The Effect of Consumer Choice on the Mobile Internet

24 Jan 2010|Leigh Marinner

Google’s Android operating system generated 27 percent of mobile ad requests from U.S. smartphones in Q4, according to mobile advertising network AdMob’s Mobile Metrics Report for December 2009. Apple’s iPhone yielded 54 percent of U.S. smartphone requests in the previous quarter.

One of my co-workers at Cheskin Added Value said, “Thinking about Google’s biz strategy, it makes sense to put out phones not for the sake of selling hardware or truly innovating in the mobile OS space, but for the sake of generating more traffic to their search engine, the cash cow.”

This fits perfectly with Google’s strategy as I perceive it, which is to grow the mobile ecosystem, because a rising tide lifts all boats. Until someone was willing to break the back of the mobile carriers, data traffic was stagnating in the US. Before the iPhone app store, it was very difficult to bring new consumer functionality to a mobile phone in the US. The carrier controlled what was shown “on-board” in the carriers UI, and for everything else you had to type in the whole url, which was so awkward that most people didn’t bother. So users only had access to the limited numbers of apps carriers approved.

The iPhone was the first to put a huge crack in the carriers’ control, by winning the upper hand with AT&T in controlling the iPhone’s interface (which was a great decision on AT&Ts part.) Google believes the success of its mobile search efforts rely on a robust and fully functioning mobile Internet ecosystem, not constrained by operator/handset maker control which limit consumer options. The growth of the mobile ecosystem means more search and ad traffic for Google.

And the data back up this change. In Morgan Stanley’s latest Mobile Internet report, data shows that in the UK the carrier share of mobile web site access declined from 57% to 22% from 2007 to 2008.

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