Out of all the countries examined, Italy leads in smartphone penetration with 47 percent of young people ages 15-24 owning a smartphone, compared to 31 percent of adults over 25. Smartphone penetration among European youth averages 28 percent in the countries surveyed, while penetration among older adults in Europe is 27 percent. Twenty-eight percent of U.S. mobile subscribers have smartphones. Youth in the United States exceed the population average smartphone penetration by 5 percent.

All countries tend to skew male in smartphone adoption with one notable exception, the US, where 55 percent of smartphone users age 15-24 are female. In the overall U.S. smartphone population 55 percent were male.

• For more information on global youth cellphone trends and usage, download Mobile Youth Around the World.

The growing popularity of smartphones like Apple’s iPhone, RIM’s Blackberry devices and a variety of Google Android-based models on the market, has accelerated the adoption rate. Among those who acquired a new cellphone in the past six months, 41 percent opted for a smartphone over a standard feature phone, up from 35 percent last quarter.

Compared to Europe, this puts the U.S. on a par with the U.K., which has a similar smartphone penetration rate, but well behind Spain, which boasted a smartphone penetration rate of 37 percent last quarter, and Italy, which had a smartphone penetration rate of 33 percent last quarter.  According to Nielsen’s new Global Smartphone Report, Symbian is the most popular smartphone operating system in Europe.

In the U.S., the Apple iPhone OS has practically caught up to the RIM Blackberry OS, with 28 percent and 30 percent marketshare respectively. Meanwhile, Google’s Android OS is now at 19 percent and growing. Among those who chose a device in the last six months, however, Android took the lead in Q3, while RIM Blackberry and Apple iPhone are practically tied for second place.

While owners of Android smartphones tend to be younger than those attracted to other operating systems – 50 percent of Android owners are under the age of 35 – Apple has the most smartphone users under the age of 44.

Interestingly enough, smartphone owners in the U.S. are more diverse than their featurephone counterparts: One in five smartphone owners are Latino, compared to just 9 percent of featurephone owners.

Venkatesh Bala, Chief Economist, The Cambridge Group

SUMMARY: Consumers around the world are hungry for access to information and communication, especially in countries with a growing middle class. Defying classic economic models, the demand for communication (cell phones) leads traditional media growth, signifying a global, disruptive phenomenon. The demand for information via the Internet follows slower, more predictable growth patterns. The implications for marketers: lead with mobile advertising in high-growth, emerging economies.

The demand for information and communication is being reshaped around the globe, especially in countries with a growing middle class such as the Russia, India and China and some N-11 (Bangladesh, Egypt, Indonesia, Iran, Nigeria, Pakistan, the Philippines, South Korea, Turkey and Vietnam) economies. Recent projections from the International Monetary Fund indicate that over the next five years, growth in real Gross Domestic Product (GDP) in emerging markets will be substantially higher than in developed economies.

Notably, the large BRIC economies are expected to expand by four to five percentage points more each year from 2010-2015 than the established markets of G-7 nations including the U.S., U.K., France, Germany, Italy, Canada and Japan.

New Markets, New Models
Market players in media, telecommunications, consumer products and financial services seeking to reach the rising middle class in forming markets will need to re-think standard market development approaches. The key to success lies in understanding the unique ways in which the demand for information and communication will evolve, and how those patterns differ from established countries.

A simple way to think about the demand for information and communication is to examine Internet and mobile phone penetration for every 100 people in a country. Analyzing the relationship of those two technology penetration levels with other variables such as income and time provides a good forward looking window into demand evolution.

Defying Classic Economic Models
The difference in Internet (information) and mobile phone (communication) patterns and trends between developing and emerging economies is striking. Internet penetration for established economies follows a fairly typical pattern, rising with income levels, and requiring a threshold of around $20,000 of per capita GDP to achieve 50% penetration.

Not so for mobile communication, for many reasons, several of which are raised here. First, mobile penetration often exceeds 100% because people own multiple mobile phones. Second, while mobile phone penetration also rises with per capita GDP, it happens earlier, and faster, than Internet adoption. Instead of a $20,000 threshold, in many countries mobile phone penetration exceeds 50% with a per capita GDP as low as $5,000. In middle income countries such as Russia and Saudi Arabia, mobile phone penetration rates are even higher than those of more advanced economies such as the U.S. and Canada because mobile is an affordable, accessible alternative to the Internet. Altogether, the analysis on every dimension suggests that mobile communication is a truly disruptive phenomenon, acting on a global scale.

Uptake Outlook
Over the next 5-10 years, mobile penetration will rise to roughly 140 phones per 100 inhabitants, even in very low per capita GDP countries, and then rise gradually with income. At that point, the gap in mobile communication between developed and emerging economies will have largely disappeared, although some differences in technological sophistication will remain. In fact, within emerging markets, mobile communication may actually foster greater business and GDP growth, creating a feedback loop which will further boost mobile penetration, which is part of the disruption caused by this technology.

What Advertisers Think
Research conducted by The Cambridge Group and the Columbia University Business School on the future of advertising found that different media had different roles in the minds of advertisers. For example, TV was associated with achieving reach and awareness among key audiences, while online/Internet was viewed as better suited for targeting, reaching an engaged audience and the ability to measure ROI.

In developed countries, a combination of TV and Internet can produce effective advertising, enhanced by the addition of the emerging mobile platform. In emerging economies however, Internet penetration will still be low by 2014, and any ad campaign relying on the Internet as an integral component will miss out on a large section of the middle class.

Reverse Innovation
Because the vast majority of world economies can be classified as mobile dominant versus mobile/Internet balanced, a reverse innovation model is evolving, where effective mobile advertising platforms are identified first in emerging markets, then transferred back for further refinement in established markets. The implications of the disruptive growth associated with mobile technology in emerging markets also should readily transfer to other industry sectors.

For example, mobile banking holds much greater potential than online banking, with a high likelihood that it will leapfrog online financial activity in emerging markets. Value-add services ranging from personalized weather reports, to product and price information on-demand, to location-based and remotely-activated services will continue to bolster demand for mobile offerings.

Proof of the middle class appetite for mobile applications and the potential for businesses in developed economies can be found in the success of the iPhone. At last count, the iPhone store offered more than 200,000 individual applications. The mobile application potential is virtually limitless for companies with an innovative bent, quick to move on media trends. In advanced economies, the advent of 4G will blur the distinction between mobile and Internet, as consumers increasingly access the latter through mobile devices.

A vibrant set of mobile advertising solutions will be an essential ingredient for long-term growth in emerging markets to ensure adequate trade-up to higher price points and brands as per capita income rises. The respective importance of different media by market development suggests that mobile serves as a substitute for the Internet among the middle class in emerging markets for the distribution of broad-based marketing messages, and a complementary platform in established economies. Like any good investment, timing is everything, and mobile should be the leading-edge technology deployed by advertisers in developing markets and added to the portfolio in established sectors.

American consumers who don’t qualify for a traditional post-paid cell phone plan are driving the growth of the pre-paid wireless marketplace. This segment of the wireless market has grown at higher rates than the post-paid market, in part due to the recent recession.

However, even in today’s tough economy, this segment of low-credit prospects represents a discrete subset of the overall wireless market. Acknowledging this, pre-paid wireless marketers have expanded their horizons searching for other reasons people choose a pre-paid plan.

A close look at our latest Convergence Audit reveals the top non-credit related reasons consumers choose a pre-paid wireless plan. These reasons all boil down to the plans’ primary benefit ─ the simplicity of not having a long-term, uncapped contract.

Together, nearly 50% of the respondents who have a pre-paid wireless plan gave these as the primary reason they opted for this type of plan.

Understanding these factors better allows marketers to cast a wider reach within the marketplace and potentially capture increased market share.

Of greater interest, the people who offered up these divergent reasons for having a pre-paid phone differ from one another. For example, certain groups value simplicity. For others, budget control is the focus.

As this chart below shows, when we look at these customers through Nielsen’s PRIZM Lifestage Groups, segments like Mainstream Families and Sustaining Families are more likely to have a pre-paid cell phone for budget control purposes. They consist of child-filled, middle- and working-class households as well as some decidedly downscale households. Residents share similar consumption patterns, living in modestly priced homes, including mobile homes. Their lifestyles are similarly modest: these households are into playing games and sports, shopping at discount chains and convenience stores, and tuning into nearly everything that airs on TV and radio.

On the other hand, Conservative Classics and Cautious Couples tend to have a pre-paid cell phone because of its simplicity. These mature empty nesters, age 55+, earn middle incomes and have tastes to match. They like to travel, but not extravagantly. For leisure at home, they enjoy gardening, reading books, watching public television, and entertaining neighbors over barbecues. When they go out, it’s often to a casual-dining or a family restaurant.

These differences have implications for the wireless carriers and suggest that their pre-paid offers might differ in different TV markets. The DMAs in which you are most likely to find people likely to buy a pre-paid phone are all smaller DMAs. You aren’t as likely to find these people in any of the top 25 DMAs.

In DMAs like Harlingen, Texas and Myrtle Beach, South Carolina you tend to find people who buy pre-paid phones to help control their budget. Here the pre-paid wireless carriers would do well to emphasize how their products can help people balance their budgets. A common response in this market might be: “You sweat for your money, don’t waste it on a cell phone plan designed for a celebrity wanna be.”

People who like the simplicity of pre-paid wireless plans tend to live in places like Wheeling, West Virginia and Traverse City, MI. Prepaid marketers here can focus on how their products simplify people’s lives. In these towns a focus group attendee might say, “Cell phone plans just keep getting more and more complicated – daytime, nighttime, weekend, free friends, data charges, text messages – when all you need is to call your grandkids from wherever and whenever you want.”

In contrast, in the top DMA’s you don’t tend to find either of these types of people. Not one of the top 5 DMA’s has above average concentrations of either of these types of pre-paid phone buyer.

However, due to the overall size of these DMAs, you do tend to find significant numbers of people interested in each of these messages. The implication for the wireless carriers is that advertising conveying their pre-paid plan’s benefits will resonate selectively in portions of major markets, rather than throughout the market. More geographically targeted media will help the carriers focus in on the specific areas in which to deliver this message.

About the Nielsen Convergence Audit: To understand consumers’ media and communications attitudes and behaviors towards voice, video and data products, Nielsen conducts one of the largest surveys of its kind—the Convergence Audit®, an annual survey that collects more than 32,000 U.S. online and mail respondents.

“As with other forms of Internet technology, more men were early-adopters of the mobile Web and still make up a slightly larger presence today,” commented Chris Quick, client services manager, mobile media. “Now that the technology is more mainstream, women are quickly embracing the benefits as ‘connected consumers,’ tapping the convenience of Web access on mobile phones to network, browse the latest shopping deals and get ideas for dinner, all while on the go.”

Mobile and gender

From celebrity news to shopping, mobile Web usage by women traversed a variety of subjects and actions in July, including online shopping and social networking. Women were 1.4 times more likely to visit People.com and use AT&T search via a mobile Web device in July.

In July, men’s mobile Web interests centered on news, sports and online games. Men were 1.8 times more likely to visit Gizmodo – the technology news site – via a mobile phone, making it the No. 1 Web site visited by men on their mobile devices in July in terms of unique audience composition.

Teen take

Teen usage of mobile phones focuses heavily on texting, both sending and receiving. In Q2 2009, the top-ranked mobile activity for teens was messaging, with 84 percent of teens sending a text message and 55 percent of teens sending a picture message.

The data analysis examined the distinctive consumer patterns and marketing appeal of women who work fulltime and have one or more children at home. The study includes information on their shopping habits, media patterns, demographics and lifestyles. “The Working Mother is the gatekeeper for purchases related to clothing, feeding and making a home for her family. Her high spending on cellular services together with her propensity to download content via her cell phone imply that mobile marketing could be an important platform for reaching her with product announcements, offers and other promotions,” said Howard Goldberg, Senior Vice President of agency services, Scarborough Research.

Download Shopping Insights on Today’s Working Mom, from Scarborough Research.

What outlook should we have when contemplating the future of mobile video? For content providers, carriers, advertisers and consumers, mobile video is often a glass-half-full / glass-half-empty scenario. Yes, the industry is placing tremendous attention and investment in the medium – but, by comparison its reach is fairly humble. And yes, the possibility for future growth is enormous when we consider content and commerce potential– but, it’s a complicated path to that future.

For some perspective, we turn to Nielsen’s latest Mobile Video Report, which paints the picture either way: It provides affirming insights on mobile video’s best year yet. Nonetheless, it highlights substantial limitations and challenges ahead.

Glass Half-Full – Mobile Video’s Best Year Ever

• Reach, up 70 percent year over year, crossed the 10 million active viewer mark in 2008 and kept going – up to 15.3 million active viewers as of Q2 2009 (that’s roughly 7% of all US mobile subscribers)
• With “All You Can Eat” mobile data packages and increased access to mobile video over the mobile Web, access to mobile video content is more affordable than ever. A subscriber with a data package that includes video now pays $5.73 a month, on average, compared to $8.32 a year ago. Meanwhile, most mobile video viewers today aren’t even paying for a special package, but instead access mobile web through mobile Web access, simplifying the means to mobile video
• Though average subscription cost of mobile video is down, added reach still helped carriers claim a record $308 million in mobile video subscriptions in Q2 2009, up 11% compared to the prior quarter

Glass Half-Empty – Many phones not answering the call

• Half of U.S. mobile subscribers still carry phones that aren’t even capable of viewing video (52%), that’s just a marginal improvement over two years ago (62%). The adoption rate of mobile-video capable phones slowed as the economy weakened
• Among mobile video viewers, satisfaction with the overall experience went down over the last year (74% in Q2 2008 to 65% in Q2 2009). Even more troubling, consumer satisfaction decreased around undeniably improving components such speed, reliability, content, price and general audio and video quality.
• The mobile video audience is churning quickly. Disproportional to year-over-year audience growth, today’s mobile video audience is made up mostly of viewers still in their first year of use (78%). Since its introduction, the adoption rate of mobile video has been governed by a revolving audience of mobile video “testers,” viewers who try out the medium for under a year and then ditch it. Mobile video today still lacks the stickiness it needs for more rapid growth.

A mixed bag for sure, but no matter your take on mobile video, today, it’s hard to deny that a confluence of factors — better devices, faster networks, dedicated programmers, consumer interest – prime the pump for the broader, if bumpy, adoption of the platform. In short, the catalysts for growth are now in place.

A different kind of growth

Perhaps adoption of mobile video may look more like the gradual, linear adoption of DVRs than the exponential growth of portable MP3 players and the similarity wouldn’t be a coincidence. DVRs and mobile video are analogous in their transformational nature: technologies that fundamentally alter the time or place of media consumption. That’s a very distinct evolution from a technology such as the MP3 player, which did not change the time or place of the portable CD player, but simply refined the user experience of that medium – thus the adoption of the MP3 player was a logical adoptive progression for the consumer. The extent to which mobile video asks consumers to fundamentally alter their consumption patterns should not be understated.

Choose (cautious) optimism

At 6.5% penetration, it’s easy to be a pessimist about mobile video, to see the half-empty glass. But after posting its best year yet, after 70% year over year growth, it’s wiser to be a cautious optimist. Mobile video is a transformational technology that will require real changes or additions to the consumer media diet. As such, it may have a long way to go before making a dramatic impact on our media economy. When it does, though – when mobile video adoption further dissolves barriers of video’s time and place – the beneficiaries will be those who participated in its evolution, those who anticipated and planned for this demand.

Share your thoughts below or email me for more on Nielsen’s latest Mobile Video Report nic.covey@nielsen.com.

More highlights from Nielsen Online’s Q1 2009 Canadian Mobile Internet Report can be found in the complete media release.

“Although this older segment has joined Member Communities en masse in 2008, most have only a toe in the Social Media water,” notes Chuck Schilling, Nielsen Online. “Younger adults are still more committed to the Web 2.0 dynamic and have moved beyond the entry-level Social Network experience.”

Adults with multiple social networking profiles are approximately 2.5 times more likely than average to be in the 18-20 age group and to be students. As social media fans, they are nearly three times more likely than average to publish or own a blog, and more than twice as likely to visit online dating sites and other blogs. Technology is an important part of their lives, as they are more than twice as likely to set up an RSS feed or listen to MP3’s or streaming music on their cell phones.