When it comes to smartphone capabilities … buyers want the basics.

With the plethora of smartphone models that seem to be released with ever-increasing frequently these days, one might think that the innovative features being added to the new smartphone models would be in high demand.

After all, the demand for smartphones looks as though it’s unquenchable; quarterly shipments of smartphones numbered some 366 million devices during the 3rd quarter of 2019 alone, according to data compiled by business consulting firm Strategy Analytics.

But the reality appears to be quite different. Recently, technology market research firm Global Web Index studied the popularity of various smartphone features, looking at a large sample of more than 550,000 consumers in the USA and UK.

As it turns out, the most desired smartphone feature is long battery life. And in fact, the top four smartphone features in terms of consumer importance don’t look like anything particularly jazzy:

  • Battery life: ~77% consider it the most desired smartphone feature
  • Storage capability: ~65%
  • Camera picture quality: ~62%
  • Screen resolution: ~48%

At the other end of the scale are four features which aren’t animating the market in any great way:

  • 5G compatibility: ~27%
  • Biometric security features: ~27%
  • Digital wellness features: ~16%
  • Virtual reality capabilities: ~10%

There’s no question that the newest smartphone models can do a lot more than their earlier iterations. But users want them to do the basics — and to do them well. Other capabilities are simply ornaments on the tree.

For more findings from the Global Web Index study, click here.

What’s the Latest Forecast on U.S. Ad Spending?

ad forecastingMost observers agree that 2015 will be a decent-or-better year for ad spending.  But how will it break down by media segment?

Industry and market forecasting firm Strategy Analytics has just released its latest U.S. advertising spend forecast, which it expects to total almost $190 billion.  That’s about a 3% increase over 2014.

But there are wide variations in the growth expectations depending on the media type.

Digital advertising leads the pack, with an expected growth increase in double digits, while at the other end of the scale, print advertising is forecast to drop by approximately 8%:

  • Digital advertising: 13.0% increase in 2015 U.S. ad spend
  • Outdoor advertising: +4.8%
  • Cinema advertising: +3.4%
  • Radio advertising: +1.8%
  • TV advertising: +1.7%
  • Print advertising: -7.9%

Of course, “digital advertising” is a broad category, and within it Strategy Analytics expects certain sub-categories to grow at a faster clip:  Social media advertising looks to be the star in 2015 (+31%), followed by video advertising (+29%) and mobile advertising (+20%).

Even with these lucrative growth expectations, search advertising (SEM) will continue to represent the lion’s share of digital ad revenues – around 45%.

Also, despite the dramatic growth of digital, the segment isn’t expected to break 30% of all U.S. advertising in 2015.  The more traditional TV ad segment continues to lead all others, although it has fallen below the 50% share of all advertising in recent years.

Here’s what Strategy Analytics is forecasting for ad expenditures by media segment for 2015:

  • TV advertising: ~$79 billion in 2015 U.S. ad spending
  • Digital advertising: ~$53 billion
  • Print advertising: ~$28 billion
  • Radio advertising: ~$18 billion
  • Outdoor advertising: ~$9 billion
  • Cinema advertising: ~$1 billion

Strategy AnalyticsLeika Kawasaki, a digital media analyst and one of the Strategy Analytics Advertising Forecast report’s co-authors, notes that  looking ahead to 2018, TV’s share of advertising revenue is expected to fall further to ~40%, while digital advertising’s share will reach ~35%.

However, it’s not that TV’s volume will be declining — it’s more that digital will be robbing more funds from other segments (particularly radio and print).

Additional details on the 2015 forecast can be viewed here — if you wish to shell out $7,000 for the report, that is.

Apps come of age. (Translation: Average app revenues are cratering.)

Smartphone app developmentWell, it was nice while it lasted.

App developers have had a pretty lucrative playing field over the past several years. But like so much else in cyberspace where there’s a “drive to the bottom,” paid apps are no longer the path to guaranteed revenue riches they might have been once.

According to mobile market research firm Research-2-Guidance, total paid app revenues continued to grow in 2012 – and by a healthy rate of 27% — to reach $8 billion.

But at the same time, the average revenue generated per paid app fell at the very same 27% rate.

As a result, the average revenue generated per paid app declined from ~$26,700 in 2011 to just ~$19,500 in 2012.

Research-2-Guidance posits that the decline in average sales per paid app could ultimately lead to a situation where developing paid apps is no longer a profitable endeavor.

“There are now so many applications available that supply even exceeds demand,” company spokesperson Vincenzo Serricchio noted in a summary statement.

In line with the notion that “everything in cyberspace wants to be free,” information technology research and advisory firm Gartner projects that by 2016, nearly 95% of app storefront downloads will be free rather than paid apps.

And even among the paid apps, the Gartner analysis estimates that nine out of ten of these app downloads will be priced at $3 or lower.

Yet another forecast – this one by Strategy Analytics – predicts that the average price for all phone apps (free and paid combined) will drop to just 8 cents per app by 2017.

Most major brands don’t really care about pushing paid versus free apps, as they typically use them for boosting branding exposure and engagement rather than for revenue generation per se. However, with so many quality free app options being offered, the question is how many app developers – particularly those in the gaming field – ultimately will find the new landscape unprofitable or otherwise unpalatable.

Stay tuned.