By Colin Knudsen 
As we know, the penetration and use of mobile devices has absolutely exploded. In the U.S. alone there are approximately 320 million mobile subscriptions representing a penetration rate of approximately 102%.
Mobile devices are increasingly smart and powerful computers. This era of mobile computing is driving one of the largest shifts in consumer behavior in the last half century and this shift is occurring at a much faster pace than internet access and PC adoption. In fact, the number of smartphones activated in the five years after the introduction of the iPhone in 2007 is two times the increase in the number of internet users after its first five years. According to Nielsen, smartphones now represent 55% of the U.S. handheld device market and growing rapidly. The adoption of tablets is even more impressive. The Online Publishers Association just released a study citing 74 million tablet users in the U.S. after only two years, significantly outpacing smartphones which took seven years to reach the same level of adoption.
So the adoption and proliferation of affordable and powerful consumer devices is occurring at unprecedented rates. The chart below shows the ownership penetration of consumer “gadgets” in the U.S. since 2006. At the beginning of 2102, 88% of American adults own a mobile phone, 57% have a laptop, 19% own an e-book reader, and 19% own a tablet while 13% of U.S. adults own a laptop, smartphone and tablet. Approximately six in 10 adults (63%) go online wirelessly with one of those devices.
Cisco estimates that by 2015 nearly 70% of internet users will use more than five network-connected devices, up from 44% at the end of 2011. The continued proliferation of new mobile devices and form factors, increases in computing power, longer battery life, improved screen resolution, and other quality enhancements, will drive mobile device penetration and usage, expectations and behavior. Consumers already expect access to their content, applications and subscriptions anytime, from anywhere, over any device and from any network. As both fixed and mobile devices and multiple device ownership proliferates consumer expectations for ubiquitous access to content will escalate.
The Cloud is increasingly the platform that provides the foundation on which this seemless interactivity will occur. Mobile devices have memory and speed limitations which cloud applications and services mitigate. For example, a consumer with an 8 GB smartphone who streams video and music will consume more content over the course of two years than can be stored on the device itself. Similarly, a smartphone user adopting Netflix, Pandora, and Facebook will generate more than twice the volume of traffic generated by a smartphone user adopting only email and web applications. So cloud applications will increasingly power and enhance the functionality of our mobile devices. In fact, according to Cisco cloud applications are expected to account for 71% of total mobile data traffic in 2016, compared to 45% at the end of 2011. Mobile cloud traffic is projected to grow 28-fold from 2011 to 2016, a compound annual growth rate of 95%.
As goes the consumer so goes the enterprise. Consumer behavior trends of mobility, social network usage and ownership of multiple devices are exerting pressure on businesses to make enterprise applications available in similar ways. A significant proportion of the mobile devices used in the business arena today are personal devices, sourced by the employee rather than provided by the employer company. Research firm Forrester forecasts that 200 million of the 350 million employees who will use mobile devices for work in 2016 will use their own devices rather than devices provided by their employers while the average business will need to support twice as many end-user devices in 2015 compared to the end of 2010. This ‘bring your own device’ culture is increasingly leading to the embrace by corporate IT departments of the consumerization of the enterprise, further driving cloud adoption.
Looking ahead, mobile and cloud platforms and technologies are enabling a profound change in the way that we consume content and conduct commerce. The ubiquity of wireless connectivity combined with increasing functionality and speed of connected devices and networks will drive continued growth in the creation and consumption of media, content and products enabled by and across these platforms. The evolving mobile market will result in more rapid internet penetration globally while the functionality of mobile devices will continue to increase inherently and through applications on the cloud.
Colin Knudsen is a co-founder of Coady Diemar Partners, a NYC-based boutique investment banking firm serving mobile, digital media, advertising and marketing services companies. Visit www.coadydiemar.com for additional information about Coady Diemar and click on the Resources tab for additional thoughts on the mobile sector.
