November 16, 2017

American consumers’ status as a device-dependent nation closes 2017 with strong momentum and some important firsts in terms of demographic and usage shifts according to Deloitte’s 2017 “Global Mobile Consumer Survey”. With nearly 264 million Americans using their mobile phones 12 billion times per day, in the aggregate, the mobile ecosystem remains one of the most important enablers of the way we live and work in 2017. This year, smartphone penetration reached 82 percent overall with ages 18-24 having the highest penetration at a staggering 93 percent. In fact, the strongest growth in ownership for two years running now is among those aged 55 and older.

Furthermore, the survey finds smartphone usage and growth rates for both devices and apps have matured after years of robust growth, and most Americans not only own smartphones but are fairly consistent in the way they use them. Conversely, what is growing is consumer interest in a range of exciting “Internet of Things” related applications and services and the industry has done a strong job of keeping consumer interest high in the potential of Internet of Things (IoT) and fifth generation networks (5G), as well as unlimited data plans and device upgrades.

“Our survey reveals that, even as smartphone use begins to mature, we may be on the precipice of the next generation of mobile, as IoT applications and services capture consumer interest and the global race to 5G takes hold,” Craig Wigginton, vice chairman and telecommunications sector leader, Deloitte & Touche LLP. “It’s an incredibly exciting time for both the mobile ecosystem and consumers as we anticipate this next wave of innovation that will further change the way we live and work across generations.”

Device addiction shifts to device etiquette

The year 2017 marks the emergence of what we call “device etiquette”—a collection of usage patterns and habits across all demographics. The survey notes that respondents are relatively consistent when it comes to a number of times they look at their phones each day, including the speed at which they reach for their phones.

  •     Almost half (47 percent) of U.S. consumers are making a conscious effort to reduce or limit their smartphone usage, mostly by keeping it out of sight or turning its functions off.
  •     Overall, the number of times users look at their phones has remained nearly constant for the past three years at approximately 47 times per day, the notable exception being the youngest age group (18-24) who check their phones 86 times a day, up from 82 times in 2016.
  •     The number of apps consumers download and have installed on devices has increased marginally, to 23, from 22 in 2016.
  •     Eighty-nine percent of consumers looked at their phones within an hour of waking up, a yearly increase of only one percent.
  •     Similarly, 81 percent of those surveyed look at their phones an hour before going to sleep, consistent with 2016.

Industry outlook remains strong despite shifts in usage and device growth

While usage and behaviors are beginning to mature, the report found several bright spots at the industry level including:

  •     Nearly two-thirds of consumers are still replacing their phones every two years, despite the lack of device subsidies.
  •     Sixty-three percent of consumers have visited a carrier store in the last year making retail stores an important connection to the mobile consumer, and 1 in 5 consumers have visited a carrier store in the last month.
  •     Text messages were again the top service used weekly, by 91 percent of those surveyed.
  •     Voice usage is up 9 percent from 2016 reversing a four-year downward trend, with 86 percent of respondents saying they make a voice call weekly.
  •     Mobile device usage grew fastest in the 45 and over age category while the millennial demographic was steady, year-to-year. This indicates the older generations may be following the younger, and potentially grandchildren are sharing their experience with grandparents increasingly over their mobile devices.
  •     While short-form video initially gained popularity amongst mobile consumers, there was a dramatic shift in 2017 to long-form video, with live TV experiencing the greatest increase nearly doubling year over year from 14 percent to 27 percent.
  •     mPayments continued to gain popularity with 29 percent of consumers reporting making an in-store mobile payment, up nearly 50 percent from 2016, and a 50 percent increase in consumers who now use mPayments on a weekly basis—up to 12 percent from 8 percent.
  •     While overall growth rates for wearables have slowed slightly after two years of double digit growth, the survey notes strong penetration in the 25-34 year-old age group with fitness bands at 35 percent, smart watches at 30 percent and virtual reality (VR) headsets at 20 percent. This indicates the category is becoming mainstream in this often “first to buy” technology demographic.
  •     Despite VR headsets being considered a niche product so far, overall penetration hit 10 percent, with nearly half of VR users reporting weekly usage and 15 percent reporting watching VR content daily.

Wi-Fi edges out a lead over 4G

For the first time in recent years, this year’s survey found 4G has slipped slightly behind Wi-Fi in terms of overall performance. With 5G commercial deployments potentially expected to begin in earnest in 2018, offering substantially higher data speeds than 4G, the report notes that the interplay between mobile and Wi-Fi could be poised for a substantive shift next year in network preferences back toward mobile.

  •     Sixty-seven percent of users say they prefer Wi-Fi over 4G—an increase of 14 percent from last year.
  •     Only 14 percent of consumers reported their 4G connection to be much faster than Wi-Fi at home—a drop of 8 percent, and those reporting 4G speeds to be a little slower at home rose from 11 percent to 16 percent.
  •     Most consumers ranked cost as the most important attribute of their wireless carrier and plan. However, 1 in 4 consumers chose unlimited data plans indicating that the freedom to use their phones at their leisure is their most important consideration.
  •     Over half of all consumers believe 5G is important for the future.

Internet of Things: Full speed ahead

While consumers are becoming more open to and interested in the connected world, our research shows that not all internet of things is created equal. The survey found that the connected car and connected entertainment has surpassed the connected home in terms of near-term consumer interest.

  •     Interest in connected car features such as navigation, traffic and maintenance rose significantly this year, with interest in connected car entertainment at 24 percent, up from 16 percent last year and interest in predictive maintenance services at 41 percent, up from 30 percent in 2016.
  •     Consumers reporting that they did not find any value in connected vehicle functions fell significantly to 14 percent, down from 32 percent in 2016.
  •     Consumers’ willingness to pay for connected car and connected home services is also up across the board, though the largest increase comes from those willing to pay less than $10 a month.
  •     The number of consumers (28 percent) who said they would never consider owning or riding in an autonomous vehicle has dropped significantly since 2015 (down from 38 percent).
  •     Interest in ridesharing categories outpaced growth in ownership interest by a factor of two (14 percent growth in ridesharing compared to 7 percent growth in ownership).
  •     The survey notes that as awareness in internet of things grows, so do concerns about security and privacy. More than 40 percent of respondents agreed that smart home technology reveals too much about their personal life, and nearly 40 percent reported concerns that it allows one’s usage to be tracked.

Consumers are using machine learning and may not know it

While artificial intelligence (AI) and machine learning (ML) are still in the early phases of mainstream use the study found:

  •     Sixty-eight percent of consumers are already using some form of AI/ML on their smartphones and 83 percent of those who do so are ages 18-34.
  •     The highest use categories include predictive text, driving route suggestions and voice assistants, used by one-quarter to one-third of consumers.
  •     That said, 75-80 percent of consumers are not aware of many ML capabilities such as translation, auto photo classification, and automated calendar entries, indicating these as potential growth areas.

Consumers show willingness to share personal data

While consumers may have reservations about privacy as it relates to the emerging Internet of Things platforms, they are showing very few reservations about sharing personal data when entering into agreements or making purchases online. The survey found:

  •     Only 13 percent say they never share personal information such as name, email address, phone number, photos, contact list, browsing activity, purchase history and health metrics.
  •     More than 80 percent of consumers believe that companies use their personal data and 78 percent believe that their personal data are shared with third parties.
  •     When installing apps and registering for services, 91 percent of consumers are willing to accept legal terms and conditions without reading them.

“While traditional mobile services have matured in 2017, the opportunities presented by “made for mobile” content, IoT services, wearables and VR represent a significant value proposition to both industry and consumers,” concluded Wigginton. “Some industry watchers say 2018 is about increasing ‘revenue-per-look.’ Our view is that the industry’s incredible connection with American consumers is about the innovation and value that the mobile ecosystem brings to consumers and that shows every sign of accelerating in the year ahead.”

The 2017 Global Mobile Consumer Survey covers six continents, 32 countries, and more than 51,000 respondents. In addition to exploring year-over-year results and key insights, the survey is also designed to highlight differences between consumers across generational divides—capturing findings from six distinct age groups from ages 18 to 75.

 

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