The impact of economy on mobile

The impact of economy on mobile

In our Q3 2008 report we noted that there could be a slow down occurring in the data card space due to increasing number of layoffs. Comscore is out with some data that shows the pull back in PC data card growth. Also fascinating is the shift in our spent to mobile.


PC Data Card Growth Pulls Back in Q4 2008

PC data card adoption grew 163 percent overall in 2008, slightly ahead of the 157 percent growth rate in 2007, a confirmation of the market’s strong growth trajectory. However, despite this rapid adoption curve, Q4 2008 showed the first signs of softness in the market, as sequential quarterly subscriber growth fell to just 5 percent, following sequential growth of 22 percent in Q3 2008 and several preceding quarters of double-digit growth.

Mobile Broadband Subscriber Growth by Quarter

Q2 2007 – Q4 2008

Total U.S. – Home/Work/University Locations

Source: comScore, Inc.


Growth vs. Prior Quarter

Q2 2007 11%

Q3 2007 27%

Q4 2007 28%

Q1 2008 12%

Q2 2008 14%

Q3 2008 22%

Q4 2008 5%

“The PC data card market is clearly in the early stages of its adoption curve, with the overall number of subscribers multiplying in the past few years,” said Serge Matta, comScore senior vice president. “That said, we’ve observed a significant deceleration in subscriber growth during Q4 2008 coinciding with the economic downturn, an indication that mobile broadband service may still be seen by many as a luxury rather than a necessity. Now is the time for mobile broadband providers to solidify their market position, because as the economy begins to recover and discretionary spending resume the market will likely accelerate once again. Verizon appears well-positioned for this eventual resurgence, having gained 2 market share points in the past year.”

PC Data Card Access Does Not Represent Incremental Internet Usage Overall

The study also compared the Internet usage patterns of mobile broadband PC data card users with the general U.S. Internet population to determine how the availability of mobile broadband affects online time. It is important to understand whether online access via mobile broadband represents incremental Internet usage or merely a shift in usage time between different access points.

When looking at the population in aggregate, the results indicated that PC data card usage actually represents a time-shift in Internet consumption, as PC data card users spent nearly the same amount of time online (89 hours) as typical U.S. Internet users (90 hours) during Q4 2008. Of PC data card users with both a PC data card and a wireline ISP, approximately 25 percent of their total online time (22 hours) was spent using a PC data card.

Time Spent Online Among PC Data Card Users

Q4 2008

Total U.S. – Home/Work/University Locations

Source: comScore PC Data Card Report

Connection type

Hours Spent Online in Q4 2008

Total U.S. Internet Audience 90

PC Data Card User – Total Time Spent Online 89

    PC Data Card User – Time Spent on Data Card 22

    PC Data Card User – Time Spent on Wireline ISP 67

“That aggregate Internet usage via PC data card is not incremental to standard wireline Internet usage suggests that it’s a valuable convenience feature for many Internet users,” added Matta. “That said, there are also certain segments with PC data cards that do spend additional time online, likely indicating that these segments see PC data card as more of a necessity. Carriers seeking to generate strong PC data card subscriber growth during the current downturn will need to focus their marketing efforts on the differing needs of the various segments and consider offering financial incentives in this tough economic environment if they hope to continue attracting new users.”