Smart connected devices are fuelling the explosion in products and services across verticles. According to market analyst ABI Research, the North American handset market, driven primarily by smartphones, is estimated to have shipped 228 million handsets in 2011, for a year-on-year growth of 14%, the region’s highest in more than five years.
North America may only represent 15% of feature and smartphone units shipped globally, but due to the high proportion of high-end smartphone sales, it constitutes 40% of total smartphones sold by value globally.
With the devices connected by advanced next generation networks and mobile broadband, mobile internet use in the USA is now about two years ahead of Western Europe, according to Forrester Research.
The research highlights changes in consumer behaviour as well as market trends. In 2011, less than one-third of mobile phone owners in Western Europe connected to the mobile internet at least monthly; this equates to 100 million individuals. In the USA, monthly mobile Internet penetration reached 114 million people, approaching half of handset owners. According to Forrester, even the UK, which is one of the leading proponents of mobile internet usage in Europe, lagged behind the US – with less than 40% of mobile phone users connecting to the mobile Internet at least monthly.
Key factors that have enabled the USA to lead include higher smartphone penetration, competitive data plans, higher post-pay subscriber penetration, and faster rollout of 4G networks and handsets. In 2011, more than 17 million U.S. mobile phone users already had 4G compatible handsets, compared with only 1.6 million in Western Europe.
As a result of the advanced connectivity, customers in the USA are driving strong demand for online and mobile video that could yield US$22 billion for pay-TV advertising by 2016 (ABI Research). This will represent 30% of the US pay-TV advertising market.
New technologies are achieving scale within broadcasters’ advertising systems, notably audience measurement and tracking, targeted advertising, interactive advertising, Video on Demand and multi-screen advertising, and other techniques, including companion devices. Numerous technology components are required to deliver new ad formats and the vendor ecosystem will rapidly expand to address these opportunities accordingly:
• Advertising-specific hardware and software systems, such as ad servers, ad splicers, ad decision systems, and traffic and billing systems
• Advertising-specific components of set-top box middleware, such as measurement and reporting tools, interactive stacks, and interactive applications
• Advertising-specific VoD software