching almost peak smartphone penetration, with one of the highest smartphone penetrations worldwide, we are big smartphone users.
However, 41 percent of Australians adults think they use their mobile phones too much and 70 percent of Australian 18-24 year olds feel they use their phones excessively, with 50 percent trying to limit and half of them doing so successfully.
Can the smartwatch assist here? We are seeing notable growth in the smartwatch (ownership almost doubled from five percent in 2016 to nine percent in 2017, according to our Mobile Consumer Survey 2017), and it’s likely to overtake the traditional fit bands as the price point comes down or as customers see more value in the functionality they receive for the price they pay. An increase in functionality is been driven by more powerful chips in wearable devices as well as the cellular connectivity.
The beauty of the ‘smarter’ smartwatch means users can disconnect from their phone for many of the tasks they were previously relying on the smartphone for. People can use smartwatches to pay for things, contact people, and listen to music, while still being connected to the things that are critical such as call and text – but the phone stays at home.
Organisations should keep this in mind when looking to create connected experiences for their users and how it may be transferred to a wearable format. There may be an increased opportunity to create new experiences whilst also supporting people’s smartphone usage.
To find out more about TMT Predictions 2018 and view the other predictions, click here.