What Consumers Want

Trends in Mobile Applications and Services

Simon Walker, Sales Director- Mobile

swalker@comscore.com, +44 7921 455569
Overview

 Mobile market landscape

– Application and browsing trends
– Content consumption
 Key market drivers
 Who are the big brands and services?
– Is there a difference between Europe and US?
 Who are these “consumers”?
– And which handsets do they have?
 A Way of Making money
– Where is mobile advertising going?
 Five things you probably didn’t know about mobile media consumption
 Where should you be placing your bets?

© comScore, Inc. Proprietary and Confidential. 2

Community of mobile media users continues to grow

 Mobile Media Users (mobile browsers, application users and content downloader’s) in Europe grew 24%
Year on Year - almost 15.3 million extra in June 2010 than in June 2009.

Mobile Media Users

40%

35% 34%

30%
28%
25%
% Market

20%

15%

10%

5%

0%
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10

Mobile Media = Connected Media (except SMS) in MobiLens Product: MobiLens

Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 3 Country: EU5- N= 68,658
Similar proportion are mobile internet browsers & app users

 A quarter of EU5 mobile owners browse the mobile internet – over 18 million extra mobile internet users
in June 2010 compared to June 2009, 43% growth.

 Don’t believe the hype: 75% of mobile phone owners are not application users.
 Social networking users are showing the highest gains with 100% YoY growth.
 12.7% are using IM and users are growing 43.8% YoY.
Mobile Internet Trends
30.0%
25.9%
25.0% 25.0%

20.0%
19.1%
% Market

15.0% 14.9%
12.7%
10.0%

5.0%

0.0%
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10

Used Application (except native games) Used Browser IM Email (work or personal) Social Networking

Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 4 Country: EU5- N= 68,658
Ringtones, ringback tones and graphics are not growing

Mobile Content Trends

4.5%

4.0% 4.0%
3.9%
3.8%
3.5%

3.0%
2.8%
% Market

2.5%
2.5%
2.0% 2.0%

1.5% 1.7%

1.0%

0.5%

0.0%
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10

Games Ringtones Graphics Ringback Tones

Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 5 Country: EU5- N= 68,658
Overview

 Mobile market landscape

 Key market drivers
 Who are the big brands and services?
 Who are these “consumers”?
 A Way of Making money
 Five things you probably didn’t know about mobile media consumption
 Where should you be placing your bets?

© comScore, Inc. Proprietary and Confidential. 6

Growth of the key market enablers continues

 Two of the market enablers (smartphones and 3G devices) are now firmly entrenched in the market.
 The most important enabler, unlimited data plans, still has limited penetration in EU5 (6.7%) however it
did grow 80.0% year on year.

 In comparison 26.0% of US mobile users subscribe to unlimited data plans.

Growth of Market Enablers

50.0%
45.0% 44.8%
40.0%
35.0% 37.2%
30.0%
% Market

25.0% 25.7%

20.0%
15.0% 18.6%

10.0%
6.7%
5.0%
3.8%
0.0%
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10

Smartphone Owners 3G Device Owners Unlimited Data Plan Subscribers

Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 7 Country: EU5- N= 68,658
Overview

 Mobile market landscape

 Key market drivers
 Who are the big brands and services?
 Who are these “consumers”?
 A Way of Making money
 Five things you probably didn’t know about mobile media consumption
 Where should you be placing your bets?

© comScore, Inc. Proprietary and Confidential. 8

Search most popular activity for mobile browsers

 Almost 41% of mobile internet users search. In comparison , 80-100% of PC Internet browsers use
search, depending on the EU country.

 The mobile internet is as much about connecting with friends and family as it is about news and info.
 Pattern is the same both in the US and Europe.

Top Genres for Mobile Browsing Search

Social Networking
Movie Information 15.8%
Personal Email
Stock Quotes or Financial News 17.3%
General Reference 18.1% News
Photo or Video Sharing 19.3% Weather
Tech News 19.4% Sports Information
Maps 19.5%
IM
Work Email 20.6%
Entertainment News 23.9% Entertainment News
IM 25.1% Work Email
Sports Information 28.7%
Maps
Weather 29.8%
News 32.3% Tech News
Personal Email 35.1%
Social Networking 36.0%
Search 40.7%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%

Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 9 Country: EU5- N= 68,658
Most popular apps are the same either side of the Atlantic

 Maps, social networking and weather predominate in both Europe and US

Most Popular Application Use Genres

9.0%

8.0%

7.0%
Proportion Total Users

6.0%

5.0%

4.0% EU
US
3.0%

2.0%

1.0%

0.0%
Maps Social Weather Search News Photo Sports Info TV Guide Ent News Traffic
Networking Sharing

Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 10 Country: US – N=32,009 + EU5 - N= 68,658
More differences in ranking of brands accessed by apps in EU vs US

 Unsurprisingly, brands have different level of following in different territories.

 However, there are global brands that dominate in both Europe & US: Google, Microsoft, Yahoo! &
Facebook.

Most Popular Application Brands

12.0%

10.0%
Proportion Total Users

8.0%

6.0%

4.0% EU
US
2.0%

0.0%

Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 11 Country: US – N=32,009 + EU5 - N= 68,658
US lagging behind Europe on mobile music uptake

 The number of people listening to music on their mobile phone in the US is almost half the penetration in
Europe.

 There are also slightly less people downloading music directly to their mobile devices in the US. In EU5
momentum is building with 45% growth in the number of people downloading music over the air (OTA).

Listening to Music on Mobile Downloaded Music Direct to

Device Device
30% 2.0%
2.0% 1.9% 50%
25%
25% 1.8% 45%
1.6% 45% 40%
20% 1.4% 35%

% YoY Change
% Market

% Market
14% 1.2% 30%
15%
1.0% 25%
0.8% 23% 20%
10%
0.6% 15%
5% 0.4% 10%
0.2% 5%
0% 0.0% 0%
EU 5 US EU 5 US
Downloaded Music Direct to Device % YoY-Growth
Product: MobiLens
Data: Three month average ending March 2010
© comScore, Inc. Proprietary and Confidential. 12 Country: EU5 N= 68,658 + US N=32,009
Overview

 Mobile market landscape

 Key market drivers
 Who are the big brands and services?
 Who are these “consumers”?
 A Way of Making money
 Five things you probably didn’t know about mobile media consumption
 Where should you be placing your bets?

© comScore, Inc. Proprietary and Confidential. 13

The average European mobile media user is 33 and 41% are female

 Younger demographics create their own ringtones, use social networking services and listen to music
(web 2.0 type services).

 Mobile Internet services (browsing, apps and e-mail) skew 60-65% male.

Demographics of Mobile Media Activities

60%
Higher on chart = more female
Further to right = older
55% Made Own Ringtone Size of bubbles = # of users
Played Games
50% Ringback
Percent Female

Mobile Media
45% Listened to Music
Email
40%
Ringtone Used Browser
Social Networking Unlimited Data Plan
35%
Used App
30%

25%
28 29 30 31 32 33 34 35

Median Age

Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 14 Country: EU5- N= 68,658
 iPhone application genres fall into expected demographic groups

 All application use is skewed towards males

 Tech news, sports information and financial news applications are dominated by male users
 Most popular information applications – maps and weather – are generally used by an older audience
 Social networking and entertainment applications have the greatest proportion of female users
Demographic Profile Apple Users by Application Genre
40%
Entertainment News Maps
35% Social Networking Search Weather
Restaurant Information
Business Directories
Television Guides
30%
% Female

Online Retail News

Auction Sites Traffic Reports
General Reference
25% Movie Information
Photo or Video Sharing
20% Sports Information

Size of bubbles = % of the market Tech News Stock Quotes or Financial

15% Higher on chart = More female News
Further to right = Older

10%
28 29 30 31 32 33 34 35 36
Median Age
Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 15 Country: EU5- N= 68,658
Nokia leads European handset market share in mobile media users

 Although the iPhone gains a large amount of hype, it still only represents 4.8% of total mobile owners in
EU5 and 13.3% of all mobile media users.

* Total device owners market share in bold, mobile media market share numbers in red.

OEM Market Share for Total Market and Mobile Media Users
40.0% 35.0%
36.0%
35.0% 30.8% 30.0%

30.0%

% Mobile Media Users

25.0%
25.0%
% Market

20.8% 20.0%
20.0% 17.3%
15.0%
15.0% 12.6% 13.3%
11.3%
7.9% 10.0%
10.0%
7.6%
5.6% 4.8%
5.0% 5.2% 5.0%
2.9% 2.2% 1.6%
0.4%
0.0% 0.0%
Nokia Samsung Sony Ericsson LG Motorola Apple RIM Sagem

Total Market (All Device Owners) Mobile Media

Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 16 Country: EU5- N= 68,658
Symbian losing smartphone market share to Apple, Android & RIM

 Whilst the number of European smartphone owners has increased 40.2% YoY there has been significant
changes in the share by operating system. Symbian based handsets still command a 55% market share.

 Over this period Apple has grown share to almost 18.8%, from 9.7%. Microsoft has dropped from 15% to
11.8%.

 Although Android has very low penetration, it has rapidly grown to represent 5.1% of smartphone owners
in the EU5.
Smartphone Share Trend
80.0%

70.0%
% Smartphone Owners

60.0%
55.4%
50.0%

40.0%

30.0%

20.0% 18.8%
11.8%
10.0% 8.6%
5.1%
0.0%
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10

Microsoft Symbian Palm RIM Apple Google

Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 17 Country: EU5- N= 68,658
The Droids Are Coming: Growth in Android Penetration Outstripping
Apple and RIM

 Even though Apple has a bigger market share and has more devices in use, Android has shown a
dramatic growth in the last quarter.

 While Apple device usage grew 70.2% year on year, Android rockets with a 1,329% year-on-year growth

RIM, Apple and Android Device Penetration

30.0%

25.0%
% of Smartphone purchases

22.6%
20.0%
19.7%
15.8%
15.0%

10.0% 10.5%

6.8%
5.0%

1.6%
0.0%
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10

RIM Apple Android

Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 18 Country: EU5- N= 68,658
Overview

 Mobile market landscape

 Key market drivers
 Who are the big brands and services?
 Who are these “consumers”?
 A Way of Making money
 Five things you probably didn’t know about mobile media consumption
 Where should you be placing your bets?

© comScore, Inc. Proprietary and Confidential. 19

Mobile adverts can be Targeted by device

 Apple and Nokia device owners are more male

 Samsung and LG mobile browsers younger and have an even gender split
 Motorola browsers are older
55% Demographic Profile of Mobile Internet Browsers by OEM
50% Samsung Size of bubbles = % of the market
Higher on chart = More female
LG Further to right = Older
45% RIM
% Female

40% Motorola

Sony Ericsson
Nokia
35% Apple

30%
Android

25%
27 29 31 33 35 37 39 41 43
Median Age

Product: MobiLens
Data: Three month average ending June 2010
© comScore, Inc. Proprietary and Confidential. 20 Country: EU5- N= 68,658
Mobile content still the most popular sector for advertising in the UK

 Mobile content and publishing accounts for 60% of mobile advertising campaigns
 The industry shows signs of maturing with growth in the proportion of campaigns from financial
institutions and consumer discretionary spending brands – up to 25% from 11% last year.

July 2009 July 2010

0% 2%

15% 11%
6% 10% 15%
5%

10%

3%

63% 60%

Consumer Discretionary Financials

Information Technology Mobile Content and Publishing
Telecommunication Services other
Product: Ad Metrix Mobile
Data: July 2010
© comScore, Inc. Proprietary and Confidential. 21 Country: UK
Growth of inventory outstripping mobile ad campaigns bought

 The number of products advertised is not growing as fast as the number of users browsing
 Mobile advertising industry needs consistent metrics and simplified trading exchanges to take advantage
of explosion in inventory

Mobile Browsers vs Products Advertised

700 16,000,000
650 15,000,000
Number of Products Advertised

Unique News + Info Browser

600
14,000,000
550
500 13,000,000

450 12,000,000
400 11,000,000
350
10,000,000
300
250 9,000,000

200 8,000,000

Products Advertised News + Info Mobile Browser

Product: Ad Metrix Mobile

Data: June 2010
© comScore, Inc. Proprietary and Confidential. 22 Country: UK
Overview

 Mobile market landscape

 Key market drivers
 Who are the big brands and services?
 Who are these “consumers”?
 A Way of Making money
 Five things you probably didn’t know about mobile media consumption
 Where should you be placing your bets?

© comScore, Inc. Proprietary and Confidential. 23

Those things you didn’t realise about the mobile media world

1. UK mobile phone users use Facebook for an aggregate of over 2,500,000,000

minutes each month
– Mobile users are more engaged on Facebook than those using PCs.
2. In Europe, 75% of mobile phone users do not use applications
– Consider carefully how you want to reach a mobile audience
3. The UK mobile audience consumes more than 9,000,000,000 page views
every month on their phones
– That’s a lot of potential advertising inventory
4. Nearly 90% of European Apple device users use applications in comparison
to 38% of Symbian device owners
– But Apple represent 4.8% of the devices in use, Symbian 14.2%
5. Almost 11m European mobile users accessed dating sites on their phones
in June
– 22% were males aged 25-34 compared to only 8.7% of similarly aged females
Product: MobiLens Product: GSMA MMM
Data: Three month average ending June 2010 Data: April 2010 (pre-production)
© comScore, Inc. Proprietary and Confidential. 24
Country: EU5- N= 68,658 Country: UK
Overview

 Mobile market landscape

 Key market drivers
 Who are the big brands and services?
 Who are these “consumers”?
 A Way of Making money
 Five things you probably didn’t know about mobile media consumption
 Where should you be placing your bets?

© comScore, Inc. Proprietary and Confidential. 25

Takeaways to ponder

 There is a growing market for mobile media consumption

– Significant opportunities exist in applications and mobile service delivery
 Hot areas are in social networking, instant messaging & mapping
– Not necessarily the default of gaming
 The US and European markets look very similar in terms of trends
– US is ahead on flat data rate penetration - key indicators can be seen here
– Only significant difference in handset landscape is absence of Nokia from US
 The Android ecosystem is the fastest growing
– Users exhibit similar media consumption characteristics to iPhone owners
– Android devices successfully targeting higher volume, mid-tier price points
compared to Apple’s high end market.
 Consider the market carefully – how will you reach your target audience
– The reality as revealed by measurement is often different from intuition

© comScore, Inc. Proprietary and Confidential. 26