Wednesday, 29 August 2007

The State of the Union

There is a lot of discussion on Forum Oxford at the moment concerning the US market and generally represents the perennial view that the US is a long way behind Europe.

In order to correct this view or at least offer up sensible alternative evidence, Russell Buckley from Mobhappy and AdMob comments on the current usage statistics from AdMob which shows that the US generates between 20-25% of global advertising revenue on mobile at the moment.

There are always sceptics, so here is another. During my time in T-Mobile, the US team generated 2.5 times the downloads of the European Team despite having a quarter of the subscribers.

I think there might have been a case for the US being behind on mobile internet penetration previously. US operators only allowed people to use mobile data if they were subscribed to a data package. This meant that the take-up of mobile data was on a similar trajectory to that of phones in the first place (which was slow everywhere but particularly in the US). In fact on the US style pay upfront for a generous package means that people do not subscribe until they are certain it is going to be reasonable value.

As a result, early take-up was better in Europe but people quickly worked out that the cost was high and stopped using the service. Early adopters are now moving back in by getting involved on all you can eat bundles, but even here there is a high discrepancy between markets: the UK is moving this way quickly; Germany is still miles behind.

Current statistics suggested 25% of the mobile population in the UK and US are using mobile internet. It is my very strong hunch that the US, having caught up, shall continue to grow more quickly and that these users are less constrainted by cost fears and thus will be more progressive users.

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