Graham Brown of mobileYouth looks at the 2 speed handset economy for youth. What's really going on? http://www.mobileyouth.org/mobile-trends/

1. !
The$Two$Speed$Mobile$Handset$Economy$
What’s'going'on'in'the'youth'handset'market?'
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The$handset$market$is$polarizing$into$2$distinct,$discrete$markets$
• Primary!Handsets!(PH)!
• Secondary!Handsets!(SH)!
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Impact$of$the$2$Speed$Economy$
• Renewal!cycles!in!developed!markets!slow!down!
• Renewal!cycles!in!developing!markets!both!slow!down!and!speed!up!(PH!
slows!down,!SH!speeds!up)!
• Critical!mass!for!youth!innovation!in!developing!markets!
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Implications$for$Handset$Manufacturers$and$Mobile$Operators$
Understand!the!key!distinction.!Are!you!targeting!the!PH!or!SH!markets?!Each!
market!has!distinct!drivers!and!buying!patterns.!Vendors!occupying!the!middle!
ground!(e.g.!SonyEricsson,!Motorola,!Samsung!and!Nokia)!need!to!identify!key!
market!Beachheads!of!support!to!retain!and!grow!their!position.!!
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mobileYouth!–!youth!mobile!culture!since!2001!!
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2. !
2$Distinct$Markets$within$Markets!
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• The!Primary!Handset!is!often!a!high!end!display!device!–!such!as!a!
Blackberry!or!Iphone.!Of!all!the!handsets/SIMs!owned!this!is!most!likely!
the!one!on!contract.!Youth!will!keep!the!handset!in!a!visible!location!
(hand,!on!clothing)!and!use!it!both!as!a!status!symbol!and!for!key!services!
(such!as!BBM,!mobile!internet,!FB!or!texting).!!
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• The!Secondary!Handset!is!a!low!end!device,!sometimes!only!SIM!card.!In!
emerging!markets,!these!handsets!are!either!Shanzai!phones!(knockUoffs)!
or!cheap!domestic!brands!(as!in!India).!Secondary!handsets!are!often!
prepaid!and!kept!in!discrete!locations!(pocket,!bag).!Youth!will!use!
Secondary!Handsets!for!calling!family,!girl/boyfriends!where!long!voice!
conversations!are!required.!In!some!cases,!youth!prefer!dual!or!triple!SIM!
handsets!to!allow!them!to!negotiate!between!multiple!network!offers.!!
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mobileYouth!–!youth!mobile!culture!since!2001!!
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3. !
Developed$vs$Developing$Markets$
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Developed$Markets:$
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In!developed!markets,!youth!are!gravitating!towards!a!oneUhandset!economy!
dominated!by!Primary!Handsets.!(Telegraph)!
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Google’s!Android!share!of!the!smartphone!operating!system!market!in!the!
US!fell!slightly!in!the!first!quarter!of!this!year,!according!to!market!
intelligence!firm!IDC.!Android’s!share!of!the!market!was!at!52.4!per!cent!
at!the!end!of!last!year!and!had!dropped!to!49.5!per!cent!by!March,!the!
figures!show.!!
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Apple’s!iPhone!increased!its!share!of!the!market!over!the!same!period,!
growing!from!17.2!per!cent!to!29.5!per!cent.!RIM’s!BlackBerry!continued!
the!steady!decline!which!has!been!ongoing!for!more!than!a!year,!dropping!
from!37.8!per!cent!of!the!market!a!year!ago!to!just!13.8!per!cent!in!March.!!
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Developing$Markets:$
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In!developing!markets,!youth!are!opting!for!multiple!handsets!–!one!expensive!
Primary!handset!for!display!combined!with!a!cheap!locally!manufactured!
Secondary!handset!used!for!calls,!texting!etc.!!
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In!Vietnam,!low!end!locally!manufactured!handsets!have!become!popular!
(Vietnam!News):!
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ChineseUmade!mobile!phone!handsets!with!Vietnamese!brand!names!
have!overcome!consumer!doubts!about!poor!quality!and!gained!a!toehold!
on!the!lower!end!of!the!domestic!market!–!with!the!past!two!years!
witnessing!the!appearance!of!affordable!mobile!phones!with!such!brands!
as!Hanel,!QUMobile,!FUmobile,!WellcoM!and!MobiStar.!
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In!Asia!and!Middle!East,!Chinese!manufacturers!flooding!local!markets!have!
potentially!catalyzed!both!social!and!technological!change:!
• How!Shanzai!phones!are!driving!cloud!computing!(Tech!Node)!!
• How!China’s!mobile!handset!manufacturers!are!toppling!governments!in!
India!and!Middle!East!(Fast!Company)!!
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In!Indonesia,!new!startups!like!Nexian!promise!to!serve!the!growing!market!for!
dual!handsets!(Startup!News):!
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• Nexian!is!2nd!to!Nokia!in!handset!sales!in!Indonesia!
• Nexian!have!their!own!BBM!client!(Nexian!Messenger)!
• Their!market!is!“middleUlow!class”!
• Their!phones!start!at!IDR!99.000!(US$11)!
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mobileYouth!–!youth!mobile!culture!since!2001!!
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4. !
Market$Drivers:$
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• Teenage!Pirates!exploring!new!handset!features!and!launches!!
• Price!–!Mobile!operators!and!domestic!manufacturers!push!heavily!
discounted!deals!!
• Growth!in!Smartphones!–!Youth!want!smartphones!but!are!limited!in!
financial!resources.!They!need!to!offset!expensive!contracts!with!a!
Secondary!Handset!that!can!facilitate!their!dayUtoUday!mobile!behavior.!!
• Youth!Churn!–!loyalty!to!brands!remains!low!due!to!a!general!Broadening!
strategy!operated!by!mobile!companies!as!opposed!to!one!of!Deepening.!
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More$Trends$
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If! you! liked! this! free! trends! report! from! mobileYouth! then! why! not! check! out!
more!downloads!like!this!on!our!Youth!Mobile!Trends!Page.!
!
Relevant!trends!include:!
*!Trend:!Curation!is!Innovation!(mobile!apps)!
*!Trend:!Discrete!Social!Media!
*!Trend:!Droidettes!(will!teens!drive!Android?)!
*!Trend:!Arrival!(What!is!driving!Blackberry!Youth!Trend!in!the!Emerging!
Markets?)!
*!Trend:!Weibo!Hacking!(How!are!Teens!reclaiming!Social!Space?)!
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mobileYouth!–!youth!mobile!culture!since!2001!!
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5. !
Contact$mobileYouth$
!
We’ve!been!researching!and!making!sense!of!Youth!Mobile!Culture!in!65!
countries!since!2001.!To!talk!to!a!youth!specialist,!send!an!email!to:!
josh.dhaliwal@mobileyouth.org!
!
Josh$Dhaliwal,$Director$
http://www.mobileYouth.org!
http://www.mobileYouthreport.com!
!
UK:!+44!20!3286!3635!
North!America:!+1!646!867!3635!
South!Africa:!+!27!11!08!3635!1!
Asia:!+852!8176!3650!
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mobileYouth!–!youth!mobile!culture!since!2001!!
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6. THE MOBILEYOUTH 2013 REPORT
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mobileYouth:
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MOBILEYOUTH
youth marketing mobile culture since 2001

8. THE MOBILEYOUTH 2013 REPORT
http://www.mobileyouth.org
MOBILEYOUTH
youth marketing mobile culture since 2001