July 9, 2008 A combination of device availability, network speeds, content availability and consumer interest has lead to mobile Internet use reaching critical mass, states a report by Nielsen Mobile. The paper predicts that we can expect to see a rapid growth in consumer adoption and mobile marketing in the following years.

40 million US mobile subscribers, or 15.6% of mobile owners, were active users of mobile Internet services in May 2008, using the service at least once a month. A further 55 million mobile owners are subscribed to mobile Internet services, but are not active users. The 95 million mobile Internet subscribers mark a 28% increase since the first quarter of 2007, when they numbered just 74 million. Nielsen Mobile believes this consumer growth, and consumer interest, will start a chain reaction of mobile Internet usage, which will in turn spur on mobile companies to increase the Internet capacity of their products.

One of the important factors in the increased popularity of mobile Internet is the swiftly improving technology. Third generation networks, currently offered by each of the major US carriers, perform up to six times faster on data throughputs than the preceding systems – while 2G and 2.5G networks had an average throughput of 89 KB per second for a 200 KB file, 3G networks have a throughput of 531 KB per second. This is very appealing to data-hungry consumers, which the Nielsen research points to as the largest segment of the mobile Internet population. Users are most attracted to unlimited data packages, with 14% of wireless subscribers using the package (up from 10% in Q1 2007), and 50% of data users stating their preference for a fixed-fee unlimited data model. By comparison, just 2% said they would prefer a fixed-fee limited model, and only 1% said they would prefer a pay-per-use system. When it comes to the phones themselves, 38% of mobile Internet users believe that longer battery life is the most important enhancement to be made, 22% value an increase in screen size, 21% wish for more memory capacity, and 20% nominate better data inputs.

Portals like Yahoo! and Google are the most commonly visited web sites, being accessed by 36 million unique mobile Internet users as of May 2008. Email clients attracted 26 million unique visitors, and social networking and mobile banking websites attracted 5 million users each. The figures show that while consumers are flocking to mobile Internet in greater numbers, they are still quite conservative about the web pages they visit. While the average PC Internet user in the US visits over 100 domains per month, the average US mobile Internet user visits just 6.4 individual websites per month. The top web channel is Yahoo! Mail with 14.2 million monthly users, followed by Google search with 9.1 million, the Weather Channel with 8.6 million, MSN Hotmail with 7.9 million, Gmail with 7.5 million, ESPN with 6.5 million, Google Maps with 6.2 million, AOL Email with 5.3 million, MapQuest with 4.6 million, Yahoo! Search with 4.1 million, and CNN News with 4 million.

The people who react most excitedly to the Nielsen report may well be marketers. 26% of mobile Internet users recalled viewing ads while using the service, and while just 14% of mobile data users state they don’t mind relevant mobile advertising, mobile Internet users are 60% more likely than the average data user to find mobile advertising acceptable. Promisingly, 32% of mobile Internet users are open to mobile advertising if it helps to lower their wireless bill. Marketers will also be interested in the demographic breakdown of mobile Internet users, which shows the market as evenly spread across age, gender, and socio-economic lines. The mobile Internet audience (over the age of 13) is split 48%/52% between the over 35s and the under 35s. The more extreme ends of the age spectrum also balance each other out, with 4.4 million users over 55, and 5.1 million 13-17 year olds. The split between male and female users is 56%/44%, and while 24% of users have household incomes of $100,000 or more, 26% have household incomes lower than $50,000.

Mobile Internet use generated over $5 billion in 2007, and accounted for $1.7 billion in Q1 of this year. If the technology and adoption does continue to grow, it’s likely everyone will gain from it.

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