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The Mother of All Markets

This is the second post in a multi-part series on the mobile web that previews some of the topics for my presentation next week at the Portland Web Innovators Forum. RSVP for the event here.

Dr. Eli Harai, CEO of Sandisk, recently declared that “The mobile phone market is the mother of all growth markets.” I usually recoil when hearing what sounds like hyperbole.

However, Dr. Harai isn’t exaggerating when it comes to the size of the mobile market.

There are 3.3 billion mobile phones in the world—that is one for half the world’s population. Tomi T Ahonen has an exceptional article that helps put 3.3 billion in perspective by comparing it to other technology:

mobile-comparison-chart.jpg

As you can see from the chart above, there are more mobile phones in the world than there are cars, televisions, telephones, PCs, and credit cards. And the number of mobile phones continues to grow at astronomical rates:

The global population expands by three people a second, according to International Data Base, an arm of the U.S. Census. In the same second, 38 wireless devices will be sold. At that rate, within 24 months another billion devices will be added to the 2.5 3.3 billion currently in circulation. — Source: USA Today [ed. number of phones corrected]

With 3.3 billion phones in use today and only 6.6 billion people on the planet, it would seem like growth would slow down, but instead the number of mobile phones being sold continues to increase. There are a couple of reasons for this.

First, in many countries in the world, mobile services are over subscribed because people have both a home and a work cell phone. Italy, for example, has a 140% subscription rate. Therefore, while there are 3.3 billion phones in use, there are not 3.3 billion people with mobile phones.

Second, many developing countries have eschewed building the costly infrastructure required to support land lines and have instead focused on building mobile networks. Recycled phones from other countries are often sold or given away in developing countries.

So we have a very large market and one that continues to grow. What does this mean in real dollars? Again, we turn to Tomi T Ahonen:

The total service revenues for mobile already passed 720 billion dollars last year (Informa Jan 2006). Toss in another 100 billion for handset sales and some more for network infrastructure and we’re at a total industry of over 875 billion in size by 2007 – well on target to hit a trillion dollars as an industry by the end of the decade.

Tomi also asserts that SMS alone accounted for 100 billion in revenue last year. That is as “big as total Hollywood box office, total Hollywood DVD sales and rentals, total music industry revenues and total videogaming software revenues in 2007 – combined.

If that doesn’t cause you to sit up and take notice, I don’t know what will.

What we have with mobile phones is the largest media market in the world by a long shot and a market that is continuing to grow.

So why aren’t more businesses working on their mobile strategies? To answer this question, we’ll take a closer look at both the history of the mobile phone and the parallels to the ’90s Internet expansion in future posts.

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