Uc mi report 2012 for posting

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Uc mi report 2012 for posting

  1. 1. 1 Mobile Internet in Asia is the Next Big Thing The China & India Story The mobile internet industry has been growing at an exponential rate in countries across Asia in the past 3 or 4 years, it has reached a tipping point in 2012, as evidenced in two most populous countries in the region: more Chinese people access the internet through their cellphones than desktop PC, and the mobile internet users in India generated more traffic than on desktop. 388 Mobile internet Users 356 Surpassed Desktop Internet Users in China in June 2012 303 233 118 Desktop Internet Users(million) Mobile Internet Users(million) Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Source: CNNIC, July 2012 100 Mobile Internet Traffic Surpassed Desktop Internet Traffic in India 80 60 40 Desktop 20 Mobile 0 Jan-09 Sep-09 May-10 Apr-11 Oct-11 Jun-12 Source: StatCounter, Aug 2012
  2. 2. 2 Mobile Internet in Asia is the Next Big ThingCell Phone Gained Much WiderAdoption than Fixed InternetThe economic development in many Asian countries in the past few yearshas made cell phones available to the mass, many people buy their first cellphone earlier than their first PC, the cell phone has naturally become theirentry point to the internet, often times, their only entry point to the internet. Aper capita GDP of several thousand dollars is petty compared to the US,however, it’s enough for people in these Asian countries to start theirjourney of a connected lifestyle through their cell phones. GDP PPP per capita150% in US$ (2011) US 48,442 China 8,442 India 3,650100% Indonesia 4,666 Pakistan 2,789 Vietnam 2,793 50% Source: http://en.wikipedia.org/wiki /List_of_countries_by_GD P_(PPP)_per_capita 0% US China India Indonesia Pakistan Vietnam Internet Penetration Mobile PenetrationSource:US: CTIA, Nov 2011China: MIIT, March 2011India: TRAI, May 2012Indonesia: "Indonesia - Telecom, Mobile, Broadband and Forecasts". Peter Evans, May 2012May 2012Pakistan: “Pakistan Telecom Indicators". PTA, June 2012Vietnam: ITU, Jan 2011
  3. 3. 3 Mobile Internet in Asia is the Next Big Thing 3 Golden Years Ahead for Smartphone and MI in China Before Approaching the Ceiling of Addressable Market It does not take much imagination to use a hockey stick growth curve to forecast the smart phone shipment and mobile internet in China given the fact that the Chinese economy is fast growing and China produces world’s most cell phones. The challenge is to identify how far the market will go. UCWeb believes the income level of the Chinese population is a key factor in deciding the growth potential. China has a population of 1.3 billion (1) , 254 million (2) has a daily income less than 1.25 US dollars (3) , among those above the line, which we assume as being able to afford smartphone or the mobile internet, the population aged between 15 and 64 is 813 million. According to the forecast of iResearch, the number of smartphone users and mobile internet users will approach that number in 2015, this means that the mobile internet industry will keep growing at fast pace in the coming 3 years. 800 813 million (1) Chinese population aged 15 – 64 , daily income > 1.25 US$ per day(3) 600 400 200 Smartphone Shipment (million) Smartphone Installed Base (million) 0 2011 2012e 2013e 2014e 2015e Mobile Internet Users (million) Source: CNNIC, iResearch Notes 1. According to China’s 2010 Census, China has a total population of 1,371 million, including Hong Kong and Macao, 99.8 million, or 74.5% of them are aged 15 to 64. 2. http://hi.baidu.com/evkpgexaaybaqsq/item/87e654c72b1f773498b498d8 3. The Millennial Development Goals, UN
  4. 4. 4 Mobile Internet in Asia is the Next Big ThingAsia Driving World Mobile Internet TrafficThe popularity of cell phones in Asia skewed the population toward themobile internet, when they are able to afford, they use as much as they can,contributing to a share disproportional to the their socioeconomicdevelopment level, as shown in the graph below based on StatCounter’sdata. +192.5% since 2010 5.13% 7.96% 17.84% 14.85% 2.86% 7.55% 10.01%Cisco even envisioned the quick rise of Asia on the world’s mobile internetpower map. Cisco extrapolated data from its decade of experience buildingthe world internet infrastructure, created a forecasting tool, which projectsthat Asia will contribute to the largest share of mobile internet trafficworldwide in 2015. – Cisco VNI Mobile 2011
  5. 5. 5 Understand the Mobile Internet Market in Asia A Comparative Look at the Smartphone Market in China and the US The US has a clear preference on iPhone and the top 3 handset OEMs claim almost three quarters of the market, while the market in China is more fragmented, the combined share of the top 3 doesn’t amount to half of the market and there are a handful of local players with significant presence. Smartphone Market Share in ZTE 8.4% Others 22.9% China Q2/2012, by Unit Nokia 9.1% iPhone 7.5% Shipment Huawei 9.8% Coolpad 10.4% Samsung 20.8% Lenovo 11.0% Source: IHS iSupply Research, Aug 2012 Others 11.1% Smartphone Market Share in RIM 9.0% iPhone 34.0% US Q2/2012, by Unit Motorola 11.0% Shipment HTC 17.4% Samsung 17.5% Source: Nielson, July 2012
  6. 6. 6 Understand the Mobile Internet Market in AsiaThe RMB 1,000 Smart Phones ExtendingMobile Internet Coverage to Millions in ChinaSmartphone / mobile internet market took off in China in 2011, when theRMB 1,000 (approx. USD 159) smartphones were introduced to the market.It extended the reach of smartphone to average wage earners in China.These entry level smartphones sports CPU up to 1GHz and screenresolution up to 800*480, making it possible for their owners to enjoymainstream applications and have a reasonably good experience withmobile browsers.Huawei C8500: ZTE V880:Total Lenovo A Series:China’s first Android shipments surpassed Shipment surpassedbased smartphone 5 million units 1 million in 2 monthsthat surpassed 1 in Chinamillion units inmonthly sales
  7. 7. 7 Understand the Mobile Internet Market in Asia A Comparative Look at the Application Distribution Channel in China and the US In the US, most consumers download applications from Apple App Store and Google Play, while in China, the distribution channel is very fragmented, Apple App Store and Google Play only take a minor share of the market, other players, including internet portals, telecom carriers and handset OEMs all participate in the market in one form or another, they have been able to leverage their respective strength and hold on to a niche of the market. China Third Party Application Srotes Internet Portals Others s EM tO se nd Ha VS Telecom Carriers Source: iimedia, June 2012 US
  8. 8. 8 Understand the Mobile Internet Market in AsiaA Not So Unique Phenomenon - WirelessOnly on the Rise, as Exemplified in ChinaAccording to a June 2012 survey from the Centers for Disease Control andPrevention in the US, 90 percent of adults living near or below the povertyline live in a household that only uses a wireless device as their family’stelephone. Nationwide, one in three households are wireless only.In China, partly due to cost constraint and partly by choice, more and morepeople are using their cell phones as the only device to access the internet.As the cell phone adoption reaches even low income segment of theChinese society, and more and more young people in cities move morefrequently, the percentage of wireless only population keeps on the rise.Wireless Only Internet Population in China (2010 – 2012) Wireless Only Users(million) % Wireless Only 100 18.0% 15.0% 80 12.0% 60 9.0% 40 6.0% 20 3.0% 0 0.0% Dec-10 Jun-11 Dec-11 Jun-12 Source: CNNIC, Sep 2012
  9. 9. 9 Understand the Mobile Internet Market in Asia Asian Lifestyle Shaped by Cell Phones Compared with US users, Asian users are more dependent on mobile internet because of their differences in lifestyle. For example, Asian users are more dependent on public transportation and their hands are freed from driving; in addition, they also live in much more crowded cities where they have relatively less time and space in social activities than their western counterparts, where they mostly socialize and receive entertainment from their cell phones. China/Asia US Transit Socialize Entertainment
  10. 10. 10 Understand the Mobile Internet Market in AsiaA Comparative Look at the ApplicationConsumption Pattern of Users in China and the USChina contributes to 18% of the downloads in App Store in Q2 2012,however, in revenue terms, China contributed only 3.1%. Chinese usershave a much lower preference in paid apps, they tend to use more freeapps, and their per app spending is only 11% of the US users. Percentage of Total Downloads by Country (Q2/2012) US 28% ROW 47% China 18% Japan 7% App Store Revenue (Q2/2012) US 42% ROW 54.9% China 3.1% Source: Stenvall Skoeld & Company
  11. 11. 11 Understand the Mobile Internet Market in Asia Browser is “Killer App” for mobile internet user in China (1) Apart from voice and SMS, mobile browser is the most used application on a cell phone for mobile internet users in China. Level of Mobile Usage 1. Voice 1. Voice 2. Email 2. SMS 3. Facebook/SNS 3. Browser 4. SMS 4. Instant messaging Source: eMarketer, Arbitron, March 2012 Notes 1. The level of mobile usage in the US is represented by the percentage of survey respondents that are engaged in a particular activity; the level of mobile usage in China is measured by the average usage days per month
  12. 12. 12 Understand the Mobile Internet Market in AsiaHow Chinese Users View the Browser ?Based on UCWeb’s observation on millions of users in China and furtherverified by UCWeb’s practice with the UC Browser, Chinese users tend touse the browser as a gateway to internet services, i.e. use navigationservices to find websites they want to visit, use browser to download appsand games. It is partly due to the fact that internet addresses are not in theirnative language and it is often problematic inputting them, partly due toChina has a collectivist culture, whereas Chinese people tend to select themainstream or the popular ones. In contrast, the empty start page on amobile Safari most Americans would see on their iPhones present thebrowser more as a tool. The Startup Page of The Home Screen of UC Browser, Chinese Mobile Safari Version User enter URL or Search Users click the icons or to start using links in the personalized startup page to access the services - Recommend sites & moreThe same difference can also be found on QQ – Tencent IM client’sinterface and MSN’s interface. The former is the dominant IM client inChina, it carries service entry points in its most prominent positions whileMSN offers basic menus.Top Segment of QQ - Tencent Top Segment of MSN’s MainIM’s Interface Interface
  13. 13. 13 Understand the Mobile Internet Market in Asia UCWeb’s Perspective on A Typical User of Mobile Browser As explained in page 11, a lot of user activities take place in the browser, for many, the mobile browser is the only entry point to the internet, and the users activities are reflected in the usage of the browser. Based on the usage statistics of the 300 million (QAU) users that UCWeb has across the world, mostly in Asia, more than 95% of the users use UC Browser to read news, blogs and novels on a monthly basis, and it’s worth pointing out that over 90% of the users conduct their internet searches in the search box on the UC Browser. 95%+ 700+ Read news, blog and Pages of content novels with mobile consumed browser 90%+ 20%+ Mobile gamers Access search engine with search box on the browser 70%+ Download apps with mobile browser Source: UCWeb’s internal data
  14. 14. 14 About UCWebKey Facts & NumbersUCWeb Inc. (UCWeb) is a leading provider of mobile internet softwaretechnology and application services. Since its inception in 2004, UCWebsmission has been to provide better mobile internet experience to billions ofusers around the world. 200+million MAU, second largest user community by traffic in China. Users across 150+ countries 50+million users for mobile gaming alone. 100+million Smartphone MAU. UC Browser is the most used mobile application by 40X growth in 4 years (2) monthly effective usage time in China, reported by Arbitron. Monthly PV > 160 billionMore than 50%market share in China More than 800 R&D engineers More than 10%More than 20% market share in Vietnammarket share in India More than 10% market share in Indonesia (1) 40% market share in AsiaSource: StatCounter, Sep 2012Notes1. According to ADMA’s Digital Marketing Yearbook report for 2012, Asia has 623 million mobile internet users.2. Between March 2007 and March 2011
  15. 15. UC Mobile Internet Research Center by UCWeb

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